Sony Case Study - Resources, Capabilities and Core Competencies Essay

Words: 1545
Pages: 7

Question 3: What do you identify as Sony’s resources, capabilities and core competencies? Does Sony have a sustainable competitive advantage?

Sony Corporation is considered one of the world’s most successful companies, operating in the “electronics, games, music, films and financial services” industry (Hanson et al, 2001). Sony is known for creating “products that stimulate the senses and refresh the spirit” (Sony, 2007). Effectively managing a combination of its resources, capabilities and core competencies, has allowed Sony to create a strong sustainable competitive advantage.

Resources refer to “factors that a company owns, controls and uses for the purpose of creating value” (Hill et al, 2007). Sony’s numerous tangible
…show more content…
The combination of Sony’s various capabilities with its numerous resources, helps to create its sustainable advantage since they are valuable, rare, costly to imitate and non-substitutable. This has also allowed Sony to maintain its distinctive competency, and create value for its customers.

Core competencies
A company’s core competencies are defined as “the central set of knowledge in a company that, when applied, allows the company to create superior value than can competitors” (Hill et al, 2007). They may be either internal or external, but must be unique and apply to a “wide range of markets” (Kandampully et al, 2001).

While Sony’s core competencies consist partly of “its ability to innovate and come up with revolutionary products” (Singh et al, 2005), and its ability to achieve product differentiation, its main competency is its ability to miniaturize. By continuously shrinking the size of electronic products, Sony has managed to create convenience for its consumers, thus creating value.

Sustainable competitive advantage
Competitive advantage is “when a company is able to outperform its rivals, as commonly measured by the attainment of profits above the industry norm” (Hill et al, 2007). It is the combination of the generic building blocks of superior efficiency, superior