Internet has made a big influence for new technology innovations. Today, we don’t imagine a day without connection to the world. Internet has become a significant part of our lives. When few years ago we would say “sorry, I missed your call”, today, “sorry I missed your call, text, email, Skype, Facebook post, Tweet and etc.” While it is easy to keep up with technology for us, some companies are having difficulties. A good example is well known Kodak. The company fell behind new technology and therefore was not able to compete in the market. In contrast, Sony has recognized the impact of new technology and the need to adjust their products. Sony Corp. has decided to buy Gaikai Inc., which is known for streaming videogames over the internet. The videogame industry has changed significantly from years ago: from the dedicated machine for games to online games, today. It is expected that all videogames will shift to online eventually.  By combining both companies, Sony will gain technological strength which is significant in competitive market.

Sony has learned a lesson on missing out on moving technology. Years ago, Sony pioneered a portable music player; however, the company did not improve since and Apple took over. Sony did not recognize the significance of improving the music players and as a result iPods and iTunes took place instead.

It is very important for companies to foresee the improvement in technology and demand for it. The companies must adjust their products to gain competitive advantage in the market. In class we have already learned the importance of product design. The company must identify customer wants and needs, also identify how the product will satisfy the customer. Company must develop importance ratings and evaluate the competing products.

Do you think the videogame industry will become available purely online? Do you support Sony for acquiring Gaikai Inc.?

 

Wakabayashi, Daisuke (2012, July 3).Sony Makes a Shift To Streaming Games. WJS, page B3.

As we all know, Japan is well known for the innovations of new technology as well as production. Korea has been long time competitor in the market. Recently, Korea has introduced new ultrathin televisions that has arisen awareness of competition for Sony and Panasonic. Worldwide known electronic companies had to think of the way to gain stronger position in competing with Korea. Both companies agreed to cooperate on production of new technology for OLED televisions as well as organic diode display and panels for large screen TVs. Japan’s largest consumer electronics companies plan to launch mass-production method in 2013. In addition, to reduce the production costs companies are discussing the option to partner with Asian manufacturer AU Optronics Corp. Another reason for merging is the financial difficulties that electronic manufacturers are facing. Strengthened Yen has made Japan’s products more expensive for other countries and therefore the export of electronics overseas has dropped.

The choice that Japan’s electronics companies made reflect the 10 Strategic Operations Management Decisions: Design of goods and services, Supply Chain Management, Managing Quality, Process and Capacity design, Location Strategy, Layout Strategy, Human Resources and Job design, Inventory Management, Maintenance and Scheduling.

The companies are aware of Korea’s advantage in technology and must adjust its production to be an equal competitor in the market. Sony and Panasonic must reduce its production costs in order to meet consumer expectations in price as well as quality. As I mentioned before, the stronger currency has made production more costly to other countries and they were forced to look for alternatives to reduce cost. Partnering with another company is one of the ways to reduce production costs. OM has to weigh the gains and losses of such partnership and make a rational decision. None less important decision for OM is to estimate the demand for new products. They have to evaluate the market and make a decision on the inventory needed. The shortage of it causes the loss of customers and the excess inventory is costly. As I mentioned above, both companies are experiencing lower sales than usual and therefore the pressure to make a right decision is overwhelming.

Do you think the decision to merge both companies, Sony and Panasonic is rational? Should they partner with an Asian manufacturer?

Kachi, Hiroyuki (2012, 06, 26), Sony, “Panasonic Ally on TV Technology”, Wall Street Journal, p. B4.