TEAM 11: TGIF
Why “TGIF” was chosen?
T.G.I.F the most common meaning is “Thanks God it's Friday”.
MGT5516 Managing Innovation and Technology Globally course is held on Friday
which is the first initiate idea for our group name. And we find our Professor
Frank’s name is also fit to this group name “Thanks God it's Frank”.
Why “Inside apple is a Kiwi” logo was chosen?
“Innovation” is a new or significantly improved product/
process/ business practices which create new value. And Innovation is
synonymous with risk-taking and organizations that create
revolutionary products or technologies take on the greatest risk because
they create new markets. [Innovation definition]
"Inside apple is a kiwi" gives us a strong
impression of innovation, that unexpected new ideas always surprise and change
the world. It's neither an apple nor a kiwi. And you don't know what it is
until your first bite, same as innovation. It is really a risk-taking product
as it creates a new markets, e.g. Molecular gastronomy (分子料理).
Group Member Self-Introduction:
Iris Leung (Student ID: 53897559)
I am Iris and a part time student and planning to acquire my
Master degree within 2.5 years (if no financial issue lol). I have over
10years working experience in Merchandising and Operation planning area.
Having a mature and professional attitude towards working conditions.
Experience of working with people from a variety background. I am a
talkative and approachable person and happy to share any "insane /
crazy" things to everyone. Coz "life is too short, just enjoy
it"
Joyce Fan Hiu Ying (Student ID: 53511796)
I am Joyce Fan, a year 2 part time student of Master degree
MAGBM.
I graduated from Economics and Finance degree and works in
the Banking industry since my graduation. I worked as a Wealth
Management Manager and FX (Foreign Exchange) Specialist in HSBC and Standard
Chartered Bank earlier years and I enjoy learning and working in different
positions within the industry. I am a happy and open-minded person who enjoys
swimming and yoga recently. Simple, happy and content- that's my philosophy.
As a business student, Technology is a new, fun area for me and I am eager to
learn more about technology innovation.
Toni Ye Donyan (Student ID: 53805830)
I am Toni, one of the full time students of MAGBM 2014/2015.
After acquiring my English bachelor degree in Guangdong University of
Technology in mainland China in 2010, I joined a multinational company, Avery
Dennison, a global leading manufacturer of packaging and labeling in Guangzhou
as a management trainee. I spend 4 years in this company, working as a senior
officer and project leader in customer service dept. I am an
easy-going and out-going person. I love playing basketball outside with
friends, and also enjoy cooking at home.
Vicky Chan (Student ID: 50658033)
Vicky Chan (Student ID: 50658033)
I am Vicky, a year 1 part time student of MAGBM. I graduated
from BBA of Managerial Statistic in City University of Hong Kong. I have been
working as a Credit Analyst in Citibank and an Analyst in Hong Kong Disneyland.
Currently, I am working in FedEx as a Marketing Analyst. I like playing
badminton, hiking and doing yoga. I also enjoy reading different kinds of
books.
"What's Most Surprising About Sony Killing the MiniDisc
Walkman Is That They Were Still Making Them" [Kat Hannaford - Aug 07, 2011]
Executive Summary
We are going to share with you the failure story of Sony
Mini Disc. From this study, you could find the music industry environment as
well as the portable audio player industry analysis at the beginning.
Structuring by porter 5-force model, you can figure out the failure reasons of
Sony mini disc. The recommendation to Sony and our learning from this failure
story will come at the end.
Industry Analysis
Company Background:
Sony Corporation is a global leading company founded in 7
May 1946, headquartered in Tokyo, Japan. It primarily focuses
on producing electronics products (e.g. LCD TV, Digital Camera, refrigerators,
Blu-ray Disc players and recorders), game etc. It has diversified its business
into other sectors, like financial services and medical-related equipment
in later years. It employs around 140,900 employees as at March 31,
2014 and earned a consolidated sales and operating revenue of 7,767,300 million
yen in 2013.
Music Industry Environment:
As we can see from figure 1, the Music industry structure
before 21st century, CD/Cassettes are the created as the media
of music retailer, one of the music distributions. At that time, music is a
“liquid” product and CD/Cassettes is the unique container of this “liquid”
product. Consumers were buying CD/Cassettes and corresponding player (CD
player, Cassettes player, Walkman, Minidisc) to enjoy storable music.
