Research Paper on Sony Smart Watch

Sony Smart Watch

The Executive Summary

            This proposal is a business idea about a new product called smart watches that Sony should introduce into the market in a bid to diversify its products and make more profits in the long run. This product will not only increase profits but will also help the company to realize new opportunities for further future investments. Additionally, this proposal shall be a reliable tool for future decision-making as far as the new product is concerned.

The Mission Statement

            Sony is a corporation dedicated to inspire and fulfill customers’ curiosity. This is made possible through the company’s boundless zeal for technology and relentless desire for innovation. In addition, the company is always engaged in creating unique new cultures and customer experience through groundbreaking new inventions that will forever provide customers with unique experiences.

Introduction

            Sony is one of the most successful multinational conglomerates operating in a number of business lines including electronics, entertainment, and finance (Nathan 2001). However, the company focuses majorly on the manufacturing of a wide array of electronic products both for the consumer market and for the specialized market. The inception of the company dates back in 1946 during the Second World War by one businessperson named Masaru Ibuka who was later on joined by a colleague named Akio Morita to form a company by the name Tokyo Telecommunications Engineering in Minota, Tokyo, Japan. However, in 1958, after successfully building the first tape recorder exclusively made in Japan, they changed the name to Sony, which grew to become its name up to date. Sony has and continues to be one of the leading manufacturers of electronic gadgets through unique inventions in the technological world (Nathan 2001).

            In this proposed business plan, we suggest to the company to come up with smart watches as part of a lucrative investment that will ensure more profits for the company. This idea came as a result of a thorough study of the prevailing and researched opportunity to venture into the production of this product. It was found that there was a huge unexplored opportunity for Sony to invest in smart watches and increase its benefits, especially due to the fact that the current market is not fully exploited by companies, such as Apple, Google, and Samsung (SmartWatchBooks, 2014). This product will revolutionize the smart watch market in terms of new and unique incorporated features to give customers a unique experience as far as the wearable technology is concerned. Sony’s smart watch is expected to capture a huge international market not necessarily because it will be mid-priced and low-end product but because it will have new and unique features developed to suit different customer needs, such as health and fitness watch, increased connectivity, waterproof, dust and scratch resistance, and an impressive battery life among other user-friendly features.   

            The current global market for smart watches stands at 800 U.S. dollars with Europe and America enjoying the greatest share of the market of approximately 60 per cent. In our research, we were able to realize that about 90 per cent of the overall global market for smart watches is people in developed nations or middle income nations with only 10 per cent from low income earning countries. Despite the growing demand for wearable technology, most people including some from developed nations are unwilling to pay a whopping U.S.D. 250 and U.S.D. 300 for a smart watch, which they regard as a luxury (Chang, 2011). However, Sony’s target market for the new product will include customers across the globe with as little as U.S.D. 100 to own a smart watch. Most companies dealing with the business of smart watches have failed to capture the global attention to the compelling value of owning a smart watch by simply delving on making money. Smart watches are increasingly becoming reliable devices in the healthcare sector as an impetus towards self-care by monitoring individual health and fitness (Bonfiglio & Rossi 2010). Therefore, Sony will endeavor to develop different types of watches tailored for different customer needs at different prices ranging from U.S.D. 100 to U.S.D. 250. This will be done diligently through market segmentation to ensure that customers have an array of alternatives of pocket-friendly smart watches to choose from.

Opportunity Recognition

Since the introduction of wearable technology and specifically since smart watches were introduced in the market, many things have changed with respect to the contributory role of smart watches to the betterment of human life. There is a growing demand for smart watches and more wearable technologies to cater for the growing needs of customers (Baum, Hackstein, & Mehling 2012). Certainly, smart watches are considerably reliable technological invention due to their ability to update the owners on almost everything without having to whip their smart phones. The most important feature of smart watches is their ability to constantly monitor the health and fitness of the owner in various activities.

