A critical examination of the way Supply Chain
Management (SCM) facilitates increase in
productivity and also enhances customer
satisfaction of multinational companies
The Case of Sony Electronics
1
Contents
Abstract.................................................................................................................................................4
Acknowledgment..................................................................................................................................5
1.Introduction.......................................................................................................................................6
1.1 Research Overview......................................................................................................................6
1.2 Aims and Objectives....................................................................................................................6
1.3 Research Questions.....................................................................................................................7
1.4 Structure of the Dissertation.......................................................................................................7
2.Literature Review...............................................................................................................................9
2.1 Introduction.................................................................................................................................9
2.2 Notion of Supply Chain Management (SCM)...............................................................................9
2.3 Links within the Supply Chain Management (SCM)...................................................................11
2.4 Benefits of Supply Chain Management (SCM)...........................................................................12
2.5 Elements of Supply Chain..........................................................................................................14
2.6 Components of Supply Chain Management (SCM)....................................................................18
2.7 Background of Sony Electronics.................................................................................................20
2.8 Supply Chain Management (SCM) at Sony Electronics..............................................................24
Sony's Structure for Promoting Supply Chain Management......................................................28
Implementation Framework............................................................................................................28
3. Challenges...............................................................................................................................29
3.Research Methodology....................................................................................................................34
3.1 Introduction...............................................................................................................................34
3.2 Justification of Theoretical Approach........................................................................................34
3.3 Research Paradigm....................................................................................................................35
Epistemology.......................................................................................................................................36
Ontology.............................................................................................................................................36
3.4 Research Methodology..............................................................................................................37
3.5 Ethical Considerations...............................................................................................................40
3.6 Challenges Encountered............................................................................................................41
3.7 Alternative Approach.................................................................................................................42
4.Discussion........................................................................................................................................44
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4.1 Introduction...............................................................................................................................44
4.2 Case Discussion..........................................................................................................................44
5.Finding and Analysis.........................................................................................................................50
5.1 Introduction...............................................................................................................................50
5.2 Case Analysis..............................................................................................................................50
LG Electronics Green Program.............................................................................................52
Certification Process...............................................................................................................53
Documents for Suppliers........................................................................................................53
6.Conclusion........................................................................................................................................61
6.1 Key Findings and Recommendations.........................................................................................61
6.2 Limitations.................................................................................................................................62
6.3 Future Research Options...........................................................................................................63
6.4 Concluding Remark....................................................................................................................63
Appendix 1: References......................................................................................................................64
Appendix 2: Interview Questions........................................................................................................67
3
Abstract
Those days are now just part of the history when firms just used to invest and forget.
With rapid advancement in technology and continuously increasing consumer’s
needs, the scenario has completely altered now. Almost each and every
organization now focuses upon building a strong Supply Chain Management (SCM)
to facilitate easy flow of goods along with maintain good links with both customers
and suppliers. They aim to attain high level of customer satisfaction, increased profit
margins, enhanced productivity as well as improved ways of aiding both employees
and the managing staff. This research study attempts to explore the extent to which
Supply Chain Management (SCM) approach can benefit multinationals to meet their
objectives and attain distinctive competitive edge by considering the case of Sony
Electronics in specific.
This research study is a mix of primary and secondary research technique and aims
to perform a comparative study between the Supply Chain Management (SCM)
strategies at Sony, LG, Samsung and Videocon. The data has been gathered both
from secondary sources such as library, text books, online journals, articles as well
as interviews with management staff from Sony, LG, Videocon and Samsung.
4
Acknowledgment
I am thankful to both God and my family for providing me such a fantastic
opportunity to pursue my put your degree and university here and enable me to write
this dissertation.
I also articulate deep gratefulness to my supervisor, put your supervisors name here,
without whose assistance and support, this piece of research study could never had
been successful. He was a constant source of motivation for me and encouraged me
at all the times.
Additionally, my individual thanks to each and every interviewee for their valuable
time and understanding the importance and purpose of my study.
Lastly, I am also highly thankful to all my colleagues and the college staff members
for continuously supporting and helping me and making my stay at the University an
unforgettable learning experience!
Put your name here
5
1. Introduction
1.1Research Overview
In this era of cut throat competition, Supply Chain Management (SCM) has evolved
out as an extremely significant application of competitive benefit for several
companies and firms. The effect on Supply Chain Management (SCM) has
augmented speedily, illustration on growths in Internet, logistics, stock supervision,
demand chain administration, association management and ethnicity differentiation.
Supply Chain Management (SCM) is considered to be an expanded management
concentration that includes the collective influence of all the organizations concerned
with the manufacturing and distribution of goods and services, from dealers to
producers then suppliers and lastly, to the customers. This particular concept of
supervising production presupposes the fact that all the organizations concerned in
the procedure of providing goods to the customers are fraction of a system or supply
chain. It embraces everything essential to gratify consumers and recognizes
products consumers are more inclined towards purchasing, techniques that should
be employed to manufacture them, and lastly, ways of distributing them.
Keeping the rapid growth of SCM in consideration along with its benefit, this study is
a step ahead in this area. Through the medium of both primary and secondary data,
it attempts to critically examine the way Supply Chain Management (SCM) facilitates
increase in productivity and also enhances customer satisfaction of multinational
companies by taking the case of Sony Electronics. The sections below highlight the
research aims and objectives in detail along with the structure of the overall
dissertation.
1.2Aims and Objectives
6
Maylor (2006) states that every project be it small or big and irrespective of its
domain, is linked to a set of specific goals and objectives. Similarly, this research
study also attempts to critically examine the way Supply Chain Management (SCM)
facilitates increase in productivity and also enhances customer satisfaction of
multinational companies by taking the case of Sony Electronics. The research study
is a mix of primary and secondary research and data has been gathered through a
variety of sources such as interviews, library, online journal, historical archives etc.
Moving ahead, the section below lists the set of sub-research questions for this
piece of study.
1.3Research Questions
Besides the specific research aim, the study targets to address the following
research questions as well:
(i) To explore the way Supply Chain Management (SCM) approaches at Sony Electronics
differ from that at other organizations i.e. LG, Samsung and Videocon.
(ii) To analyze the way SCM can lead to increased productivity and overall efficiency of the
organization.
1.4Structure of the Dissertation
After the introduction chapter which has presented a research overview along with
summarizing the research study aims and objectives, detailing research questions,
the thesis comprises of five other chapters i.e. Literature Review, Research
Methodology, Discussion, Finding & Analysis and lastly, the conclusion section. The
literature review chapter details and describes all the key terms connected with the
study such as notion of Supply Chain Management (SCM), links within the SCM,
7
benefits of SCM, elements of supply chain and components of SCM. This chapter
also provides an insight into the background of Sony electronics and approaches it
has adopted within SCM. Strong emphasis is laid on the way Sony uses the
Corporate Social Responsibility (CSR) strategy within the Procurement from two
varied perspectives i.e. the product procurement processes and the fabrication
processes. The next chapter will be the research methodology which will start with
providing a justification of the theoretical approach and move ahead with research
paradigm and methodology in order to address the research questions. This piece of
study is fabricated around understanding human mind and interpreting their views,
therefore, the interpretive research paradigm along with the case study approach
and interviewing technique has been selected (Darke et al., 1998). Further, this
chapter also focuses upon the ethical constraints considered during the period of
study such as honesty and confidentiality, challenges encountered during the
research conduction and finally, the alternate research study approach which could
have been followed. The next chapter is the discussion chapter which highlights the
case of Samsung, LG and Videocon. The section focuses upon the organizational
background as well as the SCM strategies followed based upon the data gathered
from the secondary sources and interviews. After this, the finding & analysis chapter,
presents the outcome of the results and address the way SCM strategies differ
across different firms. Through the medium of SWOT Framework (Strength,
Weakness, Opportunities and Threats) (Houben et al., 1999), a detailed analysis for
Sony Electronics has also been conducted. SWOT is treated as a total to analyze
both the internal and external capabilities of an organization (Hill and Westbrook,
1998). Finally, the conclusion chapter summarizes the entire study with the key
findings, the limitations faced and the options available for future research.
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2. Literature Review
2.1Introduction
In order to address the research questions and explore the extent to which Supply
Chain Management (SCM) facilitates increased productivity along with improved
level of customer satisfaction, this chapter of the dissertation attempts to describe
the key terms related with the study such as notion of Supply Chain Management
(SCM), links within the SCM, benefits of SCM, elements of supply chain and
components of SCM. This chapter also provides an insight into the background of
Sony electronics and approaches it has adopted within SCM. Strong emphasis is
laid on the way Sony uses the Corporate Social Responsibility (CSR) strategy within
the Procurement from two varied perspectives i.e. the product procurement
processes and the fabrication processes.
2.2Notion of Supply Chain Management (SCM)
Several scholars have defined Supply Chain Management (SCM) as basically an
approach followed by the organizations to effectively and efficiently manufacture,
distribute and transport goods from one end to another. The process involves
various stakeholders and actors (both human and non-human) such as supplier,
dealers, producers, customers, storehouse, vehicles etc. According to Lambert et al.
(1997), the concept of supply chain management can be precisely described as an
arrangement of organizations that put forward products and services in the
marketplace. A supply chain encompasses all phases concerned, directly or
indirectly, in satisfying a purchaser demand. According to Handfield et al. (2005),
9
apart from the producer and vendors, the supply chain also embraces commuters,
storehouses, merchants and consumers.
In this era of cut throat competition, supply chain management has evolved out as
an extremely significant application of competitive benefit for various companies and
firms across the world. The effect on Supply Chain Management (SCM) has
augmented speedily, which is illustrated by the growth in Internet, logistics, stock
supervision, demand chain administration, association management and ethnicity
differentiation. Supply Chain Management (SCM) is considered to be an expanded
management concentration that includes the collective influence of all the
organizations concerned with the manufacturing and distribution of goods and
services, from dealers to producers then suppliers and lastly, to the customers. This
particular concept of supervising production presupposes the fact that all the
organizations concerned in the procedure of providing goods to the customers are
fraction of a system or supply chain. It embraces everything essential to gratify
consumers and recognizes products consumers are more inclined towards
purchasing, techniques that should be employed to manufacture them, and lastly,
ways of distributing them. The notion of supply chain makes sure that the consumers
obtain the correct products at right point of time at the desired location that to at a
very affordable price. Further, mounting competition, complication, and geological
extent in the industry have resulted to this widen range and ongoing enhancements
in the abilities of the individual computer have made augmented the outcome of
supply chain. Moreover, internet and electronic mail have greatly modernized
interaction and data conversation, making easy the essential flow of facts amongst
the distinct organizations present in the supply network.
According to Oliver and Webber (1982), Supply chain management can also be
defined as the range of procedures synchronized by a company to acquire and
administer provisions. The supply chain management has gained a lot of acceptance
since the year 1990. Moreover, prior to this period, industry utilized concepts like
logistics and operation management rather than SCM (Huan et al., 2004). Some
researchers state that the supply chain management is the amalgamation of three
10
approaches namely; systems concept, the trade off concept and lastly, total cost
concept.
