Sony Aibo Presentation
20
Transcript of Sony Aibo Presentation
American market less responsive in purchasing AIBO when compared to Japanese market
Problems:› The product remains unprofitable for Sony at
current production levels Possible Causes:
› High price tag › American consumer sees robots as “dangerous
or threatening” and see little value in a robotic pet that performs no functional tasks
The Problem Situational Analysis Methodology and Criteria The Alternatives Alternative Selection Implementation
Strengths: › Association of Sony brand name› Sony is market leader AIBO is the first
commercially available robot Weaknesses:
› Not part of Sony’s core competencies “electronic, games, and entertainment”
› Price tag of US$1500-$2500› Sony often fails to meet demand
Opportunities: › Social: Baby boomers in the US market› Technological: The research holds the
potential of being extremely valuable to external high tech companies
› Political: Government agencies have a keen interest in how new technology can improve its operations Turn the robotic pet into a learning tool at
schools or an automated caretaker at aging homes
Threats: › Competitors: Honda's Asimo uses a platform
recognition and network integration technologies similar to the AIBO
› Technological: A high-tech company such as Sony and its competitors are always threatened by a high rate of technological obsolescence
› Economic: By the nature of the product categories in which they compete, Sony and its industry offers many high-end, luxury products
Four criteria were used to compare the alternatives› 1) Short term to medium-term profitability
(30%)› 2) Alliance with Sony’s core competencies
(30%)› 3) Long term growth potential (20%)› 4) Ease of implementation (20%)
Stop Production› Reasons:
Sony AIBO is unprofitable Does not fit with core product strategy American market has a history of
associating robots with enemies
Market Penetration› The Innovator market has not be
saturated› Same product, same price› Same Distribution channels› The promotional strategy would
eschew mass advertising and focus on building ‘word of mouth’ buzz Technology trade fairs
Market Development› Attract the early adaptors and lead
towards a mass marketFunctional AND emotional positioning
› Build primary demand› Market is large and will offer long-
term growth › Short-term profitability because low
R&D
Product Development› Exploit the tech-savvy, innovator
market that it currently targeted› Develop the AIBO to the point of being
less of a continuous innovation and more like a discontinuous one
› Purchase because of the novelty
Diversification› Two diversification strategies
a) diversification towards a highly functional AIBO which performs duties and is targeted towards adults Development of a highly functional product that
answers the question, “But what does it do?” American consumer is pragmatic Low short-term profits Most aligned with Sony’s core competencies of
producing high-tech electronics
b) a primitive-version AIBO that is geared towards children
Dropping both the price and the functionality Mass advertising campaign, Integrated components Element of luck when attempting to create “mass
infatuation”
Short Term to Medium Term
Profitability
Alliance with Sony’s core Competency
Long Term Growth
Potential
Ease of Implementation
Total
Weighting Weighting Weighting Weighting30% 30% 20% 20% 100%
Stop Production 1 0.3 7 2.1 1 0.2 4 0.8 3.4
Penetration 2 0.6 3 0.9 2.5 0.5 7 1.4 3.4Market Development
4.5 1.35 3 0.9 6 1.2 3.5 0.7 4.15
Product Development
2 0.6 6 1.8 4 0.8 3 0.6 3.8
Diversification – Kids
2 0.6 4 1.2 6.5 1.3 1.5 0.3 3.4
Diversification – Adults
1.5 0.45 6 1.8 7 1.4 2 0.4 4.05
Spend around $3M on national advertising campaign
The advertising budget will be split into a 40-60, respectively. › Fifteen percent of the 40% will be spent towards TV
commercial › 10% will be spent on movie ads in high-tech movies › 15% will be put towards advertisements in different
newspapers, magazines, and other publications› The remaining 60% of the budget will be spent on
direct selling through booths in high-traffic, public areas, such as shopping centers and in-store displays/personnel at Sony and The Sharper Image Stores across the country
