Sony Playstation

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Sony Playstation

Part 1: Sony's Strategic Analysis: PESTLE Approach


This essay undertakes a strategic analysis of Sony PlayStation using the PESTLE strategy concept. In order to analyse the issues involved, it is important to understand what is meant by strategic analysis. Strategic analysis is a theoretically informed understanding of the environment in which an organisation is operating, together with an understanding of the organisation's interaction with its environment in order to improve organisational efficiency and effectiveness by increasing the organisation's capacity to deploy and redeploy its resources intelligently.

One way to analyse the strategic position of a business is through conducting a political, economical, social, technological, legal and environmental (PESTLE) analysis. In this essay, however, PESTLE concept is selectively approached. This essay focuses on the social and technological issues of Sony PlayStation that could highlight the core picture of the company's strategic standing and directions. I will initially examine the external influences in order to identify elements and key issues effecting the organisation. This analysis will assist in developing a discussion on the rate of technological change identified with the company.

Analysis - Issues effecting games

Innovation and the rate of technological change are prominent issues relating to the technology influences to gaming. From a strategic perspective, the advancement in technological development, along with the growth of 'online gaming', has played a significant role in advancing the gaming industry and Sony PlayStation. Also, the maturity of technology has progressed innovation, forcing Sony to continually reinvent and release new iterations of their gaming consoles to maintain consumer interest, and its position in the market.

Lifestyle trends and demographics have a major influence on the sociological factors that affect the demand for PlayStations games and impact how the company functions in the market. To date, gaming consoles and the vast majority of games are targeted heavily towards children and young adults. However, this causes worry with parents about the influence of computer games on their children's lifestyles and development. Issues relating to how long children should be playing games, the type of game, whether children are being exposed to violence are frequent issues among parents and the older generation.

External influences/changes such as the introduction of new law/legislation and regulatory bodies', effects not just PlayStation games and their competitors, but will influence the entire gaming industry. For example, Sony has to comply with age and content restrictions from international regulatory bodies system (PEGI) or face “temporary removal of the POL licence from a licence holder” (PEGI Code of Conduct) and substantial fines and prosecution. The company has recently received an EU warning and consumer lawsuits over privacy issues following a security breach on the PSN network in April 2011. According to a statement made by Sony, “personal information of 77 million users might have been taken….including, to the extent you provided it to us, the following: name, address (city, state, zip, country), email address, gender, birthdate, phone number, login name and hashed password”. As a consequence of the breach, the Japanese government implemented a block on ...
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