The main objective of the supply chain management is to mirror the association of
provisions, procedures, and individual who buy unprocessed materials, convert them
into finished products, and finally allocate them to the desired consumers as an
incorporated network, instead of a set of distinct, although to some extent
interconnected activities. The magnitude of such amalgamation could not be
exaggerated for the reason that the associations of the network are the means to
attaining the desired objectives. Lastly, every corporation comprises of a supply
chain, however not all the corporations supervise their supply chain for premeditated
gain.
Moreover, it is simple to comprehend in theory, the supply chain management
(SCM) turns out to be more difficult as the organization and variety of products
offered expands, and the more global the positions of its dealers, perspective
buyers, and allocation services. Supply chain management is believed to be
complicated due to the fact that firms may be a division of various supply chain at
the same point of time. For instance, a producer of shoe material at the same time
can become a component of several other supply chains as well like mechanical
goods, tires, industrial products etc. Moving ahead, the following section will now
detail the links between the Supply Chain Management (SCM).
2.3Links within the Supply Chain Management (SCM)
The essential job of a firm does not vary, even if it adopts supply chain management
or not the habitual operations of a firm are still carried out. The sellers are
nonetheless obliged to provide material, and production units still produce, allocation
still allocates, and the purchasers still buy the products and services. The main
disparity in an organization that adopts the approach of supply chain management is
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the fact that it reallocates it’s concentration to embrace the associations among the
networks from what happens within each of the networks.
A corporation involving successful supply chain management also acknowledges
that the chain comprises of various associations that expand further than the usual
limitations of the company. Administration of the associations is the phase where the
amalgamation of the supply chain initiates. Any enhancement in or disturbance to
the chain connections influences the complete supply chain.
A large range of actions take place in the supply network that is highly unexpected
i.e. the vendors can make before time or delayed distribution, the purchasers can
augment, diminish, or can at times call off orders and the fresh consumers can make
huge orders. Besides, there can also be situations like equipments or trucks can
stop working, the workers can get unwell or can leave etc. During earlier period,
corporations arranged for ambiguity and enhanced their amount of client
contentment by permitting stock levels to increase but this is no longer considered to
be a satisfactory explanation. Large stocks convert to amplify transportation charges
and threats that can restrict an organization’s elasticity.
All through the supply network, stock is usually produced and detained at many
outlets. During any moment, a fraction of that stock can be condensed or eradicated,
the organization reduces costs and intensifies profitability levels. Reducing the
extent of time it involves moving a good from one network to the next also cuts down
the cycle time of the whole chain and thus augments competitiveness and consumer
contentment. Organizations that employ supply chain management accounts in
considerable cost and cycle time decline. After having thoroughly discussed the
concept of Supply Chain Management (SCM) and the role of various involved
players, the section below focuses on the benefits of the Supply Chain Management
(SCM).
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2.4Benefits of Supply Chain Management (SCM)
SCM is not just an approach to manage production and transportation of goods and
series but by means of the augmented clarity throughout the supply network and
flexible supply chain system, one can be extra receptive and can feel and react
speedily to alterations and rapidly take advantage of new prospects. SCM involves
several other benefits as well such that it also provides a general information
structure that assists interaction as well as teamwork and makes possible for a
person to better acclimatize to and satisfy consumer wants. Further, it offers a
platform to the organizations so that they can easily track and keep an eye on
acquiescence with respect to factors such as surroundings, wellbeing and security. It
is a well known fact that information lucidity and actual-time business astuteness can
result in comparatively smaller cash-to-cash cycle durations. Moreover, condensed
stock levels and incremented stock turns throughout the chain can help to bring
down total costs.
With the help of Supply Chain Management, one can also reduce operational
expenditure with timely scheduling for obtaining, producing and carrying. Better
arrangement, produce and implementation tracking can result in enhancement in
functioning and superiority and reduced costs. Further, organizations can also perk
up profit margins by means of enhanced harmonization with business
associates. Lastly, rigid association with trading associates helps to keep supply
chain allied with existing business stratagems and preferences enhances company’s
overall outcome and accomplishment of set objectives. The figure below
summarizes the various benefits of the Supply Chain Management (SCM) approach.
13
Fig. 1 Benefits of Supply Chain Management (SCM) (Put your name here, 2010)
Moving ahead, the following section will now provide a detailed analysis of the six
main elements of the supply chain process.
2.5Elements of Supply Chain
As per the SCM literature, there exist six main components of a supply chain
namely; production, supply, inventory, location, transportation and information.
Further, all the six elements listed above have been precisely discussed in the
continuing paragraphs.
Production
The strategic pronouncements related to production lay utmost emphasis on what
consumers desire and the marketplace wants. This foremost phase in formulating
supply chain dexterity considers the fact that what and how many goods are to be
14
Quick and Easy interactive between various processes
related to the organizational business
processes.
Existence of general inforamtion structure
throughout the organization.
Helps reduce the overall cost and thereby also cut
down budgets.
Enhanced Harmonization with business associates.
Helps strategically align business processes with various stakeholders as
well as companys objectives.
manufactured, and what, if any, components ought to be created at which plants or
contracted out to competent dealers. These strategic resolutions related to
fabrication should also concentrate on capability, superiority and amount of
commodities, taking into account that consumer want and contentment should be
satisfied. In contrary to this, operational decisions, concentrate on planning
workloads, continuance of tools and satisfying instantaneous customer or
marketplace wants. However, quality controls, along with workload harmonizing are
concerns which require to be contemplated while coming up with these decisions.
Supply
Secondly, a company needs to find out what their competence are or if the services
are capable to manufacturing, both cost-effectively and professionally, at the same
time maintaining good quality. But a large amount of organizations are not efficient
enough to offer outstanding outcome with the fabrication of all fragments. Moreover,
outsourcing is considered to be an exceptional choice for those goods and parts that
cannot be created efficiently by a company’s provisions. However, the companies
should vigilantly decide on dealers for raw stuffs. At the time of selecting a supplier,
concentration must be on fabricating speed, superiority and elasticity while at the
same moment decreasing costs or upholding low cost levels. In simple words,
strategic pronouncements need to be developed in order to decide the main abilities
of a provision and outsourcing affiliations must expand from such judgments.
Inventory
Thirdly, strategic decisions lays emphasis on stock and the amount of goods that
need to be in-house. A weak stability prevails among too much stock, which ranges
somewhere between 20 to 40 percent of their total worth, and not sufficient stock to
satisfy marketplace needs. This is believed to be a serious concern in effectual
supply chain management. Operational stock pronouncements turned around most
favorable levels of inventory at each and every position in order to make sure
purchaser contentment as the market wants vary. Moreover, control strategies
should be referred, so as to establish accurate levels of provisions at order as well
15
as reorder locations. These degrees are important with context to daily functioning of
a company and to maintain client contentment levels sky-scraping.
Location
Fourthly, the location decisions relies on marketplace wants and fortitude of
purchaser contentment. Strategic decisions ought to concentrate on the location of
fabrication plants, allocation and accumulation provisions, and locating them in
leading places of the market in which the company operates and serves. Moreover,
as soon as the purchaser markets are decided, long-standing obligation should be
done on locating fabrication as well as stocking provisions as near to the customer
as is realistic. In markets where mechanisms are frivolous and market based,
provisions need to be placed near to the ultimate-consumer. In case of heavier
industries, watchful contemplation has to be done so as to establish the place where
plants ought to be situated in order to be near to the raw stuff resource. Decisions
relating to position must also take into account tariff and tax concerns, particularly in
inter- territory and global allocation.
Transportation
Strategic transportation judgments are intimately connected to stock decisions along
with satisfying client wants. By means of air transport, the manufactured goods get
out more rapidly and to the purchaser advantageously, but the expenses are
comparatively more with contrast to shipping by boat. However, employing sea or
rail time, again implies having greater degrees of stock in-house so as to satisfy
immediate wants of the purchaser. It is intelligent to take into account the fact that
since about 30 percent of the total charge of a creation is included by transportation,
employing an acceptable transport medium is a considered to be a vital strategic
decision. Apart from this, client provision levels should be accomplished, and this
many times establishes the medium of transport brought into play. Further, a
majority of times this might seem to be a functional decision, but deliberately, a
company needs to have efficient transport medium with the intention to make sure
an even allocation of commodities.
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Information
Lastly, effectual supply chain management calls for acquiring data from the
viewpoint of ultimate-employment, and connecting data resources all through the
network for pace of trade. Moreover, overpowering paper course and incongruent
computer arrangements are objectionable in the present day competitive world.
However, nurturing modernization needs sound orderliness of data. Connecting
computers by means of networks as well as the internet, and reorganizing the
information course, combines data and makes easy rapidity of goods. Further,
account supervision software, produce configurators, company supply planning
structures, and worldwide interactions are believed as the chief facets of effectual
supply chain management (SCM) stratagem.
The figure below illustrates the six elements of the Supply Chain.
Fig. 2 Elements of Supply Chain (Put your name here, 2010)
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Elements of Supply Chain
Production
Supply
Inventory
Location
Transportation
Information
After having discussed the various elements of Supply Chain, the discussion now
moves further to highlight the five main components of Supply Chain Management
(SCM).
2.6Components of Supply Chain Management (SCM)
To begin with, Supply chain management (SCM) can be termed as the
amalgamation of art along with science that attempts to enhance the manner by
which an organization searches the raw constituents it requires to develop a good or
service and distribute it among the ultimate consumers. The sections below bring to
light the five key aspects of Supply Chain Management (SCM).
Plan
Firstly, the plan is considered to be a strategic part of Supply Chain Management
(SCM). Moreover, organizations require a stratagem in order to manage all the
possessions that aid in satisfying client want for their good or service. The major
fragment of SCM planning is fabricating an array of metrics so as to keep an eye on
the supply chain to make sure it is well-organized, costs less and provides good
quality along with worth to consumers.
Source
Secondly, organizations should decide dealers to supply the products and services
they require to produce their commodity. As a result, supply chain supervisors need
to build up a series of pricing, distribution and payment progressions with dealers
and develop metrics so as to supervise and enhance the associations. However,
after this, SCM supervisors can set collectively procedures for supervising their
products and services stock, encompassing getting and confirming shipments,
relocating them to the production provisions and approving dealer expenses.
18
Make
Thirdly, make is considered to be a production stage. Supply chain supervisors plan
the actions essential for manufacturing, checking, packaging and distribution. This is
seen as highly metric-concentrated section of the supply chain in which the
organizations are capable of evaluating quality levels, fabrication yield and employee
efficiency and output.
Deliver
This particular phase is referred as logistics by a lot of Supply Chain Management
insiders, wherein the organizations synchronize the reception of orders from
consumers, build up a system of storehouses, decide on delivery services to provide
goods to consumers and build up an invoicing structure so as to collect payments.
Return
The last phase of the supply chain i.e. return proves to be quite challenging part for
a large number of firms. Supply chain schedulers need to generate an approachable
and bendable system for getting faulty and surplus goods back from their consumers
and assisting consumers who have issues regarding the supplied goods.
The figure below pictorially illustrates the five key components of the Supply Chain
Management (SCM).
19
Fig. 3 Components of Supply Chain Management (Put your name here, 2010)
After having deeply explored the concept of the Supply Chain Management (SCM)
and its various roles and elements, the section below will now focus upon the case
of Sony Electronics.
