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The success in any company like the Sony Company which usually operates mainly for marketing and the acquisition of high profits is dependent on the management and the establishment of all the products and services that are being offered by the company. For a company to be able to compete and survive in the competitive market, it has to be very successful. The success of a company or organization can be defined by the constant innovation and development of the company’s product lines and the increasing clientele numbers (Gareth and Jennifer, 2005).
Sony’s Corporations’ strategy is not sustainable since currently, the company has been in a very critical situation and there is the need for Sony to be cautious about the entire future potential crisis that the company is likely to face (Finlay, 2000). The crisis control of a company depends on whether it is pro-active or reactive control. A company’s crisis control is pro-active if the crisis is known and it is reactive if the specifics of the actual situation are dealt with as they unfold. Crisis control and risk management are very essential for implementation by Sony so as to be able to sustain its Corporations’ strategy. Sony should be able to learn from its mistakes and try to implement on more strategies if they want to be successful and get away from the current situation which is not favoring them. With this, it can be able to regain its market share and reputation in the future.
Sony Corporation has not been fairing very well in the global market and environment. The global environment that has greatly affected the general performance of Sony Corporation includes global poverty, air pollution, and global warming. Due to these global environments, the consumption of electronic goods has decreased over the years which have explained the reason as to why the Corporation is failing in the global market (Finlay, 2000).
Sony corporation has been experiencing a decline in the consumer electronics sale which has forced the company to have to put in measures to be able to respond to the declining unit prices which has further led to a reduction in the sizes of TV screens and a very stiff price cutting competition from other close related business firms which also produce electric consumer goods. Personal drive is the main driver in the execution of the Sony corporations strategy which involves courage by the leaders and the managers who in most cases are able to take responsibilities for their own actions and are also able to reorganize the corporation by showing great courage and ready to jump into action so that new ideas can begin to take effect at once. The leadership in the Sony Corporation has enabled the company to soar into greater heights in the electric consumer goods which is shown by the Corporation’s CEO (Eric, 2008).
Sony’s CEO Howard Stringer has been considering outsourcing all the TV production because the company has been experiencing huge losses which could make the whole company to collapse. In order for Howard Stringer to be able to outsource these TV production, he should be able to plan and budget for all the costs which can be incurred to make the outsourcing a huge success. Outsourcing in a business or company is the obtaining of goods and services from another outside company or supplier so as to be able to cut down the production costs of producing the certain commodity or good. A company can consider outsourcing a certain production of a commodity like the case of Sony Corporation is thinking of outsourcing all its TV production which could be done by the help of the Corporation’s CEO Howard Stringer (Finlay, 2000).
The potential benefits that Sony Corporation can get from this outsourcing is that the production costs of the company into the production of TVs would be reduced by great margins, the profit margin of the company would increase, the company’s market share would also grow at a very high rate, and the company would be able to attain a higher level of consumer satisfaction since the goods produced would be less cheaper as compared to the original product before the outsourcing. The main goals and the objectives of the corporation would be reached which are the customer satisfaction and the profit maximization goal. Other benefits of outsourcing the production of TVs to Sony corporation include the mitigation of the foreign exchange rates which in most cases are fluctuating in many countries, a greater asset accessibility by all its customers, and an increase in the contracts from willing manufactures which could help in the reducing of the total costs and also providing a continuous supply chain (Eric, 2008).
The costs which are involved in the outsourcing of a company’s products are the production costs which determine the cost of the final product to the consumer which has to be fair enough due to competition from other closely related companies. The production of TVs in Sony Corporation makes up a 10% of all the total sales in Sony but the main reason as to why Stringer decided to outsource the production of TVs is that since Sony Corporation launched the production of TVs, the company never got any returns in the form of profits from the sale of TVs like the Bravia Brand which was launched by the company in 2005. The losses in the year 2008 were estimated to be about $2.3 billion and may get to be worse in the future (Gareth and Jennifer, 2005). This outsourcing by Sony can help in saving the company since it can be able to get a supply chain which is continuous due to the large numbers of manufacturers who are willing to get into contract with the corporation.
There are advantages that companies from the United States moving their production to other foreign countries like Mexico to both the company and the economy. The advantages to the company which is outsourcing its production is that the company is able to cut costs which are related to the production of the commodity since it is able to outsource the production of its commodities to Mexico which has cheap labor which would help the company to be able to make high profits and also improve in its competitive advantage. The advantages that Mexico would get from these companies which are outsourcing their products is that it will have an increase in the job creation, an increase in the rates if investing since manufacturers from Mexico would be making contracts with the U.S. companies to produce their products which would boost the country’s total revenue.
There are threats and disadvantages of U.S. companies moving their production to other foreign countries like Mexico. When companies decide to outsource their production of their goods and services to other countries, it means that they destroy job opportunities for the American people since they move their chains of production to other countries which symbolize that in those countries, there will be job creation for the residents which makes it a threat to the American People since they will be forced to relocate to other countries to look for jobs since they will have lost their original jobs in the companies. This job loss by the American people has a negative impact on the economy of the U.S. since it will increase the rates of the people who are unemployed. This increase in the unemployment rates could lead to high rates of inflation which could further cause fluctuations in the foreign exchange rates which could affect the small upcoming companies in the United Stated making them to make huge losses or even collapsing (Gareth and Jennifer, 2005).
In conclusion, the outsourcing of a company could be both advantageous and also disadvantageous to both the company and the country into which the company operates in. outsourcing can help a company to be able to be a leader in the competitive market since the cost of producing its commodities is reduced and the company can decide to sell its products at a lower price so as to be able to retain its loyal customers where it can have a negative effect to the economy of the people living in the United States since it leads to high unemployment rates, increasing inflation rates, and fluctuating exchange rates.