Starting from the end of 1990s’, Internet broke through the music industry structure. Figure 2 is showing the fact that, with the emergence of Internet, its ubiquity and immediacy provided a huge, frictionless environment to the music sellers and buyers. E-retailer such as BuyMusic.com, and Amazon.com change the traditional CD and music player selling model.
[Information retrieved Sony Corporation's Official website]
Then coming to the 2nd decade of 21st century,
Internet have taken the role of retailer and e-retailer, which CD/Cassettes was
declining and eventually fade out as an inevitable consequent, together with
its hardware player. A brand new music industry structure is under established
now and Internet is the key engine.
Figure
2: Music industry structure in the first decade of 21st century
Figure 3: Music industry structure starting from second
decade of 21st century
Portable audio player industry trend
A portable audio player is a personal mobile
device that allows the user to listen to recorded audio while
mobile. [Portable audio Player Wikipedia]
By the time of Mini Disc was introduced to the market
(1992), the portable audio player industry was in the nearly mature point of
its life cycle. The Cassettes player, CD player, CD Walkman were widely used in
almost every family in developed countries. Positioning as the replacement of
Cassettes player and Cassettes Walkman, Mini Disc aimed to earn higher market
share in the force competition within the hardware music player industry.
However, starting from 1998, MP3 player was introduced to
the market. This changed the hardware music player industry dramatically and
pushing the industry to reach the top of maturity in its life cycle. The MP3
player is smaller and lighter in physical size and weight compare existing
substitutes. Besides, MP3 have greater storage capabilities and more functions
in operation when comparing to MD and CD player. What’s more, the much
affordable price and accessibility to computer (to get the music uploaded and
downloaded to the device) catch numerous users, who do not use hardware music
player ever or those use MD and CD Walkman before.
The market share of Mini Disc was bitten by MP3 intensively
day by day, especially the products shared the same feature – portable. The
un-portability feature secured traditional CD player a little bit in this
battle.
From Physical to Digital
With the arrival of information age, music industry is going
through rapid change, as well as the portable audio player industry. Music used
to distribute through physical media (CD / Cassettes) and now through digital
media (all kind of on-line shareable file). The
MP3 player has sped the decline of physical media such as store-bought records
and CDs. Consumers purchased their music in digital format so they can store
and listen to them on their computers and MP3 players anytime at anywhere. As
a result, the size of portable audio player industry have been shrinking,
especially the hardware player of store-able music product, e.g. Cassettes
player, CD player, CD Walkman and Mini Disc.
From divergence to convergence
With electronic components becoming smaller
each year, there is a potential to combine two or more devices into one
full-featured device, cellphone and smartphone are the great representations.
Given by this trend, the declining and shrinking of the portable audio player
industry was accelerating day after day.
Product Background:
1st MiniDisc Player
Mini Disc is a new recording format developed as a
high-quality voice recording that introduced at the beginning of the digital
era by Sony Corporation in 1992.
Except the Japanese market, the product was considered as an
innovation failure and was officially discontinued in Sep2011.
[Sony Corporation's official website]
Cassettes, CDs & MD
MD, as a higher-quality voice recording compare to
cassettes, its portable size and recordable functionality makes it a superior
product over CDs. MD is protected by a
cartridge which made it more resilient and a longer life than CDs.
Regarding the functionality, MD can be record unlimited
times (re-writeable) and users can access a particular song easily without time
delay.
CD is a successful existing product in the market but due to
its size and highly sensitive to vibrations as a portable device, it is not a
perfect portable device for consumers.