2.7Background of Sony Electronics
Being acquainted with the fact that ecological safety is among the most imperative
concerns in front of mankind in the present day, Sony encompasses a good
admiration for environment in all of its business proceedings. Along with this
viewpoint, Sony has described ecological preservation as a significant fraction of its
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Components of SCM
Plan
Source
MakeDeliver
Return
administration stratagem. The Sony Group has shaped a worldwide achievement
plan and carries out ecological perpetuation agendas. This agenda encompasses
five key aspects i.e. decreasing the environmental influence of business actions and
fabrication procedures, scheming environmentally responsive goods and
encouraging reusing, initiating ecological techniques, encouraging the environmental
edification and complete contribution of Sony staff and making known environmental
know-how to the people.
Sony Company is considered as one of the unsurpassed and recognized brands in
customer electronics and stands second globally in electronics after Matsushita
Electric organization. The company was initiated subsequent to World War II in the
year 1946 in Tokyo by two individuals namely; Masaru Ibuka and Akio Morita under
the name Tokyo Telecommunications Engineering. Additionally, the organization
initiated with fewer than 200,000 yen--vaguely above $1,500 and started exploring.
In the time of about less than a year, the corporation came up with its foremost
offering i.e. a power megaphone and in the year 1950, it fabricated Japan's foremost
tape recorder.
Ever since it was launched, Sony has brought into view a wide range of ground-
breaking goods, such as the Trinitron television, the Walkman handy cassette
player, the Betamax VCR, the transistor radio, the CD player and the PlayStation
game console. Moreover, the organization’s electronics section--which comprises
audio and as well as goods, personal computers, televisions, computer peripherals,
monitors, electronic equipments and telecommunications devices account to around
two-thirds of the total proceeds. According to the recent research, sales of software
and game consoles report to be around 9 percent of proceeds. However, other 10
percent of the total proceeds are received from Sony's music trades, which take in
the Columbia as well as the Epic documentation brands. Moving ahead, about 7
percent of proceeds are derived from Sony's television and motion picture business,
which encompasses the Columbia TriStar studio. Sony's additional chief business
section is insurance, from where approximately 6 percent of proceeds are received.
21
At the time when Sony decided to spread with extensive range of products
throughout the world in somewhere around mid-1950s, it searched for a fresh
designation due to the fact that the initials TTK were previously in use. As a result
the organization developed its name by amalgamating two words i.e. the Latin
expression for sound, "sonus," as well as the American expression "sonny." The
corporation desired a word that was absent in all the language for business grading
grounds. A number of people within Sony inquired the alteration due to the time
used on building its initial name acknowledged throughout the globe, but in the year
1958, the brand name was formally altered to Sony Corp. In subsequent to this, in
the year 1960, the company commences its U.S. division. Further, after eight years
in a row, the company launched a division in the United Kingdom. The corporation
sustained to develop in the year 1970, when it extended to Spain, in the year 1973
to France and in 1986 in Germany.
Even though the research and development (R&D) segment of Sony is highly
different from rest of the organizations worldwide with its huge adaptability, Sony, in
its quintessence is continues to be a long-established Japanese corporation in a
number of ways. There exist life-time recruitment, with well-built standards and
principles which further develop stratagems by means of their proceedings.
Moreover, status is offered (the crystal award) rather than bonuses (not important
sum) for higher accomplishment. There also prevails a sound superiority structure
like the adviser and trainee association that is characteristic of a Japanese
company. All this could be efficiently categorized as the educational institution in
which stratagem development is of cooperative manner. Further, cooperative
apparition and anxiety in work force: that is distinctive of several Japanese, could be
undoubtedly observed in the mission statement "Management Policies”.
The foremost idea that turns up in individual minds with respect to the corporation
and various manufacture of Sony is its high expertise overflowing with devices
electronic products and modernization. Moreover, it was also this modernization that
creates Sony the best corporation. Sony has employed its modernization in creating
22
marketplaces out of thin air, developed a multibillion, international electronic empire
with goods like the Trinitron, the transistor radio, VTR and the Walk-in that altered
day to day domestic lives perpetually. Though, this customer targeted goal for
vividness and stable improvement rather than laying emphasis primarily at proceeds
is also expected to do a lot with existing issues Sony is facing i.e. sales and
proceeds are comparatively low or are going down, capital investment cost as well
as R&D are increasing, challengers are stepping in with imitators, the clash among
VHS and Beta and the hunt for an outstanding commodity like the Trinitron.
However, this instability and prominence on fresh commodities rather than laying
emphasis on profit and loss statement has at all times been an integral fraction of
Sony ever since its commencement time. Additionally, for each and every booming
commodity like transistor radio, R&D expenditure frequently went very high that it
hard-pressed the company to the limit of insolvency. This could also be observed
from the view of the depositor in which even though sales have risen up extremely
during the precedent twenty years, the inventory cost has continued to be
comparatively less.
Sony's existing monetary troubles are attached into its business traditions which
were declared more than 30 years ago. With such a huge worldwide business,
superior scheduling and better application of stratagems should be taken into
account. The company can initiate with the accomplishment of a fresh mission
statement, with earnings and profits of the corporation attached more strongly to day
to day functions. Moreover, internally, the four factors namely; the administration, the
creators, the fabrication and the advertising should attain enhanced interaction as
well as collaboration. However, association and collaboration among challengers
must also be enthusiastically grouped after so as to generate standards in fresh
segments. Sony must intend at being the head rather than being the individualist.
With context to bringing down cost, Sony must sincerely think about laying down
functions in other Asian nations with the intention to obtain gain of the inexpensive
workforce and the up-and-coming marketplaces. Finally, diversification, rather than
following the speedy altering and effortlessly replicated customer goods
23
marketplace, Sony must make use of its technical proficiency for complex business
as well as office tools.
After having explored the case of Sony in detail, the following section will now
attempt to discover the Supply Chain Management (SCM) approaches followed at
Sony Electronics.
2.8Supply Chain Management (SCM) at Sony Electronics
To begin with, Sony fabricates its goods in a range of locations of the globe with the
view to satisfy hopes of its clients situated worldwide. Its guiding principle is to get
hold of fragments and resources for Sony goods with "sky-scraping superiority,
competitive costs, and an unwavering delivery" from plentiful vendors throughout the
globe. To attain this, the company tags along a variety of guidelines.
Along with increasing stakeholder inclination towards ecological concerns, human
rights, and workforce situations in industries, the influence on business occurring
from alterations in the employee situation because of changes in the functional
surroundings is a mounting reason for apprehension. As a result, shielding human
rights, making sure suitable employee conditions and taking into account the
ecological concerns all through the supply chain have attained higher significance.
Sony perceives suitable values in human rights, labor situations and the
surroundings as an imperative matter in regard to its CSR activities. Moreover,
supply networks overlap significantly in the electronics industry, with numerous
producers of completed goods sharing identical subcontractors and components
providers. Sony is an originating associate of the Electronic Industry Citizenship
Coalition (EICC), a CSR union which was formulated in the year 2004 with the
intention to enhance tactics to concerns connected with human rights, employee
conditions and the atmosphere at each and every phase of the supply network of the
electronics industry, encompassing secondary vendors. Apart from this, in the year
2004, EICC affiliates developed an essential code of conduct sourced on industry
most excellent practices. However, till June 2010, the EICC embraced 48
24
contributing organizations from Europe, Asia and the America, with affiliates taking
into account producers and OEM organizations. In the year 2005, Sony initiated the
Sony Supplier Code of Conduct, on the grounds of industry unsurpassed procedures
as emphasized in the EICC code of conduct, so as to make sure that the vendors
completely comprehend Sony’s prospects in extra detail and that the code is fully
acknowledged by the providers of goods and materials throughout the world. Sony is
decisively dedicated to CSR in the supply network. It carries out regular interaction
with vendors throughout the world, evaluating dealer acquiescence with the Sony
Supplier Code of Conduct and operating along extra inquiries as required with
respect to compliance outcomes. For particular vendors, Sony also carries out
mutual audits sourced on the EICC’s code of conduct. By means of these and other
initiatives, Sony would prolong to operate with vendors so as to enhance procedures
and make sure fulfillment with the Sony Supplier Code of Conduct. Moving ahead,
the EICC also maintains a check on regular supply chain concerns in front of the
electronics industry. In retort to increased actors concentration, the EICC examines
these concerns as ecological deprivation, the human privileges of employees, and
disagreements associated with the mining of exceptional metals necessary in the
production of electronics goods. At the closing stages of the year 2009, the EICC
finished a research of the employment of metals prevailing in the electronics industry
as a whole and of the prospective for competent market-wide activity, by means of
which it recognized the uncommon metals generally utilized in electronics goods.
Further, Sony would prolong to involve itself in market-wide initiatives so as to
outline the courses of these metals. Sony also offered assistance for a track able
venture for tin formulated in March 2010 by a tin market company namely; the ITRI.
CSR in Procurement
To begin with, Sony takes into account Corporate Social Responsibility (CSR) in
procurement from two distinct viewpoints. The first one is connected with products
procurement processes and takes in developing along with upholding good business
associations with dealers, looked upon as stakeholders allied with Sony, lined up
25
with appropriate regulations and policies, also including internal regulations. The
second one is connected with fabrication procedures and embraces offering the
essential hold up to comprehend CSR from these point of views as the
surroundings, human privileges and labor situations. Moreover, the company is
highly dedicated to carrying out procurement actions based on reasonable business
procedures, lucidity and equivalent prospects. Sony's production representatives are
not allowed to structure individual connections or associations on the grounds of
possible individual profit with any dealer. However, in Japan, procurement
representatives allied with the electronics business are obliged to take part in e-
learning curriculums especially formulated to make sure a methodical
comprehension of the organization. Additionally, Sony Company has also initiated a
hotline for dealers in order to account fulfillment infringements with context to Sony
company human resources or managers. Suitable measures are carried out in retort
to such information as soon as authenticity has been established.
Moving ahead, along with the superiority of the goods Sony offers to buyers, it also
makes sure apt standards all through its fabrication procedures from distinct
viewpoints such as surroundings, human privileges and employees’ situations. As a
component of strategy for produce superiority, the organization considers proper
standards in surroundings, human privileges and employees’ situation as a very
important matter with respect to its Corporate Social Responsibility actions. In
specific, as supply networks have extended to take in budding nations, this curiosity
has become wider to include not only the organization’s individual fabrication
ranges, along with those of the organizations that provide it with components and
resources as well as the organizations to which it delegates task. Whilst functioning
along with other firms in the marketplace to build up a general structure, Sony is in
quest to bring in "CSR procurement," i.e., CSR administration agendas by means of
supply network that consists of officially permitted fulfillment, recruitment, work-
related fitness and security, and ecological safety.
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Policy for CSR in the Supply Chain
Sony's prospects of its dealers consist of acquiescence with regulations, policies and
social values and an ecological agenda. Moreover, provided the worldwide character
of its dealers, Sony has directed the market by bringing in their own worldwide
principles for administration of chemical substances, known as Management policy
for atmosphere-connected materials to be restricted which are incorporated in
components and resources. However, the company has also set up the Green
Partner Environmental Quality Approval (GPEQA) plan for its dealers. Sony also
upholds a universal worldwide excellence standard for components by buying
electronic fragments only from dealers who have efficiently conceded an audit along
with being qualified as Green associates. Additionally, the Stakeholders's benefits
have gone up noticeably in organizations’ overall accountability for their goods,
embracing concerns like individual rights, workers conditions and ecological safety
of OEM/ODM firms and components providers. In rejoinder, the company formulated
the Sony Supplier Code of Conduct, founded on the grounds of Electronic Industry
Citizenship Coalition (EICC) Code of Conduct and is directed towards the principle
that ever since suppliers are occupied in the production of Sony goods, they ought to
stick to the Code and deal with such concerns, and as a result meet the terms of
Sony's values.
