Solution
Parul answered on
Mar 14 2021
Executive Summary
This report will give the extensive research and analysis on Sony Corporation. Valuation of Sony is primarily based on multiple growth factors, which drives the revenue and earnings of the company. Moreover, DCF and FCFF valuations are based on some assumptions, which is explicitly mentioned in the report. I would recommend to investors to keep a closer eye on the stock as it is undervalued by the market. Furthermore, the value of the stock is going down because of trouble in the world due to COVID-19 scare, problems with cu
ency, economic crisis all across the world.
Company Overview
Japanese based multinational organization headquartered in Konan, Tokyo, Sony today is one of the most well known organization in the world. Established in 1946 by Masaru Ibuka and Akio Morita, has grown many leaps and bounds in her existence of more than seven decades. Today, Sony has diversified portfolios that involves professional electronics and consumer products. Its product commands a excellent
and name in electronic gizmos, video-gaming, entertainment business and financial services. Sony holds the substantial entertainment business all across the world, mammoth business of video games and its consoles and largest business of publishing video games. Along with this Sony also commands the business in manufacturing electronic products for both professional market segments - B2B as well as consumer products for B2C markets. Sony was categorized as 97th top businesses in Fortune 500 Global Organization magazine.
Parent company is called as Sony Group that holds business units for electronics market, essentially operating in four main components - electronics, music, motion pictures, music and financial services. Proper functioning of all these four business segments makes Sony as a comprehensive company all across the world. Under the um
ella of Sony Group, there is Sony Pictures, Mobile business, Interactive entertainment, Music, Financial Holdings and others. Sony is the market leader for its semiconductor business since 2015 and 5th in the world for television manufacturing after Samsung, LG, TCL and Hisense.
Industry Analysis
In order to perform detailed valuation of a stock it imperative to analyze the industry or industries that organization operates in. One of the best framework to analyze the business with respect to market is by performing a SWOT that captures Strength, Weakness, Opportunities and Threats. This gives insights on the overall outlook of the industry and the growth aspects of the business. First two parameters
ings out the internal aspects of the business and later two provides reflections of industries thereby explaining the external parameters. There are many ways of analyzing a business. Below in this report you will find the SWOT analysis of Sony, a corporation that was once considered as an undisputed leader in electronics domain. By performing this analysis, I am able to identify the critical challenges that can potentially restrict the growth of the company at global level and might even curtail the expansion. Optimizing the performance of products that Sony offers in the market that are updated as per the issues established in the SWOT.
Strengths
Organization’s strength is derived from its strong
and name that is established from its diversified product businesses for more than seven decades long. It was also awarded the title of Asia's most valuable
and in survey of 2011.
Secondly, Sony as a corporation is considered synonymous with technological excellence and leverages rich background of expertise in technology. Organization has always kept itself updated with market creating the very first Trinitron TV, VCR and Walkman, discs of Blu-Ray and now still evolving their product lines with ultra-high definition of video playback.
Thirdly, one of the greatest and most recent blockbusters success of the organization was with its product PlayStation. It was indeed, one of the remarkable success story and still attracts to a strong clientele which has become loyal to the
and.
Fourth strong aspect of strength is in the domain of entertainment with the business unit of Pictures and Music. It has proved to be a cash-cows that generate huge revenues and aids in offsetting the losses in customer product business units.
Other strong areas of Sony is its focus on innovation and design thinking for producing new products as well as categorizing the business units. Sony as an organization is known for great after sale services that marks high customer satisfaction and perceptions.
Weakness
There is excruciating high investment of capital in media business and television productions. It has affected the pricing of the products from the company. Furthermore, business of television has drained huge capital for initial 8 years amounting to $6.3 billion.
Second major weakness is extremely high on pricing which prohibits many consumers who wants to buy the products but limit themselves due to price. Perhaps, consumers can find many options available in the market in much lesser prices thereby shifting their focus on Sony. This has also resulted in decline in market share of the Sony corporations
With lot of diversified product business units focus has...