A MiniDisc advert from the UK in
1997
Reef Ad for Sony Mini Disc
Sony MiniDisc sales plan and result:
Target Market
|
Sales Target
|
Actual Sales
|
Young music enthusiasts, specifically:
· Generation X (especially the so-called MTV Generation)
and Generation Y
· Men and women between 22 and 32 years old
|
After 1 year:
500,000
(Worldwide)
In 5 years:
25–30 million (Worldwide)
|
After
1 year: 50,000 in US; 100,000 in Europe
In 5 years: 550,000 in US;
1.2 million in Europe
|
Porter five force analysis
Industry Rivalry - High
Rivalry - Internal
In second half of ‘90s, MP3 file began to spread on the
internet and Diamond Rio MP3 player was introduced in 1998 [MiniDisc
Wikipedia]. Sony first refuel to support MP3 format -- Rich Armstrong,
marketing manager for MiniDisc at Sony said "Right now, downloading music
from the Internet takes time and a lot of effort compared to MiniDisc. Moving
forward, this may not be the case." [Peter Brown - May 03, 1999]
Until 2004, Sony started to support MP3 file by using Sony’s own software –
SonicStage [Sony - Mar 02, 2005]. A copy right protection program --
‘OpenMGJukebox’ was included in the early versions of this software. This
program only allow user to send the file to MiniDisc 3 times. This made
MiniDisc unpopular, as most people can copy the music directly from CD and
avoid the copy right issue. And the software was difficult to use compare to
the drag-and-drop copying of portable MP3 players [Richard Baguley - Sep
27, 2013]. Due to the delay of MP3 supporting technology and clumsy software,
Sony lost the MiniDisc market position.
Product Rivalry
Cassette Walkman has a long history among most of
the industrialized countries. Although the sound quality may be
important to the consumer, cassette probably holds a cultural and nostalgic
meaning to American. Sony’s difficulties in selling in MD Walkman at
US are probably a result of its own incredible success with the Cassette
Walkman.
[Brandon Seong-Shin Hong - Mar 8, 2000]
Rivalry - External
Other new technology competition arouse such as DDC (Digital
Compact Cassette), CD-R, CD-RW, MP3 player and DVD Audio all confused American
consumers. In Oct 2001, Apple Inc. launched its first iPod which
meanwhile recordable CDs were becoming commonplace for those who wanted to make
their own mixtapex. In 2001, both MiniDisc and Cassette sales dropped by
70%. Sony discontinued MiniDisc Walkmans in 2001 and the last stereo systems
ship in March. With the rise of the iPod in the last 8 years while the growth
of smartphones in the last 4 years; Sony sees no reason to invest resources
into the niche market. It is believed to be an appropriate move for the
company which is currently involved in stiff competitions in different product
segments.
In 1992, while Sony released the Sony MiniDisc, a system
with recordable and 'mini-discs' that could contain around 80 minutes of audio,
there are numerous other companies start producing MD players, recorders, and
blank discs. These companies include Sharp, JVC, Kenwood, Pioneer,
Denon, Panasonic, Teac, Alpine and Clarion. Sony responded that MD has
an advantage of combined reproduction quality of a CD with the ease of
recording of the audio cassette. However, the price offered by Sony is
highest amongst its competitors.
Sony attempted to license MD technology
to other manufacturers, e.g. JVC, Sharp, Pioneer, Panasonic,
aiming to create a new market. However, non-Sony machines were not widely
available in North America, and companies such as Technics and Radio
Shack tended to promote DCC instead. [MiniDisc Wikipedia]
Competitors Analysis
Brand
|
Country of Origin
|
# of Employees
|
Main Product
|
1st MD launch year
|
MD Walkman Price range
|
Sony
|
Japan
|
140,900
|
Consumer
electronics, Semiconductors, Video games, Media/Entertainment, Computer
handware, Telecom equipment
|
1992
|
·
US market: USD180 - 550
·
JP market: 18,000 - 48,000yen
|
JVC Kenwood
|
Japan
|
19,791
*2008 merge with Kenwood
|
Audio, Visual, Computer-related
electronics and software, media products
|
1998
|
·
US market: USD209 - 330
·
JP market: 20,000 -38,000yen
|
Sharp
|
Japan
|
50,253
|
TV, Audiovisual, Home appliances, information
equipment’s,
|
1993
|
·
US market: USD250 - 338
·
JP market: 22,000 – 49,000yen
|
Panasonic
|
Japan
|
271,789
|
TV, Professional Display, Projector, Digital
Camera, Audio, Home appliances, Personal & health care, Personal computer
& office product, Video games
|
2001
|
·
US market: USD160 – 200
·
JP market: 31,000 – 39,800yen
|
Pioneer
|
Japan
|
22,193
|
Car audio and automotive navigation systems, TV,
PC Dvd drives, DVD players, DVD recorders
|
1996
|
·
US market: USD159
|
[Sony Wikipedia] [JVC Wikipedia] [Sharp Corporation Wikipedia] [Panasonic Wikipedia] [Pioneer Corporation Wikipedia]
Steve Jobs announced the iPod in 2001
Steve Jobs said “There are large companies like Sony, that haven’t had
a hit yet. They haven’t found the recipe for digital music. We think that not
only have we found the recipe, but that people will trust the Apple brand”
New Entrants - Low
For the portable audio industry, it is believed that there
is high degree of barrier to entry.