Moving ahead, the company’s essential procurement agreement with resource
providers puts forward scrutinizing associated regulations and policies and the Sony
Supplier Code of Conduct. The company requests all prospective suppliers to follow
the Code and to carry out evaluations as a division of necessities of a beginning
assessment. It is company’s essential strategy to re-evaluate its business
association with the contractor on the occasion that a prevailing supplier is
established to have carried out a chief contravention of the Sony Supplier Code of
Conduct, or does not show evidence of a suitable level of collaboration to
researches as well as audits. In case if an infringement of the Sony Supplier Code of
Conduct has been accounted by a third party and an infringement are established,
Sony would ask the dealer to undertake counteractive measures and account back
27
on the advancement. Further, if the infringement has been done on the part of a
secondary supplier, the company will operate in collaboration with the applicable
main supplier to advise remedial measures.
Sony's Structure for Promoting Supply Chain Management
Sony's main office section, Corporate Social Responsibly (CSR), procurement
processes and production functions factions, are principally encouraging supply
chain management in CSR inventiveness, in collaboration with another head
workplace-allied sets, business sets and production places. The head office's CSR
faction remains abreast of outside inclinations and interacts with people associated,
drawing to devise corporation-wide fundamental supply chain management
guidelines. The procurement faction is accountable for accomplishment to dealers,
making sure that suppliers meet the terms of Sony Supplier Code of Conduct by
calling for fulfillment to the code, carrying out required researches and audits,
examining the outcomes thereof and putting into practice essential procedures.
Implementation Framework
Formulation of the Sony Supplier Code of Conduct
In the year 2005, Sony came up with the Sony Supplier Code of Conduct, on the
grounds of market’s unsurpassed procedures as underscored in the EICC Code of
Conduct, to make sure that suppliers precisely comprehend company’s prospects in
extra detail and the code is respected by the dealers of goods and resources
throughout the world.
Encouraging Initiatives by Vendors
Initially, as fragment of its attempt to evaluate dealer observance with respect to the
Sony Supplier Code of Conduct, Sony has come up with evaluation questionnaires
28
and descriptive congregations for its around 1,300 suppliers throughout the world.
During the closing stages of financial year 2008, Sony had carried out 30 of such
instructive meetings for vendors located in Japan, Pan-Asia, Mainland China and the
United States. Sony persists to sustain attempts for vendors to demeanor their
business in a communally accountable way by carrying out evaluations and
additional queries related to follow-up methods. Moving ahead, as of March 31,
2010, evaluations had been carried out in all other than a few of segments where
Sony has vendors and Sony had acquired the outcomes of evaluations from nearly
each and every of its dealers located throughout the world. The outcomes of these
evaluations bring to light the fact that a number of overall trends, encompassing that
organizational growth, i.e., the setting up of employee and lawful administration
procedures, continues at an intermediary phase. Sony will persist to sustain the
attempts of dealers to enhance their actions.
Stakeholder Engagement
With the intention to develop a structure with the intention to encourage effectual
and successful supply chain management, the EICC schedules discussions every so
often with NGOs, communally accountable depositors and other people associated,
in which Sony is also taking part. These negotiations were conducted, in Mainland
China, Mexico, Switzerland, the United States and the Netherlands.
3. Challenges
To begin with, the major concerns related with the supply chain management of
Sony are namely; Employee Issues, Human Rights and disagreement in Metal
Extraction procedure. The EICC keeps an eye on frequent concerns affecting the
electronics industry. In retort to increased stakeholder concentration, these
companies look into such concerns as ecological deprivation, the individual rights of
29
employees and disagreements associated with the extraction of exceptional metals
necessary in the fabrication of electronics goods. In the year 2008, the EICC as well
as the GeSI have initiated an operating set so as to deal with these concerns, and
are finding out alternatives for industry extensive reactions. As of the closing stages
of the year 2009, the operating set had accomplished an examination of the present
employment of metals in the electronics business as a whole and the prospective for
well-organized industry broad procedures, and had chosen metals utilized frequently
in electronics, encompassing tantalum, cobalt and tin. Additionally, the company will
prolong to join forces with industry wide attempts to mark out these metals, from
excavation locations through to employment in electronics equipments. In the
conflict-torn Democratic Republic of Congo, it is highly perceived that mine
employees are being faced with severe human rights mistreatments, and there are
issues that cash brought in by the trade of extracted metals is being utilized by
armed sets in order to sponsor their actions. In view of these circumstances, in
March 2010, the ITRI, a tin industry association, initiated a traceability venture for tin.
The objective of this plan is to recognize the excavation sites providing tin for
sending abroad from the Democratic Republic of Congo, thus making possible
source confirmation and industry accountability. Moving ahead, making out the
significance of this proposal, Sony has proped up the scheme, as have rest
associates of the EICC. Further, the EICC also encourages enduring, vigorous
conversation with NGOs, business correlations and other outside stakeholders.
Sony will prolong to deal with concerns of corporate social responsibility (CSR) by
means of collaboration with the bigger electronics industry.
Moving ahead, the section below first explains the concept of PEST analysis
(Political, Economical, Social and Technological Forces) and the moves ahead to
perform the PEST analysis for Sony Electronics.
PEST Analysis of Sony
30
According to Kotler (1998), the paradigm of PEST (Political, Economic, Social and
Technological) analysis can be stated as a platform for evaluating business
standing, objectives and industrial development or deterioration. This approach has
proved to be very useful for marketing scheduling, business growth and product
innovation. The concept comprises of four factors namely; political forces, economic
forces, social forces, technological forces (including mechanization, rate of
technological variations, R&D activities).
The following section throws light on Sony’s PEST analysis.
Political Forces
Firstly, the political factors for Sony electronics could be altered during any point
of time. The Government possesses the authority to modify any guidelines and
rules which might influence the company at that particular time. The credit crisis
and the downturn may happen to decrease, thus leading to enhanced trades for
Sony electronics. However this also implies that the identical has taken place for
Sony’s contenders. As a result, Sony is required to build up thoughts on how to
remain a step ahead of its rivals. The regulations that can influence Sony
Company would encompass new international laws. Moreover, globally the
Government might modify or augment trading limitations which will without doubt
alter the ways in which Sony operates, due to the fact that it needs to carry out
its business. Additionally, the Government entities also have the authority to
modify minimum income, tax, VAT etc. These facets should be focused on so
that the company is geared up for any most important worldwide variations.
Besides this, minimum salary will also amplify due to the fact that reports point
out that ever since the year 1999 it has augmented from more than three pounds
to five.
Economic Forces
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At present the condition of our economy is not in a sound position. Further, the
economic development has minimized which implies that the enlargement of the
economy is unconstructive. The downturn as well as the credit crisis may
possibly be reduced during the next subsequent years.
Moving ahead, economically, because of this several variations can take place
like the interest and exchanges rates. Moreover, because of downturn being
reduced in the upcoming future, exchange rates might also drop down, though
bit by bit. Sony ought to be conscious of any trading limitations the Government
has prepared. In view of the fact that Sony is a global
corporation the exchange rates might be dissimilar to whichever nation they
carry out trade with. In case if the exchange rates in distinct nations have varied,
Sony electronics would require to put efforts on what prices are their
manufactured goods being traded at and if it would be meaningful.
Social Forces
It is quite true that socially, Sony Company would be envisaged to perform well.
The corporation has by now attained a good standing in the market due to the
quality of goods and services they facilitate their customers with. Moreover, ever
since its set up, the company has been showing unprecedented enhancement in
technology has been enhanced and is on the continuous verge of innovations so
as to come up with exceptional products. However, the company can even have
fresh challengers which might put influence on them. Sony should make sure
that they remain a step ahead with respect to expertise and knowledge. The
company ought to be capable of developing ground-breaking tools for people as
that’s what it would depend on to keep going and attain high profitability levels.
In addition, people have preferences which Sony Corporation should efficiently
acknowledge in order to develop products which can satisfy the customers to
maximum and relate towards them. For instance, a large number of young
individuals like to listen to music; thus Sony would produce commodities which
can make possible for the people to listen to music at anyplace and at any point
32
of time. Further, while planning and developing products the company should
keep in mind the fact that different individuals have distinct preferences with
respect to style, trends, actions etc. Lastly, Sony electronics should also
enhance their work of thoughts so that they can be capable of gratifying their
clients and that they have proficiently modified with the growing of the
organization.
Technological Forces
Lastly, the technological forces for Sony organization are utmost essential to
explore. Sony Company operates around the employment of up-to-date expertise
and techniques every day. Moreover, it relies on technology so that it can offer
competent efficiency and productivity of work throughout the world. Sony would
take into account improved and fresh technology so as to augment its
productivity and profitability levels and to remain a step ahead of its competitors.
Further, the company would require to make use of new techniques to carry out
its research and expansion which will assist the business in developing new
goods by means of customer knowledge and also by carrying out market
research on regular basis.
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3. Research Methodology
3.1Introduction
To begin with, this specific fraction of the dissertation brings to light the research
pattern, techniques and strategies that would be taken into account with the view to
deal with the particular research questions. The study revolves around the degree to
which Supply Chain Management (SCM) technique can help organization enhance
profitability and thereby increase the amount of customer level satisfaction.
Additionally, it outlines the facts investigation techniques and the manner in which
the research has been executed. This is after that carried on by the morals
constrictions that have been considered in mind all through the phase of the
research. Further, challenges encountered at the time of the research and the
confines of the preferred research methodology are enlightened. Lastly, the final
segment of this stage would concisely underline the alternative research tactic which
could have been taken up.
3.2Justification of Theoretical Approach
A large amount of attention is given by almost all sectors and industries, whenever a
new technology is developed. Today, with an attempt to gain competitive edge,
organizations invest millions and billions of dollars every year in new technology and
developing a strong infrastructure. And the same thing happened with the recently
released Supply Chain Management (SCM) approach. This research attempts to
analyze the way SCM technique can help firms to gain increased level of productivity
as well bring strong customer base. To carry out the research, the case of Sony
Electronics has been considered and an attempt has been made to explore its SCM
approaches. Further, it will be quite interesting to compare the same with the
approaches of LG, Samsung and Videocon.
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3.3Research Paradigm
Primarily, the literature review fraction on top unquestionably confirmed that this
study “is not connected with being predisposed or disturbed about the modus
operandi but the magnitude of the expositions is grounded on the amount to which it
makes possible for others to figure out the happening and builds connotation to
those being investigated” (Darke et al., 1998) and as a result the interpretive pattern
has been brought into play. It is allied with person appreciation and figuring out the
undertones. According to Orlikowski & Baroudi (1991) the interpretive method
imparts significance to an occurrence grounded on logic assigned to them by the
aspirants and stakeholders associated with the circumstances. It gives high
importance to customs, conviction and assessment structures and it is fabricated
around the conception of ontology wherein genuineness is bigoted and is looked
upon as a social upshot built by community. Additionally, Darke et al. (1998) adds
asserts that the entire idea of interpretive model looks upon people as social
performers around whose morals and standpoints the whole structure revolves.