                 Smart watches are really of a great value to individuals in today’s world and apparently, everybody would want a device that can update him/her on health and fitness (Bonfiglio & Rossi 2010). However, there are several limiting factors that the currently available smart watches hampers the ability of many people to acquire them despite the fact that they are willing to own them. One of these factors is the prices of acquiring a smart watch. Secondly, the privacy concerns among smart watch users have really increased due to the vulnerability of their data that is easily accessible on the cloud and might be misused. Besides, there are complaints over the battery performance with claims that the battery life is very low, which renders these smart phones unreliable in certain instances. This has undoubtedly affected the market in terms of low customer turnout and increased loss of trust on these amazing products (Hartman, 2014). Therefore, after a careful study of the market trend for the product, we realized that producing mid-priced and low-end smart watches that have increased security in terms of protecting user data and statistics, and have longer battery life will attract a huge market. This will consequently lead to increased sales, and thus more profits for Sony in the long run.

Oval: Opportunity
Rounded Rectangle: Cost:
•	Innovation costs and advertisement fee among other costs will be incurred
Rounded Rectangle: Challenges:
•	Stiff competition from existing players
•	Ready market for products.
•
Rounded Rectangle: Gains:
•	The introduction of Sony smart watches will increase the profitability of the firm.

Figure 1. DIFA Model

Consider the DIFA model (George & Bock, 2012)

1. Demand

A. The global demand for smart watches is growing every year (Chang, 2011)

B. The current players have not incorporated the needs of all different classes of people

C. Wearable technology is increasingly becoming crucial in health and fitness matters and

D. Based on our research findings, it came to our attention that smart watches provide very essential and unique features to people and the demand for this wearable technology was high. However, because of the high prices of obtaining one, individuals shy away (Ryan, 2014). Therefore, we came up with this idea where smart watches from Sony will be made available to customers at pocket-friendly prices.

2. Innovation

A. Produce smart watches from Sony

B. Avail multiple smart watches to harness customer choice and preference 

C.  A variety of mid-priced smart watches will be made available in the international market

3. Feasibility

Experience

            Sony has been on the forefront in innovative technologies leading to the company’s ability to produce unique and adorable consumer electronic and IT products that have received a worldwide applause. The company’s ability to produce smart phones that have withstood the stiff competition from high-tech giants, such as Apple and Samsung and make huge profits from the same confirms the fact that the production of smart watches will be possible (Mootee, 2013). The company has qualified staff with the required expertise and skills to make the idea a success, and release products that will surely revolutionize the market in terms of unique features that will provide customers with a unique experience at affordable prices.

Budget

            Sony is a well-established company that has all it takes in terms of financial capabilities to oversee the success of this idea. All the financial requirements will primarily be met from the company’s savings and the project will be solely funded internally.

4. Attraction

A. Mid-priced smart watches

B. Variety of choices available for the customers

Product Proposal

            Product: We propose the production of several smart watch designs from Sony with unique and distinctive features at pocket-friendly prices. These watches will then be released to the international market and because of their attractive prices and features; they will sell easily and thus earn the company more revenue, which will be translated to improved profitability. Additionally, future plans for growth are as explained below

Figure 2: Porter’s Model (Roy, 2011)

1.Bagaining power of supplier

            The company has reliable suppliers of inputs who will be ready to provide support for the new product at low prices to ensure that the total production cost is significantly reduced. This will be reflected on the final price charges for the end products, which will be the Sony smart watches. Therefore, as far as the bargaining power of suppliers is concerned, the company is optimistic that there will be no uncertainty to hamper the estimated cost of production.

2. Threats of new entrants

            We acknowledge that fact that the technology industry is highly competitive and because wearable technology is highly pursued among high-tech companies, it is undoubtedly true that Sony will face stiff competition from new entrants into the business of smart watches. Therefore, to reduce the effect of this, we suggested that Sony should reduce the production as low cost as possible to effect into low-pricing of the products, which we are certain will attract more customers.

3. Bargaining power of buyers

            We understand that the prevailing bargaining power in the market is significantly high because of the existence of many alternatives. This is why we decided to make the pricing strategy as one of our strong factor to lure customers to buy more of the product rather than from our rival companies. Besides the fact that the smart watches will have distinctive features that are exclusively from Sony, the bargaining power of customers will not affect the company’s profitability through the smart watches.

4. Threats of substitutes

            High-tech companies like Google, Apple, and Samsung are the major players in the market of smart watches (Pham-Gia 2009). However, Sony’s entry strategy will take the market by storm because of the fact that this new product will be priced slightly lower than the competitors and these products will have various distinctive features that are user-friendly and easy to use.