Technology and costs of entry are both important factors
that pull down the threat of new entrants. In the portable audio
industry, product innovation, development and production involves a
complex set of technological skills.
In other words, there are obstacles which make it difficult for potential new entrant to enter into the market. This protects Sony Corporation as well as other incumbent firms from facing competition in the market. For example, a new entrant may faces patents of certain electronic parts as well as production technology.
Sony Corporation and the few incumbents of the industry is large, established firm which was enjoying a relatively low cost per unit of Minidisc from the benefits of economies of scale.
For potential new entrant, the capital requirements to enter
can be very relatively high compare to other industries. This may prevent
some of the potential entry.
In addition, even if a new entrant entered into the market
successfully as a follower which replicate the product
design, incumbent are likely to exert its market power to deter or force
it out of the market. Incumbent can do so through pricing strategy, setting a
very low price until the new entrant cannot afford to compete in the market.
Thus, the threat of new entrants is rather low for the
portable audio industry comparatively.
Supplier Power - High
Copyright issue
Record Industry Association of America (RIAA) has
considerable influence on copyright policies.
From past experience on Digital Audio Tape (Sony’ DAT
manufacturers were required by law to input a special circuit called Serial
Copy Management System (SCMS) to prevent DAT-DAT copying and increased
overall manufacturing cost), when Sony introduced MD in
1992, Sony created an incompatibility within different MD discs. MD to MD
recording was inhibited and MD-Audio only compatible within MD-Audio player,
Sony lost its chance to create a sustainable multi-format disc and the price of
the equipment was more expensive.
Lack of Record Company support
Record company usually issue pre-recorded music in the
format which is widely accepted by consumer. CD sales continue to dominate the
album sales. Supplier like Time Warner, it publicly wavering in its support and
releasing only 500 pre-recorded MD titles by 1999. This amount was paltry
compared to the thousands of CD labels already available in the market.
[Brandon Seong-Shin Hong - Mar 8, 2000] The lack of availability of
pre-recorded content also caused end consumers to replace their existing
audio-cassette and CD players to MD players. “No Software means no hardware
sales, regardless of the price or capabilities of the hardware” [Church and
Gandal, 1992, page 85].
Buyer Power - Low in Japan, High in
American
Price sensitivity
The sales performance of Sony MD player was an incredible
success in Japan.
In 1997, sales of MD players exceeded that of CD
players. In 1998, it was estimated that MD sales accounted for more
than 60 percent of total hi-fi sales. By 2008, around 25% of
Japanese had an MD system and highly penetrated to Japan Market. Japan is a
very active early adaptor market for the product. Consumer has higher
level acceptance of electronic items and willing to spend money on
gadgets. Also, Japan has been suffered by high CD price in late
1980s. The CD price at Japan was about 3000yen ($30) while US market
priced at $15. It was a problem of Japanese distribution is not as
efficient as those in the price-driven US market and as a result CD prices in
Japan are higher than in US.
Sony Electronics research found that by 1998 "almost
75% of American adults were not aware of the MD format. US consumers
were frightened by higher price point of Sony MD player and it was one of the
key factors of the product failure in US market. The first
generation MD players were priced at USD549 and MD recorders were priced at
USD750. US consumer market is not an active early adopter market
whilst they look carefully at the price tag. Also, US consumers do
not found any significant advantage from Sony MD player so it has decrease
their incentive of purchasing power.
Substitutes Available
American didn’t see significant Technology
enhancement from MD, so it was not worthwhile to attempt the MD player with 3
times higher cost than CD player. Also, Cassette Walkman was still very
popular and widely usage for most industrialized countries. The
competition is only containing CD & Cassettes whereas the MD player market
penetration in US was very minimal. Sony Electronics research found that
by 1998 almost 75% of American adults were not aware of the MD format.
Sales performance
comparison in US
|
CDs
|
Cassettes
|
1991
|
360
millions
|
333 millions
|
1992
|
46.7%
|
50.8%
|
1997
|
78%
|
20.7%
|
Threat of substitutes - Low in early stage, High in late stage
Before 2000s, there was no other substitute which can
directly replace the portable audio player.