The precise case study brought to light by Walsham (1995) as the “method for such
interpretive explorations” has been preferred for this particular study. Moreover, the
case study endeavors at dissecting real world arrangements by groping the facts
obtained from plentiful locations and resources including interviews, questionnaires,
surveillance, credentials and textual facts. However, the study offers the exceptional
surroundings to implement case sourced study in view of the fact that it takes in
interviewing a several people encompassing top management, personnel and
employees of the distinct firms. Furthermore, as Darke et al. (1998) asserts that
case study is believed as one among the most widespread and extensively
employed research technique in the area of information systems because it aids to
precisely comprehend the intricacies of interrelations among supply chain
management (SCM) and the managerial arrangements, it is highly suitable for this
research. Consequently, case study made available the most fitting means to
discover the method wherein an indiscernible and interconnected reliant system
35
prevails among vendors, clients and the retailers. The continuing sub- parts will now
concentrate on the epistemology as well as the ontology standings of the
interpretative approach.
Epistemology
According to Walsham (1995) epistemology focuses on the character of
acquaintance assertions. Additionally, Archer (1988) has typified the three chief
theoretical standings in epistemology namely; Positivism, Non-positivism and
Normativism. According to Archer (1988), positivism is nothing but an
epistemological standing mirrored by the outlook that actuality and importance are
rationally and epistemologically diverse and for this reason significance-liberated
acquaintance is doable”. Moreover, it is a notion wherein scientific familiarity
embracing only data and acquaintance is created by way of descriptive and
extrapolative hypothesis. Positivism standing by and large takes in techniques such
as sample survey, interviews and numerical amplification of ensuing data (Burrell &
Morgan, 1979). Moving ahead, Archer (1988) also distinguishes positivism standing
with two options. Firstly, non-positivism wherein data and principles are tangled and
tricky to extricate and both are incorporated in technical acquaintance and
‘Normativism’ that highlights that the technical acquaintance is ideological and
unavoidably encouraging to definite fractions of social ends. Further, both Non-
positivism as well as Normativism standings is appropriate and exposed to be taken
on by interpretive explorer. Bearing in mind the range and character of this piece of
research, this study embraces the nomativism outlook of the understanding, wherein
comprehension is regarded as prejudiced and is founded on know-how.
Ontology
At the same time as epistemology takes into account the character of
‘acquaintance’, ontology in contrast puts forward standpoints associated with nature
36
of ‘actuality’. As per interpretive paradigm, Archer (1988) also brings to light two
achievable standings namely; internal realism and Subjective idealism. Firstly, the
internal realism is the outlook that underlines that authenticity prevails as an inter-
biased creation of the collective individual cognitive device. Secondly, in subjective
idealism, each single human being is deemed to fabricate his or her individual
actuality” (Walsham, 1995). However, this research is sourced on actuality along
with impracticality in view of the fact that eventually actuality subsists as an upshot
of person intellect and opinion. Furthermore, the research put emphasis on
inscriptions, rendition, data infrastructure etc that shape up a channel through
interaction and realism. The subsequent part would now elucidate the preferred
research tactic.
3.4Research Methodology
To begin with, this study envelopes both the primary as well as the secondary facts.
Moreover, bearing in mind the time span and source accessibility, interview
procedure as primary method together with a number of secondary facts were
chosen to assemble information. The subsequent lines initially present a concise
outline of the preferred facts gathering location and then particulars of the
interviewing method.
Moving ahead, numerous firms in the present day follow exceptional and pioneering
strategies like Supply Chain Management (SCM), Customer Relationship
Management (CRM) etc for structuring enduring productivity together with
sustainable competitive edge. In view of the goals of this study into account, several
firms apart from Sony like LG, Samsung and Videocon were chosen to implement
this piece of research. Moreover, these locations made available apt means to deal
with the research questions and there subsist not only one but quite a lot of grounds
for picking them. Moving ahead, being a student at the university, it was quite
simpler for me to get hold of and gather facts in contrast to obtaining admittance to a
37
thoroughly new company that takes in intellectual together with political
impediments. Moreover, my supervisor retained few connections in these
companies, as a result it turned out to be quite straightforward for me to obtain
access and carry out interviews at Samsung, LG and Videocon in relation to their
SCM stratagems. Additionally, it aided me bring down time and expenditure. There
were almost no travel expenses drawn in given that the companies were truly nearby
to my location. It assisted save travel duration as well. Lastly, all this was assembled
collectively with my individual curiosity and keenness to investigate the complexities
of the environment involved with the implementation of Supply Chain Management
(SCM) technique. It is a true fact that all this would not have been possible without
the help of my supervisor. He not just helped me to gain access at various
organizations for conducting me interviews but also suggested me lots of good
quality journals and articles to collect the secondary data. The research
methodology was selected in such a case to recognize the network and link that
exist between the customer, supplier and the vendor.
Additionally, we would now talk about significance and advantages of the
interviewing method. According to Fontana & Frey (1998 as cited in Denizin &
Lincoln, 2008), interviewing is among the most widespread and most influential
means to endeavor and appreciate our colleague human beings. Moreover, it is a
concept that is valid for nearly all techniques. Throughout the project, quite a lot of
individuals differing from personnel, workers, top administration were interviewed in
order to throw light on the several Supply Chain Management (SCM) techniques
being pursued together with the manner they have assisted companies. Every single
interview was recorded by means of a MP3 recorder and completely transliterated
for the purpose of investigation (Refer Appendix for interview transcripts). However,
interviewing aided to gather large amount of significant facts associated with
individual comprehension that might have been tricky to come across in secondary
literature or rest of the sources. With regard to the interpretive case studies,
interviews make possible for an explorer an opportunity to “obtain the explanations
that the applicants hold in context to the proceedings and events which have already
38
or are undergoing, and the attitude and objectives of their own selves and other
applicants” (Washam, 1995). In addition to this, interviews are basically of three
kinds: Structured, Semi-structured and Unstructured. In view of the fact that, the
responsibility of this examination was to get a hold of answers to identical questions
from distinct individuals included in distinct functions, all the interviews were
structured. According to Denizin & Lincoln (2008), structured interviews are firmly
characterized and tag along recurring agenda. In spite of this, the two interviews with
the employees were quite semi-structured too. The questions were not very tightly
defined and were based on a semi-repetitive schedule. (Denscombe, 2003) adds to
it by stating that the semi-structured interviews facilitate in gathering broader and
more accentuated information and facts related to the situation from the applicant
rather than particular one line explanations. This was to ensure that the utmost facts
could be obtained and the maximum important ones could be afterward selected.
Further, unreceptive examination could have been preferred as an option or a
supplementary concept to interviews but bearing in mind the little three months
analysis time span, the techniques of interviewing were only preferred.
Moving ahead, as long as the notion of facts investigation is related, Benbasat et al.
(1987 as cited in Darke et al., 1998) explain qualitative research techniques as most
excellent for information technology exploration. It takes in an extensive range of
facts resources including surveillance, interviews, documents, questionnaires, texts
and rejoinders (Myers, 1999). It is quite true that qualitative facts are time and again
regarded as ‘nuisance’ and scrutinizing it is repeatedly an unwieldy, chaotic and
labour-concentrated profession (Van Maanen, 1979) but there at all times prevails
the prospect of keeping away from insignificant facts. At the same time, quantitative
techniques are by and large an additional suitable type of tactic when a hypothesis is
being experienced or improved. They provide an uncomplicated, unswerving and
less time taking device for examining facts. As a result, in situation of quantitative
facts examination, “extra time could be employed on subjects including obtaining
association access, interviewing, deciding on applicants and managing reciprocities,
more readily than on the logical effort of scrutiny” (Van Maanen, 1979).
39
Nevertheless, qualitative facts were most suitable for this particular research in view
of the fact that the chief objective was not to gather statistics and figures but collect
individual’s standpoints once an expertise is brought in and the manner in which it
gets formulated in community. In reality, both qualitative as well as quantitative
research techniques are experiential approaches although in case of quantitative,
data is in shape of statistics whereas in qualitative facts is not in shape of non-
numerical (Punch, 2005). Furthermore, so as to examine and scrutinize the system
developed by varied actors and constituents and bearing in mind the tailbacks of
qualitative facts examination and small research time span, a highly prearranged
activity time plan (Refer Appendix for time plan) was formulated right at the time of
commencement with the intention to keep away from chaos in the closing stages
Besides this, Kent (2001) states that investigation is the procedure employed to
elucidate research questions by inflowing collected unprocessed facts in the data
matrix so as to acquire planned reasonable data. The investigation technique that
had been emplyed in this particular research is ‘data reduction’ technique, wherein a
pre-examination is carried out sooner than the genuine scrutiny to improve the
qualitative facts obtained (Van Maanen, 1979). Moreover, it is recommended that
one must not be highly unbending with approaches and suppositions in case of
conceptualizing information to ascertain that diminution is trouble-free. Further, he
asserts that the opening structures are exposed to conjecture budding, with contrast
to a magnificent outline which could encumber upshots and bring into being
unrelated or awkward information that is not easy to evaluate and can also become
pointless. The continuing segment sums up the ethical matters considered all
through the course of the project.
3.5Ethical Considerations
According to Blaxter et al. (1996), ethical matters play an indispensable role in study.
The concern occurs as a matter of confidentiality and authorization. Moreover,
40
ethical issues connected with interview encompass reliability and judgment as the
chief and exceedingly important deliberation. As a result, it was made certain that
the specifics of the proposal together with interview progression were explicable to
the applicants. All through the interview stage, no recordings were accomplished
devoid of prior permission of the aspirant. Additionally, no political question linked
with morals and ethnicity was included and candidate belief was obtained via
preserving the discretion of responses and holding back genuine names on the
records. Moving ahead, it has been ensured that during the course of the study,
others endeavor is rightfully documented. Further, Maylor & Blackmon (2005) also
lays stress on the verity that “it is enormously noteworthy to properly attribute other
individual’s participation in your study by referencing along with citation and also
focusing on applicable universities plagiarism guiding principles.” Besides, setting up
the proceedings well earlier, the research encountered quite a few challenges which
are enlightened in the continuing part.
3.6Challenges Encountered
It might not appear very suitable but this particular study came across several
challenges right from laying down the organizational plan till organizing interviews.
Initially, we will begin with association project and after this move on to arranging
interviews. Taking into account the character of the subject, it was determined to opt
for an organizational project and carry out investigation on the basis of both grounds
of primary and secondary information rather than drawing inference simply
established on secondary information gathered from books as well as journals. With
the supervision of my supervisor, I ended up selecting an IT based project
concerning Supply Chain Management (SCM) and its benefits. After that, the work
was to decide the best suitable companies for this particular study and where the
highest drawbacks took place. Initially, it was a big challenge to select the correct
domain like which out of several; electronic, consumer goods, retail, aviation, airline
etc. Through lots of healthy arguments, meetings, discussions and exchange of
emails, I finally ended up selecting the electronic industry for conducting my
41
research study. But the challenge not just ended here, due to the holiday season,
most of the employees and top staff members were on holidays. My study suffered a
lot because of this as everything got delayed. As a result, the organization had very
few limited number of working staff which were too occupied with thee work and it
became really tough for me to seek their approval for interviews. However, my
supervisor really helped me in this regard and arranged few interview sessions for
me. The second problem which I faced was because of limited access to academic
data on the internet. I couldn’t in the beginning access all the online journals on the
web as the articles were accessible only to paid members. But this issue was
resolved early as I got access to them through my friends account.
