Sony_Corporation

Sony Corporation is a multinational conglomerate corporation headquartered in Japan, Tokyo, Minato and one of the world's largest media conglomerates with revenue exceeding US$99.1 billion (as of 2008). Blue Ray is Sony latest conglomerate. Blue Ray is the next generation of the optical disc, which offers an increase in storage capacity than the tradition DVDs. This new format uses a blue-violet laser instead of the red laser on the tradition DVD. I will try to explain what will happen to the supply, demand and price of the product in the short-term and long-term. In my research I found that the market for blue ray demand was expected to exceed supply. The demand from last year was expected to reach 43 million discs, but production only had the capacity to produce 60 to 70 percent. When the supply equal and/or exceed the demand then prices will go down. When Sony entry in to the blue ray market the price was high and it caused the demand curve to shift to the left. When Sony started to make a profit that is when the demand started to increase. In the short-term, Sony is making a positive economic profit by lowering the price on the purchase of a blue ray player. By lowering the blue ray disc player, it caused the demand for blue ray disc to increase. Consumer are in a mind set right now because of the recession that we are in that they are not buying expensive items such as the blue ray disc player. So, the equilibrium price will not be affected because in the short-term even though price is lower the demand will decrease or it will stay constant if consumers continue to watch their spending. In the long run, the consumers are expected to benefit from not having to choose which brand to purchase. Sony has become the leader in the market, but as new brands come available it causes an increase in the supply and demand. A new brand also causes these products into a monopolistically competitive market to earn a profit. This exists because there are only a few companies producing blue ray disc right now. Lets talk about Microsoft, who is a rival of Sony’s Playstation3 with their Xbox 360. When comparing the two game system they both are somewhat the same but different in price. By keeping the Playstation3 price high kills Sony, and gives Microsoft a huge competitive advantage. In my view, every Xbox 360 sold is a lost opportunity for Sony to sell a Playstation3, and Microsoft has no intention of taking a time off. By lowering the price it will cost Sony a lot, but it should create ample future profits from game and Blue-ray movie sales and royalties to offset those losses. Microsoft is already the monopoly company in PC and now they are trying to become the same in the blue ray technologies. Microsoft Corporation is a multinational computer technology corporation that develops, manufactures, licenses, and supports a wide range of software products. Both Sony and Microsoft will use the following factors of production: Natural Resources, Labor Resources, Capital Resources and Entrepreneurs. • Natural Resources are raw materials that are used t make the products. For example, this includes land, water, forests, minerals, soil and climate. Where a company decides to produce their products would be beneficially. The cheaper they can get the land, water, forests, minerals, soil and climate the better off they are going to a third world to produce, even if its China. Going green is another way to save and cut cost by recycling waste. By going to a third world country it will give a company the edge of producing their product and much cheaper. • Labor Resources are workers that are needed with the appropriate knowledge, skills and experience to make goods or services. Every company has to have skill and unskilled workers to do the job that is required. The competitive advantage will be if you go to a third world country and use the people there to produce your product for a cheaper labor. • Capital Resources are the machines, factories and supplies that are needed. Companies have to have the money to purchase machines, factories and supplies to produce the product that is being manufacture. Having the money resources will continue to give the competitive advantage to produce a product. • Entrepreneurs are these people who bring natural resources, labor resources and capital resources together to produce goods and services. Some do not want to classify this as a factor of production because this is consider as a risk taker. The competitive advantage to this is how deep are the pockets of the person or persons that are back it. With the economy in the shape that it is in the industry are experiencing global challenges such as a slow down in our financial market, plants closing and outsourcing to save money. Companies are adopting the go green challenge. Everyone is looking at ways to cut cost so that they can stay competitive. In conclusion, Sony will have to keep prices lower and/or the same in the coming year especially with Microsoft closing the gap on the blue ray system. Sony will have to look at ways of cutting cost to produce the blue ray products. The future is bright for Blue ray but consumer are more caution of purchasing big-ticket items with all the job losses. Sony has developed a potentially good gaming platform in the Playstation3, BUT it has made far too many strategic mistakes, far too many, that have likely enabled Microsoft to benefit hugely, especially since the problems continued well into 2007, namely the lack of supply, the lack of Playstation3 games, and relative price, meant that XBOX benefit from Sony's mishap in 2007. We will have to see whether the Blue Ray DVD Player technology takes off, and what level of supplies will hit the market. Sony will always have to look at these same factors of production in order to stay in business. But, it will be a struggle between Sony Playstation3 and Microsoft Xbox and the Nintendo Way Wii.