In early 2000s, Mobile phone included portable music player
which was easy to use and consumers were not required bringing MiniDiscs and a
MiniDisc player. When mobile phone was more and more popular, and the invention
of smartphone, portable audio player industry was totally shrink and Sony also
killed the MD production.
Recommendation & learning
After going through above analysis, we could summary below
recommendations and learning:
1.
Sony should "Focus on quick
feedback instead of first-pass success"[Week 5 Reading: Six Myths of
Product Development]. Incorrect US market strategy contributed a lot
to Sony mini disc failure. If Sony had done a detail and depth analysis in
culture difference and market difference between US & Japan, including
supplier power and consumer buying habit, mini disc could better survived in
US. And Sony also can do economic analysis; obtain expert opinion and
using S-Shaped curve to have a better understanding on US market. [Week 3
Reading: Forecasting New Technology Adoptions]
2.
Mini Disc was positioned as the
replacement of cassette Walkman. However, lots of consumer mistakenly
interpreted it as the CD player replacement. Sony should sharpen the market positioning
of mini disc and its product differentiation at the launch stage.
3.
If Sony could put more effort on
supplier cooperation on pre-recorded MD production and promotion, mini disc
would have a wider and longer life cycle.
4.
As the digital tide is irreversible,
MP3 and smartphone were widely sped all over the world. Mini disc was falling
into disuse at the beginning of the digital era. Sony should review market
situation at different stages. Also to make a wise decision to get rid of this
product and move earlier to put more resource in digital products. Sony should
not just stick to its original plan and ignore the rapidly changing
environment. "The plan should be treated as an initial hypothesis that is
constantly revised as the evidence unfolds, economic assumptions change, and
the opportunity is reassessed." [Week 5 Reading: Six Myths of Product
Development]
Reference
Articles from class readings:
Week 3 Reading: Forecasting New Technology Adoptions
In-text reference: [Week 3 Reading: Forecasting New
Technology Adoptions]
Week 5 Reading: Six Myths of Product Development
In-text reference: [Week 5 Reading: Six Myths of
Product Development]
Journal
“Network Effects, Software Provision and Standardization”,
The Journal of Industrial Economics, 40 (1), 85
Author: Church, Jeffrey and Neil Gandal
In-text reference: [Church and Gandal, 1992, page 85]
Website:
Innovation
From businessdictionary: http://www.businessdictionary.com/definition/innovation.html#ixzz3TfjC2Lvr
In-text reference: [Innovation definition]
MiniDisc
From Wikipedia website: http://en.wikipedia.org/wiki/MiniDisc
In-text reference: [MiniDisc Wikipedia]
Company info.
From Wikipedia website: http://en.wikipedia.org/wiki/Sony
In-text reference: [Sony Wikipedia]
From Wikipedia website: http://en.wikipedia.org/wiki/JVC
In-text reference: [JVC Wikipedia]
From Wikipedia website: http://en.wikipedia.org/wiki/Sharp_Corporation
In-text reference: [Sharp Corporation Wikipedia]
From Wikipedia website: http://en.wikipedia.org/wiki/Panasonic
In-text reference: [Panasonic Wikipedia]
From Wikipedia website: http://en.wikipedia.org/wiki/Pioneer_Corporation
In-text reference: [Pioneer Corporation Wikipedia]
Portable audio Player
From Wikipedia website: http://en.wikipedia.org/wiki/Portable_audio_player
In-text reference: [Portable audio Player Wikipedia]
Sony Expands Hi-MD Format by Adopting Direct MP3 Playback
and Picture Capturing Capability (Mar 02, 2005)
From Sony website: http://www.sony.net/SonyInfo/News/Press/200503/05-013E/
In-text reference: [Sony - Mar 02, 2005]
The Gadget We Miss: The Sony MiniDisc (Sep 27, 2013)
From Medium website: https://medium.com/people-gadgets/the-gadget-we-miss-the-sony-minidisc-a8b1379b2f1
In-text reference: [Richard Baguley - Sep 27,
2013]
The Trouble With MiniDisc Players (May 03, 1999)
From embedded website: http://www.embedded.com/print/4353079
In-text reference: [Peter Brown - May 03, 1999]
CD sales continue to rise (Aug 07,
2001)
From BBC website: http://news.bbc.co.uk/2/hi/entertainment/1478158.stm
In-text reference: [CD sales continue to rise - Aug 07, 2001]
The Sony MiniDisc (Mar 8, 2000)
From minidisc org website: http://www.minidisc.org/econ113-paper.htm
In-text reference: [Brandon Seong-Shin Hong - Mar 8,
2000]
What's Most Surprising About Sony Killing the MiniDisc
Walkman Is That They Were Still Making Them (Aug 07, 2011)
From gizmodo website: http://gizmodo.com/5819314/whats-most-surprising-about-sony-killing-the-minidisc-walkman-is-that-they-were-still-making-them
In-text reference: [Kat Hannaford - Aug 07,
2011]
1.