Lastly, the challenges which I faced where like short term and got resolved
immediately. But the study could have been conducted in a better way if the duration
of the overall project would have been greater than three months.
3.7 Alternative Approach
The discussion above evidently highlighted that each and every segment of the case
study model that had been brought into play for this piece of research study.
However, it is always perceived to be a better contemplation to consider a choice
and distinguish the two preceding to authenticating.
According to Myers (1999), ethnographic study is one among the most methodical
research techniques that facilitate the explorer to get hold of “comprehensive
acquaintance linked with the individual, the firm, and an extensive structure inside
which they maneuver”. In addition to this, ethnography is supposed to be
approximately interrelated with case study research although there do prevail
notable distinctions too. For illustration, ethnographic research lays importance on a
superior period of duration and comprises of advanced examiner partaking.
42
Moving ahead, Lewis (1985 as cited in Myers, 1999) also lays emphasis on the fact
that “ethnographers call for submerging their own selves in the lives of the people
they pore over”. Moreover, taking into consideration distinct aspects of ethnographic
investigation, it was considered apt for this piece of research for the reason that the
time span of three months is fairly small and inadequate for the purpose of obtaining
and evaluating large amount of quality facts. Additionally, it is not feasible to
congregate enormous amount of data solely via technique of interviews. However,
other techniques including reflexive annotations, questionnaires etc ought to be
executed together with interviews. Although, as Myers (1999) asserts that as an
ethnographer “deems what people are carrying out and what in reality they affirm
they are carrying out”, he for all time retains a better and thoughtful acquaintance
linked with the research ambiance. Consequently, ethnographic research tags along
efficiently with Phd. research which is executed over a long time period i.e. about
three to four years and explorer is knowledgeable of connecting himself wholly to
congregate facts from a distinct sources and techniques. But unhappily, akin to rest
of the research techniques, ethnography also encompasses various shortcomings. It
impounds the ethnographer to look into just one organization whereas in case study
exploration, a purchaser is highly proficient of getting engrossed with quite a lot of
locations and corporations via technique of interviews etc.
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4. Discussion
4.1Introduction
After having critically explored and examined the secondary literature available on
Supply Chain Management (SCM) and analysis of the SCM strategies at Sony
Electronics, this part of the dissertation study aims to focus on the case of the
remaining three company’s i.e. LG, Samsung and Videocon. Benbasat et al. (1987)
have stated that case description is particularly appropriate for those type of
research studies in which research and theory are at their early stages and where
the experience of the actors are important and the context of action is critically
valuable. The chapter starts with the brief introduction of all three of them and moves
ahead to discuss the SCM strategies followed in the organizations.
The data illustrated in this chapter will later be used in the next chapter (finding and
analysis) to perform a comparative analysis between SCM strategies at Sony
Electronics and those at Videocon, LG and Samsung.
4.2Case Discussion
This section of the study will now focus upon the three pre-selected cases i.e.
Samsung, LG and Videocon in order to explore the various SCM strategies.
The Case of Samsung
To begin with, Samsung Electronics is considered to be an important and renowned
electronics brand, highly distinguished for its modernization in goods like mobile
phones, monitors and TVs. The company which was initiated in the year 1969 has
now turned out to be a main worldwide player with respect to customer electronics
market. At present, the company provides employment opportunities to over more
than 75,000 individuals in a worldwide system that extends over 47 countries.
Moreover, stepping in UK industry in the year 1984, Samsung Electronics (UK) Ltd
44
(SEUK) has been benefited from extraordinary enlargement, chiefly in the spirited
mobile phone manufacturing. Moreover, SEUK had been employing a Ceridian
incorporated HR and payment elucidation for a number of years. The organization
had been depending on paper information for settlement and sign-off along with the
regular reporting. However, this procedure was turning out to be relatively time
consuming. Samsung is a Korean corporation that has augmented to reputation in a
lot of segments over the years. The extent and the range of the corporation is
approximately indescribable, as Samsung is perceived to be one of the biggest and
most assorted organizations throughout the world. Although the firm is generally
acknowledged for their expertise department such as mobile phones, MP3 players,
radios, computer screens etc and it has several other departments as well. The
organization has extended from a modest storefront to the biggest organization in
Korea and the second leading organization throughout the world. Along with the
electronics department, which is believed to be the most money-spinning and
booming one in the globe, the corporation also has extended its scope into finance,
retail, chemicals and straight-up amusement, all with huge levels of accomplishment.
It appoints a number of South Korea's handpicked workers, embracing the majority
with PHD level edification. The corporation contains a number of most faithful
workers around and several operate daily which implies no holidays or weekends
breaks.
Additionally, the firm was at one time even bigger than it is at present however the
government entities, anxious about the authority that the corporation amassed,
needed the corporation to call off few of its sub-segments. Moreover, due to the fact
that the company is too big and strong, they have been charged of insolventing few
other organizations, or even worse, building the industry so that rest of the
organizations don't stand a possibility at the beginning. Nevertheless, it is very vital
to make a note of the fact that Samsung is accountable for minimum 1/5 of the
nation’s total exports. Therefore, they are in a state of authority for the reason of the
money they provide to the government bodies. It can be clearly said that their
enormous quantity of human resources are indispensable for the nation’s overall
45
economy.
Samsung has been operating for relatively some moment, and even though there
existed some argument with respect to their potency and authority in South Korea,
there is no doubt that they promote the and benefit the overall economy highly by
means of offering employment, sending abroad their facilities, and otherwise
carrying out things that small size organizations would not to be capable of doing.
Further, Samsung is a motivating force of a corporation, with a lot of individuals
throughout the world making use of their goods, predominantly the electronics like
mobile phones and MP3 players.
Apart from this, Samsung Electronics Company facilitates its customer with a wide
range of consumer electronics goods. The corporation functions by means of two
business categories namely; digital media and communication (DMC) segment and
device solution (DS) segment. Firstly, the DMC segment lays emphasis on the
production of digital media as well as communication goods, like televisions (TVs),
printers, monitors, air conditioners and washers along with mobile phones, network
structures and computers. Whereas, its DS segment offers semiconductors and
liquid crystal display (LCD) goods, encompassing memory chips, hard disc drives,
system large scale integrated circuit (LSI) goods and thin film transistor (TFT) LCD
products. The recent records bring to light the fact that on April 1, 2010, Samsung
accomplished its amalgamation with Samsung Digital Imaging, connected with the
production and sale of digital cameras.
The background of LG
LG, a multinational organization established in the year 1958 at Seoul, South Korea
as GoldStar, acquires the second largest position with respect to electronic products
developers of South Korea and third biggest product creator throughout the world.
LG Group is the amalgamation of two Korean organizations namely; Lucky along
with GoldStar. Moreover, the alphabet L is obtained from Lucky and G from GoldStar
which together forms LG Group. However, all the efforts of the company are directed
46
towards one chief motto i.e. "Life's Good". Previous to the brand name LG
Electronics, Electronic products were traded under the brand name Lucky and in the
same way home assortments were traded under the brand name GoldStar. In the
year 1995 brand name GoldStar was changed to LG Electronics and possessed
Zenith Electronics that operated in USA. Along with providing its customers with
excellent quality goods, LG Electronics also supports sports in a number of fields like
football, racing, cricket etc.
The company produces, fabricates and sells a wide range of products such as
Digital Display, Digital electrical devices, refrigerators, TVs, air conditioners, washing
machines, Digital Media and Mobile Communication goods in worldwide
marketplace. There exist about 75 subordinates of the organization throughout the
globe that plans, produces, advertise as well as sells televisions, distinct electronic
goods, home equipments and telecommunication products. Moreover, LG
Electronics is the possessor of Zenith Electronics and also has a joint project with
Philips Electronics below the tag of LG Display. However, both the organizations are
trying their best for producing and mounting the superiority of their goods. A number
of significant subordinates of LG faction are namely; LG Telecom, LG Electronics,
Zenith Electronics and LG Chem. in over more than 80 nations.
Moving ahead, near the beginning years of 2000 the organization obtained
reputation in fresh marketplaces and brought in extra proceeds. In the year 2005
and 2006 the corporation carried out a noticeable business in the industry of
electronic equipments. Moreover, the company is the biggest plasma producer of the
globe and LG Display is the biggest producer of LCDs (liquid crystal displays). In the
year 2006 the organization laid emphasis on cell phones and came up with LG
Chocolate. The corporation fabricates the plans and operations of its cell phone and
promoted LG Shine as well as LG Prada which turned out to be very flourishing. The
recent records highlight that LG Electronics was chosen as "The Design Team of the
Year" by Red Dot Design Award in the year 2006 and 2007. Further, it is also
referred to as new Sony and new Apple among the society because of its goods and
supervision.
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In addition to this, LG Electronics of USA has come up with a number of handsets
which turned out to be very successful. The organization manufactures a huge
variety of mobile phones and it is anticipated that it will happen to be the fourth
biggest handset manufacturer throughout the world in the coming years. With
passing times, the handsets produced by LG are becoming well-liked in the entire
telecommunication industry because of its superiority and improved features. The
segment of home assortments produces goods like air conditioners, ovens,
refrigerators and washing machines especially for home customers. For instance,
North America is considered to be the prevalent marketplace for home assortments
segment of the organization. Whereas, the display segment of LG Electronics is also
very well-known and produces LCD TVs, Plasma TVs, Monitors, OLED Panels, USB
Memory and Flat Panel Monitors. Further, the organization has come up with a lot of
goods in the area of digital media like DVD Recorders, Home Theatre Systems, CD
RW, Notebook PCs, Desktop PCs, MP3 Players, PDAs etc. Lastly, LG has also
initiated a sequence of air conditioners which are running successfully in the
marketplace of electronics throughout the world.
The background of Videocon
To begin with, Videocon Industries was initiated in the year 1986. The company has
mainly two core actions, including the production, congregation, promotion and
allocation of consumer electronics and home assortments, and investigation and
fabrication of oil along with gas. The corporation at the moment has around seven
functioning business segments, out of which most important segments are consumer
electronics, home assortments, components, etc.
The recent researches bring to light the fact that in India Videocon has more than
eleven production outlets. The production provisions manufacture an entire series of
consumer electronics, home assortments and significant elements like compressors,
etc. Moreover, it is the only producer of glass panels operating in India. The outlet
located at Bharuch is considered to be the biggest throughout the globe at a single
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position and the third biggest on the whole. Videocon is amongst the chief CRT
producers internationally, with production units situated in Poland, Mexico and
China. However, the Poland production unit is involved in manufacturing glass
shells. In addition to this, it puts together air conditioners in Oman and CTV’s in Italy.