Product Pricing

            Generally, Sony’s pricing strategy is based on the production cost, which the company will endeavour to minimize as much as possible in a bid to reduce the output price. Therefore, the lower the production cost incurred the friendlier the prices of smart watches. The sole purpose for this strategy is to increase the company’s ability to reach its target sales within the first year of production as well as stay ahead of its competitors, thereby making huge sales. This is because customers will create more interest on the product that not only cost lower than the rivals’ but also have reliable and user-friendly features. Besides, they will enjoy a variety of alternatives from Sony in terms of different types and models of smart watches, which will be produced on annual basis.

Promotion

            The company shall rely on its worldwide popularity as its strongest point to promote this new product. In addition, Sony has a wide range of customers across the globe and has a significantly large database of emails accounts and data belonging to customers. This will create a reliable avenue to inform the customers about the new product and by sending emails to these customers, the product will easily sell itself. Besides, social media will also provide a good platform for the company’s promotion strategy whereby regular updates will be made with pictures of different models of the product to capture the attention of customers.

Resources

            We believe that Sony has the necessary resources to oversee the success of this innovative product, which will indeed be profitable for the company in the end. The company has access to the most competent and reliable staff who have the skills and expertise needed for the product. Besides, it has easy access to technology that will be relied upon for the success of the innovation.

 Bowman’s Strategy Clock

            Our team chose low price as our Bowman’s Strategy, which will provide slightly lower costs for the product.

Figure 3, Bowman’s Strategy Clock

Innovation

Our proposed innovation is unique from competitors’ product essentially because the product will have new and distinctive features. The smart watches will have features like the ability to connect and pair easily with any smart phone, a dozen interchangeable straps, five different colors, variety of sizes, and slightly lower prices compared to the rival firms among other different features. All these features are designed to provide customers with a unique experience while enjoying the various functions of the smart watch.

Innovators: Introduction of new and unique smart watches from Sony will provide a         unique experience to customers all over the world. The product will have both             existing and new features that will make customers’ life better.

Early adopters: Consumers from cities and urban areas in developed nations           including UK, U.S.A, China, and Japan. Sony will closely monitor the reactions and          impressions from consumers from these nations in a bid to identify any weakness for             improvement before fully releasing the product.

Early majority: Majority of target consumers during the early stage will be from     U.S. and European nations as well as Asia. Variety of smart watches in terms of            design and color at different costs will be available in Sony stores.

Late majority: Depending on the feedbacks from early customers in the targeted cities       of America, Europe, and Asia, if perceived to be positive with huge sales and high        revenue recognition, the product will then be released to the international market           covering not only major cities and developed nations in Europe, America, and Asia      but also shipping the product to all major cities of the world.

Laggards: The success of the product in terms of the amount of revenue and profits          realized will then allow Sony to spread this product to all corners of the world            targeting not only cities but also vendors in different towns across the world.   

Factors

  1. Relative Advantage: Consumers will be able to enjoy numerous advantages including long battery life, user-friendly, and ability of the smart watches to connect with numerous smart phones. These will include all the benefits of existing products and above all, they will be more pocket friendly than other smart watches. Besides, the innovation will ensure high profitability to the company because of various inherent measures in the project including the financial saves and time saved.
  2. Observability: The enhanced benefits from the new smart watches from Sony can be made as tangible and demonstrable as possible through educational avenues as well as through experiential marketing where customers can be allowed to use and be shown how to enjoy the benefits from the innovation.
  3. Trialability: The fact that the innovation is designed for easy use of customers explicates that they can easily try the product. Besides, the manuals available in each product will have several languages for easy understandability. Besides, a trial on a small scale can be used to enhance customer knowledge about the product.
  4. Compatibility: One of the main benefits of the innovation is that it is designed to meet customers’ needs. The wearable product is easily potable and allows the users to multitask without any hitch.
  5. Complexity: The simplicity of the innovation is manifested in the product’s ability to provide easy and directions for new users simply by following the simple directions in the menu. Developers understand the needs of customers and the language used is also simple in terms of allowing the users command the innovation to do what they want.
  6. Perceived risk: Perceived risk of the innovation is the battery life. Customers may not necessarily believe the long life of batteries in the smart watches but may go ahead and risk buying the product. to avoid the risk of lowering the battery life, the innovation will come with two more extra batteries and provide a one year guarantee where users can easily seek help in case of a problem with their smart watches.    