ReplyDeletewhen I was in primary school，I saved 2 months’ lunch money for a MiniDisk Player —— MZ-N10 for a very simple reason，I love its awesome industry design. Love is blind, isn’t it? If I have seen this blog article at time, I might choose to buy an Mp3 Player or eat lunch together with my little buddies~ ^_^
2.
MD Player using ATRAC audio format, better sound quality than mp3 format, but it is also compressed audio, which is why the MiniDisk is considered as the replacement of the Cassette instead of CD (Little supplement for your point 2 in the Recommendation & learning).
3.
Sony designed complex ways to prevent customers using the piracy audio. MD player, as a product of the digital era, it failed to meet the modern demands of “simple and user friendly”.
4.
In the video Jobs announced the iPod, he trust iPod will be the song library with thousands music in the pocket. I really admire Mr. Jobs’ design concept and his highly infectious speech.
“Song library in the pocket” brings the success of iPod, and “The Internet in the pocket” brings the success of iPhone. Let us pay tribute to Steve Jobs.
I really appreciate Team 11 put what we learnt in class and readings into their analysise. It is very nice of them to combine theories with realistic contradiction so well. I should learn their atitude first.
ReplyDeleteI also learnt a lot from their articl. First, for a multinational company, it should be very careful to adopt market strategy in different countries with different market situations. In Sony's case, one of its failure reasons is that incorrect US market strategy contributed a lot to Sony mini disc failure. Different culture background, customer's thinking and behavior between US and Japan. It dosen't mean the product itself is not good enough, but Sony did not well in market rearch and markt strategy in different countries.
Second, appropriate market positioning and brand positioning is citial no matter in which country. The main function of brand positioning is that tell customer what you are, give customers an exact image. In real life, many brands fails due to they did not hold a exact brand positioning and image which cause to end customers do not know what they are and what is the difference between this brand to other similar brand. In this story, Sony also made the same mistake in its minidisc walkman product which put this product into an embarrassing situation.
Third, use Google's philosophy--"Great is not good enough"(I learnt from Team 14's case) Mini disc was falling into disuse at the beginning of the digital era. In a dynamic high-tec industry, no company can be lax in such a rapidly changing market. If one relax, that would be disaster.Judge whether a kind of product is good enough is the market feedback not the product itself. Maybe Sony's mini disc device is great, but when the market profile has changed, market did not give this product good feedback that is reached the time for a company to change. So managements should always keep this philosophy--"Great is not good enough" in their minds.
Forths,early is the best. In businss world, there is no evergreen.The world the market change rapidly. The succss ones are always those who got the market opportunities earlier. It is a pity that Sony did not response to the market change rapidly, the weed out of its mini disic walkman is an irreversible trend.
At last but not least, thank you team 11, I really learnt a lot from both your article and your attidute. Thank you for sharing.
It is undeniable that MD walkman was an attractive product as an handy music companion. I also bought a mini disc walkman when I started to be addicted in pop music. In the era of lacking entertainment, walkman is a popular way of recreation. However, this product was not used often and quickly laid aside, as it was not handy enough. Since the MP3 appeared, walkman is destined to get off the stage. These devices seem to be out of place with increasing use of smart phones and tablets.
ReplyDeleteA device meeting a variety of needs is the trend of technology. The advantage of walkman is offering high quality music but now less people care about. Convenience is much more important than the music quality. Mobile phone is widely used in our daily life, because the multiple functions can meet multiple demand.
Thanks for sharing, TGIF!