The corporation has come into view as one of the prevalent colour picture tube
(CPT) producer throughout the globe subsequent to the acquirement of Thomson's
CPT business, and anticipates this to enhance its overall international sales volume
to EUR 782.36 million in the duration of three years.
Videocon initiated its oil and gas segment not many years ago and at the moment
embraces around a 25 per cent share in the Ravva oil field, situated on the Krishna-
Godavari basin. Moreover, the overall operating cost of the Ravva oil field is
believed to be the lowest at compared to rest of the world, at below than EUR 0.78
per barrel of oil. However, globally, it has high inclination towards oil blocks, located
throughout the globe i.e. one in Oman, two in Australia and one in Timor Sea in
close proximity to Indonesia. Moving ahead, it is an OHSAS 18001 and ISO 14001
qualified corporation and has attained the CE authorization for exports to the EU. In
addition to this, it has also been licensed by the VDE Testing and Certification
Institute and keeps in touch with British standards. Further, it highly perceived by the
organization that it’s stratagem of back-to-back supply chain incorporation with
worldwide extent and less cost base and with access into the worldwide brand area
by means of acquirement course will alter it into a global CE & HA powerhouse with
a sound cash flow mainly from oil as well as gas business. The organization
recorded sales of around EUR 1,031 million during the fiscal year ended 30th
September 2005, whilst its overall sales for the nine months ended 30th June 2006
were accounted to be somewhere about EUR 956.5 million.
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5. Finding and Analysis
5.1Introduction
According to Van Maanen (1979), there exists no inflexible structure or implement
for acting upon investigation, although, the retorts from numerous managerial
associates together with the outlooks of a number of intellectuals if assembled
according to diverse themes productively with the intention to deal with the research
questions can prove to be very successful. After discussing above the selected
cases in detail, the section below starts with the case analysis for addressing the
research questions and analyze the extent to which SCM approach can benefit
organizations.
The discussion starts with illustrating the SCM approaches at Samsung, LG and
Videocon and moves ahead with the SWOT (Strength, Weakness, Opportunity and
Threat) analysis of the Sony Electronics.
5.2Case Analysis
Supply chain management at Samsung
It is highly believed by Samsung that they must run a market- rooted Supply Chain
Management so as to efficiently make out variation taking place in the worldwide
market atmosphere and to easily become accustomed to the alteration needs.
Moreover, in view of this fact the company needed a trustworthy BI solution that
could hold up a huge quantity of data processing, it put forward BI platform, which
comprises of numerous terabytes of facts from ERP as well as GSBN systems. In
the end, Samsung selected Microsoft’s BI Platform in view of the fact that it can put
50
an end to concerns of timely and technological costs experienced and wanted by it
whilst it was going through system execution.
Samsung, highlighting immeasurable enlargement in both semiconductor as well as
mobile phone markets, is a worldwide company with over 90 offices located in about
52 nations throughout the world. Preceding year, it obtained around US 100 billion
dollars in the form of proceeds, placing itself as among the ‘Top 3 organizations
operating in Global Electronics Industry’ and near the beginning of this year, it stood
38th, the leading for a Korean organization according to the Fortune Magazine
declaration of the ‘Top 500 Global Companies for the year 2008.
Till the time it formulated a remarkable business administration index of around US
100 billion dollars in yearly proceeds, Samsung Electronics was beneath stress from
huge logistics costs and apprehensive demand and supply of raw resources and, as
a production organization, it is constantly cognizant with reference to impending
threats and a call for for invariable modernization and upcoming visibility in order to
steer clear of excess-acquisition or fabrication.
In specific, Samsung has had powerfully supported business modernization with a
job surroundings uprising by means of IT and it laid emphasis on improving the
capabilities of its Supply Chain Management (SCM), which is regarded as an
essential aspect for production organizations. Subsequent to attaining outcomes of
mounting competence and reduced costs in overall business by means of developed
SCM, the company attained extraordinary proceeds for the initial quarter of this year.
The corporation also obtained potency from dwindle in stock through Supply Chain
Management, as it was capable to twofold its stock assets movement rate as
compared to that ten years ago, highlighting visual outcomes. Thus, the struggle
among organizations is turning out to be severe and customer expectations are
mounting, contributing significantly to industry ambiguity.
Therefore, Samsung required establishing a discrepancy stratagem in order to
locate itself as the utmost order of electronics organization in the approaching
decade. As a consequence it stepped into a business administration structure with
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circumstances that can boundlessly and instantaneously be acquainted with
symbols of ecological variations and work against appropriately. With the intention to
hold up this new premeditated alteration, Samsung twisted to IT for an elucidation
and put into practice an IT project so as to offer imminent into its Supply Chain
Management. The organization opted for Microsoft’s BI podium as the tool for
apprehending this. Moving ahead, the companies SCM system has by now attained
worldwide top-position but the predicament is that its components, which are all
associated to Samsung are restricted. In the earlier period, the company had an
approach to methodically amalgamate competitors’ data inside SCM or forecast
worldwide marketplace activities or even predict universal demands for their goods
and services.
LG supply chain management
With the intention to perk up the administration of their suppliers as well as the
quality of raw resources, the company namely; LG has been carrying out the LGE
Green Program (LGEGP, LG Electronics Green Program) ever since the year 2005.
As a production organization that obtains components along with raw materials from
their suppliers, they efficiently identify that the quality of the suppliers’ goods is
unswervingly associated with their quality competitiveness, and they uphold Supply
Chain Management (SCM).
LG Electronics Green Program
Firstly, in order to control the employment of harmful materials in the goods, LG
Electronics is carrying out an LGEGP for more than 4,400 suppliers. By means of
this particular course, dangerous material management, import assessment and
keeping an eye on examination of suppliers are being executed. Moreover,
incessant enhancement of component quality, enhancing the raw resources
comprising of dangerous materials, and other proceedings are also being
52
implemented so as to perk up the ecological outcome of their goods. However, LG
Electronics scrutinizes its supply chain by asking its primary suppliers to verify and
encourage their second and third suppliers. Ever since September 2006, the
company has been carrying out the LGEGP scheme to efficiently administer and
supervise all certification procedure. By sustaining and carrying out enhancements
for more expedient and effectual plan operation; they are looking for impending
competent suppliers that can gratify their values.
Certification Process
Secondly, the certification assessment is only carried out at factories of
organizations that have efficiently agreed the LG Electronics' evaluation as well as
the confirmation of the documents associated with dangerous materials. Further, for
the organization that proficiently passed the assessment, a certificate is handed out
and genuine business is commenced with winding up of a components guarantee.
Documents for Suppliers
Thirdly, LG gives out interrelated information like the help guidebook for effective
supervision of harmful materials present in manufactured goods both online as well
as offline, so that its colleague organizations can effortlessly become accustomed
with their functions to the Green agenda. Lastly, this guidebook also encompasses
comprehensive LG Electronics values and principles with respect to harmful material
management.
Supply chain management at Videocon
To begin with, VIDEOCON is among one of India's not many corporation’s to
supervise the whole supply chain, beginning from fabricating glass from sand,
manufacture of guns as well as yokes, and altering them to colour picture tubes for
the purpose of trade in the marketplace. Moving ahead, the acquirement of
Thomson SA located in France has unfastened even broader the course to the
worldwide markets. With the purpose to track down its diversification plan, the
53
company looks forward to lay more emphasis on the global oil segment and step into
premeditated associations so as to enhance the level of efficiency and profitability. In
addition, the acquirement of Thomson SA has immensely augmented their colour
picture tube along with colour picture glass shell abilities and added fresh fabrication
outlets in nations like Poland, China and Mexico and marketplace existence in South
Africa, Italy, Sudan, China, Jordan and Oman.
The company has at present turned out to be among the leading CPT glass as well
as tube producers throughout the globe and a support for a number of TV producers
operating worldwide like Sharp, Vestel, TTE, Konka, etc.
The production bases attained offer an enormous prospect for rest customer
electronic products fabricating at these sites, for instance air-conditioners, TV sets,
and other home assortments. Further, the company now has a ready admittance to
the globe’s leading marketplace i.e. China, by means of two exceptionally large
plants located there.
The SWOT Framework
According to Houben (1999), SWOT technique is fundamentally an epitome that
efficiently highlights the internal as well as the external environmental forces and
facets revolving around the firm. In addition to this, Hill and Westbrook (1998) add to
it by asserting that SWOT paradigm assists in intended planning and offers
assistance to the decision creation progression of an organization. Moving ahead, it
also mirrors each and every Strengths including internal forces that help in achieving
the objectives, Weaknesses encompassing internal forces that could prove to be a
concern throughout the course of the plan, Opportunities comprises of external
forces that contribute towards accomplishment of aims and lastly, Threats including
the external forces that could unconstructively influence the firm in coming years
(Piercy and Giles, 1989). Further, the continuing sections will now present a
54
thorough outline of the four extents of the SWOT paradigm taking into account the
case of Sony Electronics.
Strengths
Firstly, strengths comprises of the internal forces like resources, thoughtfulness,
knack, funds, advertising scope, proficiency, location, rejuvenation factors etc which
aid in accomplishing set objectives and satisfying aims.
Over the period of years, the biggest strength of Sony has been its ability to develop
good quality and innovative products. The web page of Sony clearly mentions that
“Sony innovations have become part of the conventional culture which includes: the
first magnetic tape and tape recorder in 1950, the transistor radio in 1955; the
world’s first all-transistor TV set in 1960, the world’s first color video cassette
recorder in 1971, the Walkman personal stereo in 1979, the Compact Disc (CD) in
1982, the first 8mm camcorder in 1985,the Minidisk (MD) player in 1992, the
PlayStation game system in 1995, Digital Mavica camera in 1997, Digital Versatile
Disc (DVD) player in 1998 and also, the Network Walkman digital music player in
1999”. Additionally, in the year 2006, PC world had published the Top 20 Most
Innovative Products with Sony’s Reader being listed as number six and Sony’s
PlayStation as number sixteen. So far, the Sony Corporation has been highly
competitive and have constantly been improving based upon the learning’s from the
past failures and mistakes. Sony has also stated that it has learnt a lot from its
previous product failures. For instance, the Sony MSX home computer could not
gain a satisfactory level of success and almost failed but it was a big learning
experience for the company as the developers at Sony got an opportunity to
discover the valuable technicalities that can be applied during the process of the
product development. As a result, the engineers became the living resources and
constantly represented the latent power existing within just the Sony and not in any
other AV companies.
55
Further, the ability of Sony to be successful in various market sectors is also one of
its strengths. For example, they have been quite successful especially in the PC
market, video game sector in addition to the television domain.
Weaknesses
A large number of intellectuals have brought to light the fact that the Weaknesses
are simply opposite of Strengths which implies they take in internal facets that
confirm to be obstacles in the course of plan.
As far as the weaknesses are concerned, Sit has been found that lack of innovation
in PS3 is their most recent and biggest weakness. It is truism that Sony emphasized
on digital technology during the development of PS3 with the enhanced ability to
export high-definition video formats. However, this expertise is only compatible with
a high definition TV, so there still exist a major chunk of population who are not able
to take full advantage of the same. Another drawback for Sony is high price of PS3
even after it has been lowered by approx $100 recently. But still, the weakness of
the PS3 is even more influential when the range of video games selections is
considered as the majority of games obtainable are all first-person shooter games,
which are able to facilitate a particular market. However, there are few games that
attract a different sub-sector of the video games lovers. Additionally, the Sony
executives have reported that they are aware of the fact that prices need to be
reduced in order to pull more customers to purchase gadgets.
