Strategic Management – Midterm Exam

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There are five essay exam questions below. Select three of them to answer.


Each question starts with an abstract of an article in Business Week Magazine. Copy and paste the link into your browser to access the full article.


Question 1


1. Please read the article below by copying and pasting the link into your web browser.


Sony’s TV Business Keeps Fading to Red (




Reviewer: Charles Newman








Two months ago, Sony optimistically

predicted it would sell 27 million TV sets this year; on July 28, it slashed

the figure to 22 million and issued

a profit warning. The television business, Sony’s biggest revenue generator,

is forecast to lose a billion dollars

this year—following seven straight years of red ink. (PHG )Royal Philips

Electronics and several other longtime

rivals have called it quits, saying they can’t compete as prices tumble

into commodity territory. But Sony Chief Executive

Officer Howard Stringer considers the TV unit vital to

helping sell products that work with the company’s

sets, including Blu-ray players and its popular PlayStation

game consoles.





On Aug. 1, Sony said it would not divest its TV business and the next day announced that a reorganization of the unit is in the works. There’s little fat left to cut. Stringer already has eliminated 30,000 jobs, entered into joint manufacturing ventures with rivals and shed assets.


Sony’s widescreen woes aren’t unique. Most major manufacturers are sitting on six- to 10-weeks’ inventory as consumers show scant interest in the latest features such as sets with Internet connectivity or those that can show movies in 3D, says (IHS) IHS iSuppli analyst Riddhi Patel. Not helping matters is the slew of smaller-screen devices such as iPads and iPhones that are competing for consumers’ disposable income.


Discussion Questions


1. Discuss the structural characteristics of the television manufacturing industry using the Five Competitive Forces (Porter) framework. To help you answer this question here is a link to further information TV-Manufacturing-Wars-March2010 ( Feel free to find and cite other information sources as well.


2. Discuss the Sony strategy using the Resource-Based View of the Firm framework.


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