ReplyDeleteTechnology has been evolving so quickly in the past two decades. I can still remember my first music player was a CD player, then an MD player, next a MP3 player, followed by iPod, iPhones... It's funny that I bought a mini-disc before getting a player, because of the attractive and beautiful graphic design on the disc.
In my opinion, piracy is another main reason leading to the deterioration of MD. When MD was first introduced to the market, another industry also emerged - there were CD retailers offering services to record music on MD from CD for customers. You did not need to buy a CD, but you can select whatever songs you like and the service providers would tailor-make a MD for you. This service was very popular in Hong Kong and I believe it would have prevailed somewhere else too!
Soon after the launch of MD, the MP3 industry blossomed. Because of the unstoppable piracy problem, music is free of charge! MP3 players were a lot cheaper and lighter than MD players, and that's why the MD industry was beaten up easily.
And as TGIF shared, the rise of Apple-products and smartphones have brought real revolution to the music industry.
This comment has been removed by the author.
ReplyDeleteJust a friendly reminder, do not show your real name from Blog and change it back to student# :)
DeleteThank you for sharing this amazing case!
ReplyDeleteIn my mind Sony MD-player is well-design and power-functional electronic product. I really like it but it was too expensive at that time so I can’t afford it.But my friend had one, it could perform really good quality sound and using it listening music was really enjoyable. At that time , owning an MD player represent fashion and wealth in mainland China.
I quite appreciate your article, the picture and youtube video fit the content very well .In addition the author also present us the detail data in the chart help us to learn some strategies and market plan made by Sony. The chart of competitors analysis let me know about the each company’s share in portable player market . But I think competitor is not the important reason of the failure of MD-player.
Also Sony did bad in market research or selling strategy in different countries ,for example the inappropriate market strategy in the US .
In my opinion ,the most important reason cause MD-player’s failure is the global
technology trend which you mentioned in the article. From Physical to Digital and From divergence to convergence. In 1998 when MP3 player appeared, the history of portable music player totally changed. This is what MGT 5516 tells us.
Here I make a suppose, if Sony have done well in both market strategy, customer services strategy and price strategy, it will also disappear in history because of the global technology trend.
So, to be an early adopter is important in the modern world.Thank you group11 for giving us the fantastic article.
I appreciate your insights on the failure of Sony MD Player as well as your comprehensive analysis on the reasons for the failure. Your thorough analysis of the internal and external rivalry emphasised the significance of technological development of a product as well as the wise marketing strategies in terms of geographical areas.
ReplyDeleteAs I can recall, the MD Player became fashionable overnight when I was in primary school, but the heat was surpassed not long after by the MP3 Player. Compared to the expensive MD cassettes, the word "free" exerted greater impacts on consumers that, with no doubt, they would choose free music over the paid one. The quality of MP3 music was much worse than that of MD, but still, it could not stop MD from falling behind, for a MP3 Player was more portable than an MD Player. So much as people criticise the quality of free music, there are more and more types of music offering high quality, for example wav, aac, wma, etc. It was a pity that Sony showed no signs of changing or improving its product and swapping their marketing strategies. Therefore, for me, Sony MD Player was doomed to fail.
Hi Team TGIF!
ReplyDeleteThank you very much for the sharing and I really enjoy reading this analysis as I owned a MD player from Sony when I was in secondary school. No doubt it was a very innovative product that first came out of the market. It indeed changed people's life experience of enjoying music.
I agreed with your point of view that the Sony MD players were wiped out due to the invention of MP3 players. However, I think you guys missed to mention that another disadvantage of using MD players is that this product requires an MD to make it functions. Mds are consumables which they do not come with the player when consumers make the purchase. Therefore, the purchase and usage of Mds would increase eventually with the number of songs the consumer would like to copy onto the disk, which is also a very inconvenient action.
In my perspective, Sony failed to consider improvements of the product in a consumer's point of view. They could not be able to make the MD player more user friendly.
Thank you for your sharing. Besides the reasonable analysis of internal and external environment of the company, your analysis for Sony MD player gives me a deeper understanding of industry life cycle. Of course, Incorrect US market strategy, not clear market position and lack of cooperation with suppliers really contributed to the failure of MD player, however, I think the most fatal reason is the wrong forecasting of the entire industry life cycle. With the fast development of Internet and smart phone, the trend of the music industry is to be portable, cheap and high convergence. At that time, the hard disk music industry had entered its decline stage and new trend MP3 player was going to lead the music industry.