Opportunities
Through the backing of SWOT analysis, elucidations to plentiful questions related
with prospects such as worldwide influences, market predisposition, quantity,
challenger’s susceptibility and business enhancement could be attained.
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On exploring the external environment of Sony, it has come to notice that Sony
Electronics is open to a wide array of opportunities based upon its strength of
uniqueness. At Sony, design does not just mean looks but it means a fully integrated
and well developed product with user friendly applications, intelligent features,
attractive look and feel and lastly, innovative equipment. In one word, it can be
clearly stated that design is the major key component when comparing mobile based
communications products as well electronic gadgets. The Sony’s latest area of
development and innovation is the Sony’s Reader, which is basically a device that
will enable users to read books while travelling, relaxing etc without the burden of
carrying hard copies. This technique is not just cost effective but eco-friendly as well.
Firstly, the downloaded books are comparatively cheaper and also help save trees
as they are not paper based.
Further, the other opportunity could be an effective piece of graphics software for
mobile phones by Ivan Poupyrey. It might not appear like much, but the capacity to
draw sensible icons and avatars straight on a normal (non-touch screen) phone is
sure to add attraction amongst users of mobile especially through the social-
networking sites.
Though, there has been far too much on exhibit today to cover up in depth here,
there was an apparent stress on what many forecast will be the boom expertise of
the next coming few years especially social networking in all its forms.
Threats
Lastly, the external forces including environmental impacts, shortfall of most
important employees, climatic situations, standpoints of distinct challengers,
intensification of IT, supporting inner capabilities etc that could prove to be
destructive for a firm encompass the threats.
To start with, the most common threat and issues faced by almost all organizations
today is fierce competition in sales. One of the latest innovation of Sony was its
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notebook computers i.e. Sony’s Vaio series.The price of Sony Vaio varied from $850
to $2300 depending upon the features and funcitionalities but Dell proved to be
biggest threat to it. Dell is an established name not just for laptops and notebooks
but also for desktop computers. Dell products look very stylish and are pretty cheap
as compared to others. Moreover, Sony’s other competitors include Microsoft and
Nintendo which have also resulted in decline of Sony’s play station annual sales.
This trend was completely visible in the year 2007, when only 82,000 PS3s were
sold as compared to 3,60,000 Nintendo Wiis.
Moving further to the LCD television domain, Sony has significantly excelled but is
still faced by tough competition from Sharp, Samsung, LG, Panasonic, Videocon etc.
Most of the mentioned brands already exist in the DVD player market where Sony is
still behind. However, it is to be noted that the competition is not the only threat
faced by Sony. Sony very recently had to make a public admission of guilt relating to
the use of a setting in a violent video game, "Resistance: Fall of Man." It had used
the concept of Manchester Cathedral in northwest England in this game, featuring a
bloody gun battle scene between American aliens and soldiers. As a result, Sony
had to formally apologize in-front of public in mid July 2007. However, they directly
refused to pay any donations or withdraw the game.
How PEST can be Useful towards Sony
Primarily, Sony Corporation would bring into play these aspects in order to keep an
eye on the external forces of the
business environment in which it operates. PEST can prove to be very helpful and
constructive in case of Sony Corporation due to the fact that it could be employed to
make out any fresh legislation, trading limitations, VAT, tax regulations, social
vogues,
technical enhancements etc. In addition to this, PEST can also be adopted as a
promotion and marketing means with respect to Sony Company. Sony
promoters would always wish to be acquainted with how sound the business is
58
functioning and this can be done with the help of PEST analysis. Moving ahead, by
employing PEST
analysis Sony dealers can build up latest stratagems to facilitate overall
development and growth of the business. Lastly, Sony Company would be capable
of forecasting what their upcoming business surroundings will be by means of
political, environmental, technological and social (PEST) forces.
How SWOT can be Useful towards Sony
To begin with, Sony Corporation can make use of SWOT scrutiny so as to supervise
its Strengths, Weaknesses,
Opportunities and Threats. Firstly, strengths can prove to be quite constructive
towards Sony due to the actuality that it would
assist the company to recognize elements which facilitate them in attaining their set
goals. Secondly,
weaknesses can be useful in case of Sony Corporation as it would be making
available for them the
information related to factors that can be or are destructive towards attaining aims.
Thirdly, opportunities are considered to be the external forces that can aid the
company in accomplishing its desired goals.
Lastly, threats are the external forces that could obstruct the course of goal
achievement.
Moving ahead, by adopting SWOT examination at Sony Company can prove to be
very useful due to the fact that they would be
informed of both their strengths as well as weaknesses; though the organization
might only
lay emphasis on their strengths and strive hard to progress and develop them. This
is for the reason that businesses
have a propensity to ignore weaknesses associated with their business. Further, the
approach of SWOT analysis can be adopted to
make out Sony’s existing market position along with how far or back it is from its
59
prevailing rivals. Lastly, this would provide the company with the inducement to
operate more towards attaining
their set goals and objectives.
Porters Five Forces Analysis for Sony
Porter’s five forces is an approach proposed by Michael E. Porter to understand
industrial pattern of the organization with regards to the surrounding market
environment and competition in order to attain the long term goals and objectives.
Porter (1980) states that there exist five bases forces that surround all
manufacturing firms i.e. Degree of rivalry, Threat of substitute, Supplier power,
Barriers to entry and lastly, Buyer power of customers. The lines below now aim to
understand the Sony Electronics industry environment by focusing upon each of the
five forces.
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Threat of new entrants
Goods demarcation Economies of scale Funds necessities Changing costs Technology, expertise and
modernization Government guidelines
Rivalry among Existing Competitors
A number of and somewhat uniformly evenhanded competitors.
Small product life succession Elevated R&D costs Shortage of delineation or
changing costs Replication of know-how Reduced profit margins Large exit barriers
Threat of substitute
Products having identical use restrict the prices companies could charge.
Switching cost of purchasers. Relative cost of replacement.
Bargaining power of suppliers
Large worldwide supply chain management and the vendors are not focused.
Vendors are enforced to bring down their prices or else exit from the business
Direct conciliation with vendors with the intention to support consistent supply, quicker distribution and lesser prices.
Bargaining power of buyers
Goods are moderately undifferentiated
Purchasers deal with some switching costs
Online shopping has augmented the bargaining authority of purchasers.
Consumers are price responsive and insist for good quality.
Fig. 4 Sony Porter’s Five Force Analysis (Put your name here, 2010)
6. Conclusion
6.1Key Findings and Recommendations
It can be clearly stated from all discussion above that Supply Chain Management
(SCM) is not just an approach to manage production and transportation of goods
and series but by means of the augmented clarity throughout the supply network and
flexible supply chain system, one can be extra receptive and can feel and react
speedily to alterations and rapidly take advantage of new prospects. SCM involves
several other benefits as well such that it also provides a general information
structure that assists interaction as well as teamwork and makes possible for a
person to better acclimatize to and satisfy consumer wants. Further, it offers a
platform to the organizations so that they can easily track and keep an eye on
acquiescence with respect to factors such as surroundings, wellbeing and security. It
is a well known fact that information lucidity and actual-time business astuteness can
result in comparatively smaller cash-to-cash cycle durations. Moreover, condensed
stock levels and incremented stock turns throughout the chain can help to bring
down total costs.
With the help of Supply Chain Management, one can also reduce operational
expenditure with timely scheduling for obtaining, producing and carrying. Better
arrangement, produce and implementation tracking can result in enhancement in
functioning and superiority and reduced costs. Further, organizations can also perk
up profit margins by means of enhanced harmonization with business
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associates. Lastly, rigid association with trading associates helps to keep supply
chain allied with existing business stratagems and preferences enhances company’s
overall outcome and accomplishment of set objectives. The figure below
summarizes the various benefits of the Supply Chain Management (SCM) approach.
The continuing paragraphs throw light on SCM strategies adopted by Samsung and
LG.
Firstly, it is highly believed by Samsung that they must run a market- rooted Supply
Chain Management so as to efficiently make out variation taking place in the
worldwide market atmosphere and to easily become accustomed to the alteration
needs. Moreover, in view of this fact the company needed a trustworthy BI solution
that could hold up a huge quantity of data processing, it put forward BI platform,
which comprises of numerous terabytes of facts from ERP as well as GSBN
systems. In the end, Samsung selected Microsoft’s BI Platform in view of the fact
that it can put an end to concerns of timely and technological costs experienced and
wanted by it whilst it was going through system execution. With the intention to hold
up this new premeditated alteration, Samsung twisted to IT for an elucidation and
put into practice an IT project so as to offer imminent into its Supply Chain
Management. The organization opted for Microsoft’s BI podium as the tool for
apprehending this.
Secondly, with the intention to perk up the administration of their suppliers as well as
the quality of raw resources, the company namely; LG has been carrying out the
LGE Green Program (LGEGP, LG Electronics Green Program) ever since the year
2005. As a production organization that obtains components along with raw
materials from their suppliers, they efficiently identify that the quality of the suppliers’
goods is unswervingly associated with their quality competitiveness, and they uphold
Supply Chain Management (SCM).
6.2Limitations
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To begin with, every plan and research is typified by several restrictions and thus is
this study too. Firstly, this particular piece of research was extended over an
extremely short span of time i.e. three months. Consequently, just one technique for
gathering facts namely; qualitative interviews could be brought to play together with
the secondary facts. Further, there took place deficiency of quantitative facts and the
statistics representing assessment of the arithmetical facts.
Secondly, the dissertation project was carried out during the winter term. This
restricted access to almost everything. Students were busy with their assignments
and submissions while staff members were either on holiday or too busy with the
academic work. As a result, a large number of interviews could not be conducted.
6.3Future Research Options
This research study which was a mix of secondary and primary research
successfully addressed the research questions and helped explore the benefits of
Supply Chain Management (SCM) and the way companies like Sony, LG, Samsung
and Videocon have leveraged from the same.
As part of the future research, the same kind of study in the retail sector especially
fashion clothing could be both highly interesting and beneficial.
6.4Concluding Remark
Starting with the aim to explore the benefits of Supply Chain Management (SCM),
this dissertation has quite successfully discovered the case Sony along with
Samsung, LG and Videocon. Being a mix of primary and secondary data, the
research got completed well in time within the available resources.
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Appendix 2: Interview Questions
Below is the list of interview questions aiming to explore the answers to specific
research objectives.
1. Does your company believe in Supply Chain Management (SCM) approach?
2. What all techniques are followed to implement the SCM in your organization?
3. Does the process involve people from all departments or just the management?
4. How many levels of process are there?
5. Since how many years the process has been present in your firm?
6. Has there been any changes in the SCM process over the years (since the time it
was implemented and now)?
7. If yes, what are they?
8. Do you agree that Supply Chain Management (SCM) has led to increased efficiency
and effectiveness in your firm?
9. How do you measure such effectiveness and increased level of efficiency?
10.What all market sectors are covered in the process? Is it just procurement and
logistics? Or marketing as well?
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11.Are you planning to go for any other approach as well besides SCM for you firm? Or
is it just the SCM?
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