Marketing  

The company targets the global market of consumers due to their growing demand for smart watches. As such, it will endeavor to ship large quantity of the product to various destinations while relying heavily on the company’s distribution channels for most of its electronics worldwide. Marketing will mainly be done over the internet as well as through the media both in print and in electronic media.

Growth

The new product has the potential for future growth based on the fact that Sony is always in involved in constant research and development initiatives where they will identify opportunities for further improvement of the new project that will have greater returns as time goes by (Nathan, 2001). Essentially, the first phase will involve developing the product in various designs. This will be followed closely by the second phase, which will involve planning for the new identified market as well as improving on the product through various techniques. The third phase will involve venturing into the newly identified markets with new products, and the last phase will be incorporating new features through innovative means to enhance the quality of the product as high as possible.

Ansoff Matrix for the project

                                        Existing products                                        New Products

    Product Development New design of smart watches each year  
    Market Penetration Sony smart watches  

Existing markets

New markets

Figure 4, The Ansoff Matrix shows clearly Sony’s strategies for growth and sustainability regarding the new product.

Implementation

The beginning of any project is always difficult. However, the planning part of the project is always essential in ensuring that the project starts up well and with confidence. The project will begin by gathering all the necessary resources including financial, human, and technological. The implementation period will take at least one year for a successful and will include the following process

  1.  Idea generation and distillation
  2. Concept definition
  3. Strategic analysis
  4. Concept development
  5. Market testing and concept finalization
  6. Launching of the product
ID Task Name Duration Start Finish
1 Idea generation and distillation 90 Days 15/03/2015 15/05/2015
2 Concept definition 60 Days 01/04/2015 01/06/2015
3 Strategic analysis 60 Days 02/06/2015 02/08/2015
4 Concept development 210 Days 15/03/2015 15/10/2015
5 Market testing and concept finalization 90 Days 01/11/2015 01/02/2016
6 Launch of the product 60 days 01/02/2016 01/03/2016

Gantt chart scheduling the implementation process of the idea

Reflection, Conclusion, and Recommendations

Sony is a well-developed company able to produce a vast array of electronic products. The company is dedicated to producing highly regarded gadgets for the consumers as well as experts. Venturing into the production of wearable technology in the name of smart watch will be a masterpiece product that will revolutionize the wearable technology market. Despite the fact that there are several competitors engaged in the production of the same product, we strongly believe that Sony has what it takes to produce the best smart watches that will receive a warm welcome in the international market. Consequently, it will be able to make huge sales and profits, a fact that will prove the viability of this idea.

References

Baum, M., Hackstein, M., & Mehling, M., 2012. Strategic Marketing: Assessment of why the Sony Walkman brand lost out to iPod in terms of its position and level of demand in the marketplace. Munic: GRIN Verlag.

Bonfiglio, A., & Rossi, D. D., 2010. Wearable Monitoring Systems. Chicago: Springer Science & Business Media.

Chang, S.-J., 2011. Sony vs Samsung: The Inside Story of the Electronics Giants’ Battle For Global Supremacy. London: John Wiley & Sons.

George, G., & Bock, A. J., 2012. Models of Opportunity: How Entrepreneurs Design Firms to Achieve the Unexpected. Cambridge: Cambridge University Press.

Hartman, K., 2014. Make: Wearable Electronics: Design, prototype, and wear your own interactive garments. New York: Maker Media, Incorporated.

Mootee, I., 2013. Design Thinking for Strategic Innovation: What They Can’t Teach You at Business or Design School. New York: John Wiley & Sons.

Nathan, J., 2001. Sony. Boston: Houghton Mifflin Harcourt.

Nugroho, J., 2013. A Conceptual Framework for Designing Wearable Technology. London.

Pham-Gia, K., 2009. Marketing Strategy of Sony for Portable Audio Device Business. Munich: GRIN Verlag.

Roy, D., 2011. Strategic Foresight and Porter’s Five Forces. Munic: GRIN Verlag.

Ryan, S. E., 2014. Garments of Paradise: Wearable Discourse in the Digital Age. Cambridge: MIT Press.

SmartWatchBooks., 2014. Which Smart Watch?: The SmartWatch Buying Guide. New York: LOTONtech.