ReplyDeleteA very good example for contrast is the success of iPod, Steve Jobs saw the declining of the original music playing industry and believes MP3 player was going to instead, finally, it is proved to be correct by the great success of iPod and iTunes music store. This is the necessity of a reasonable analysis of industry life cycle.
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ReplyDeleteThanks for sharing. I love listen music a lot. Thus, I had a Walkman MD player when I was in the secondary school. So sad to hear that MD player had been eliminated because I think that the tone quality of MD player is better than the quality of MP3.
I agree with you that the main reason why MD became the failure product is the development of MP3 player. The MP3 player allow the piracy. People can listen any music for free. It is convenience for people to download the music from internet and transfer into the MP3 Player.
Also, the shape of MD is not attractive. The MD player was very big comparing to MP3 player. Sony can only develop a smaller MD tape and then make the MD player smaller. But MP3 player was relatively small, people can put it in the pocket.
The lack support from the record company is also a key factor to make MD player fail. Consider why apple can cooperate with many record company. Apple can get the support from record company to place many music in the apple itunes. Sony need to reflect on themselves.
I almost forget the time with Walkman MD until I read you guys' blog. Music was always an important part of our life, and it just keeping change the way how it exist. Your blog have a very clear structure about the failure story of Sony Mini Disc. From the internal and external analysis, I can got a lot of information about the company, and the five - force model really show a deep analysis. A lot of industries were failed with the time goes, so does Sony Mini Disc.
ReplyDeleteThank you Team TGIF for this insightful sharing and it also memorized me of my first Walkman when I was in the primary school :-)
ReplyDeleteGoing through your analysis, I think the biggest reason of Walkman MD failure attributed to Sony's misjudging on the market. Smaller size in physical than normal CD player, one of the biggest strength of Walkman MD is its function of re-recordable discs. Based on Sony's previous successful strategy in penetrating the market from previous audio format releases such as CD and cassette, they have released MD by using the sprinkler market entry strategy. It did success in Japan, and it can largely attributed to Japan's higher CD prices, and by buying a MD, the customers could rent CD in a cheap price and copy the CD on a digital format, besides, it could also maintain the high quality digital sound of CD's.
But it was not successful in US, because the CD prices in US are not that unaffordable, and therefore promoting MD which has a strength in recording in US did not make the sense.
By reading these unsuccessful stories in various products or services, one of the common point that they've made is not correctly identifying the customer's need before starting building a product.
http://tompastro.com/sony-minidisc-failure/
Thanks for the presented infomation providedd by team TGIF, really insightful on how this product went ups and down in the past 10 years. It really remind those people borned in the 1980s and once was fasinated in music. I remember that how sad i was at that time my pareants did not allow me to buy a silver SONY MD for fun because it takes around 5 thousands hkd at that time, a really expensive product for entertainment. However, personally I believe it's been a lovely product that which is not as hard as CD player , and the size is not big so that you can carry everywhere you want without inconvenience.
ReplyDeleteWell looking back to the blog you wrote, the part of " porter five forces analysis" is quite resonable and detailed which i could learn a lot from . And the recommendation part also a good warning for those digital product vendors that how important it is of innovation ahead of the time.
Beside ,the topic you chose is quite good with a very clear product history and industry environment presentaton. I think this blog is worth of reading. In all, hope you guys could give more inspiration for us in the future assignments! Good luck.
Wanna say thx for sharing those wonderful analysis with us. It's well-structured and thought provoking, and really helpful for me to know what's wrong with Song Mini Disc.
ReplyDeleteI agree with you guys about the views of why Sony Mini Disc turned to be an innovation failure example, and I think the analysis methods you presented are very clear, and you used many pics and matrix to colorful your pages, that's great as well.
Here is some suggestions: Try to use SWOT analysis, coz in this analysis, it could help you guys not just only focus on the threats but also the opportunities, that would be help you to come up with more unique recommendations in the end.
^_^
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ReplyDeleteThank you very much for the effort and sharing! MD was such a next generation product that time! With better quality of music and more portable format. But Sony was too greedy, setting many exclusive accessories to limit its users. So once the MP3 arise, its isolated products couldnt cope with the changes at that moment and fell behind.
ReplyDeleteThanks in favor of sharing such a nice thinking, article is pleasant, thats why i have read it entirely. free calling app
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