2. Index
1.Introduction to facts
2.Risk Matrix
3.RWW
4.What we would have done differently
5.What Sony has learned
6.Q&A
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3. Uma tic Lau nched
by Sony
1971
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4. Umatic
- The first closed-case video format
- Standards agreement between Sony,
Matsushitha, JVC and five non-Japanese
manufacturers
- Used by News Corporations, Schools, and
Businesses
- Too pricey to enter homes
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5. Betamax
Launche
d
by Sony
1974
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6. Betamax
- The first home video recorder/player
- Initial success of 30.000 units in first
year (U.S.A)
- Tape playtime of 1 hour
- Strong focus on recording and quality
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7. V HS Lau nched
by JVC
1976
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8. VHS
- 2 hours of recording
- Strong focus on playback and content
- Lower quality than Betamax
- Initially priced same, though later
dropped a bit
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9. Four Jap anese
produce rs join ed VHS
January 1977
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10. Betamax is j
oined
by Sanyo, To
shiba
and Zenith
February 1977
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11. adio Co rporat ion of
R
Amer ica join s VHS
March 1977
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12. Law suit fi led by
ivers al and Disney
Un
to Son y (Bet amax)
1979
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13. Market share
5%
25%
70%
1981
VHS Betamax Other
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14. Sta rt of
price -war
1982
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15. To tal manuf acturing
ies produ cing video
compan
recorders /players
23%
1982
77%
VHS Betamax
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25. New to company
Risk Matrix
35
45-60% 60-75% 75-95%
30
product technology
Adjacent to current
25
40-50%
20
15
25-40%
Same as current
10
10 15 20 25 30
Same as current Adjacent to current New to company
intended market
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26. R WW A n alysis
Is it Real? Can we Win? Is it Worth doing?
E S
Is the market real? Can the product be Will the product be profitable
competitive? at an acceptable risk?
Is the product real?
Can our company be Does launching the product
competitive? make strategic sense?
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27. I ndustry A nalysis:
’s 5 Forces
This gives an average of 34,6
Porter which makes the buyers power
relatively great, with industry
standard being above 23.5.
Suppliers power Especially with 6 sigma in
place and JIT rising.
H Substitutes available Correlation is key
L Differentiation of inputs
H Bargaining leverage
L Buyer volume
Barriers to entry Rivalry Buyers power
L Brand identity
M Proprietary learning curve
M Economies of scale
H Distribution & retail
H Product differentiation H Switching costs
H Expected retaliation M Trade offs
Thread of substitutes
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29. Mi stakes
No focus on consumer demands
•No Content
•Quality vs tape length trade off
Positioning of Betamax in home recording
•Sony did not see value of rental videos
•Not partnering with the right 3rd parties
(RCA, Blockbusters, Movie studios)
Missed early warning bells
•RCA request
•JVC sales
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30. Sol utions ‘Whole Product Experience’
by Theodore Levitt
Partners
Content Customer
value
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31. Sol utions Product Value Matrix
Customer Betamax VHS
5
4
3
2
1
0
Video Quality Tape Length Availability of movies Cost
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32. Reco mmend ation
Listen to ‘customers’
“We don’t believe in market research for a new
product unknown to the public . . . so we never do
any. We are the experts’’
Morita ‘CEO Sony 1946 - 1994’
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33. Le ssons learned
VS.
Listen to ‘customers’
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