Harvard Case - Sony Corporation's Aibo: An Intelligent Decision?
"Sony Corporation's Aibo: An Intelligent Decision?" Harvard business case study is written by Tulsi Jayakumar. It deals with the challenges in the field of General Management. The case study is 15 page(s) long and it was first published on : Mar 9, 2018
At Fern Fort University, we recommend that Sony Corporation continue to invest in and develop its Aibo robotic dog, leveraging it as a strategic asset to drive innovation, expand into new markets, and enhance its brand image. This recommendation is based on a thorough analysis of Sony's current position, the evolving market landscape, and the potential of Aibo to contribute to the company's long-term success.
2. Background
This case study examines Sony Corporation's decision to reintroduce the Aibo robotic dog in 2017, after discontinuing the original version in 2006. The original Aibo was a groundbreaking product, but its high price and limited functionality led to its eventual discontinuation. The reintroduction of Aibo in 2017 was a strategic move by Sony to re-enter the robotics market, capitalize on advancements in artificial intelligence (AI) and machine learning, and appeal to a growing demand for companion robots.
The main protagonists of the case study are:
- Sony Corporation: A multinational conglomerate known for its consumer electronics, gaming, and entertainment products.
- Hiroyuki Torii: The CEO of Sony Corporation at the time of Aibo's reintroduction.
- The Aibo development team: A group of engineers and designers responsible for developing and refining the new Aibo.
3. Analysis of the Case Study
Strategic Framework:
We will use a combination of frameworks to analyze Sony's decision to reintroduce Aibo:
- Porter's Five Forces: This framework helps assess the competitive landscape and identify potential threats and opportunities.
- SWOT Analysis: This framework analyzes the company's internal strengths and weaknesses, as well as external opportunities and threats.
- Innovation Management Framework: This framework helps evaluate the strategic value of Aibo as a driver of innovation and its potential to create new markets.
- Corporate Social Responsibility (CSR) Framework: This framework assesses the ethical and social implications of Aibo's development and its potential impact on society.
Analysis:
- Porter's Five Forces: The robotics market is characterized by high barriers to entry due to the complexity of technology and the need for significant investment. However, the market is also fragmented, with several players competing for market share. The threat of substitutes is moderate, as other forms of entertainment and companionship exist. The bargaining power of suppliers is moderate, as there are several suppliers of components and technology. The bargaining power of buyers is moderate, as consumers have a range of choices in the robotics market.
- SWOT Analysis:
- Strengths: Sony's strong brand recognition, global reach, expertise in consumer electronics, and experience in robotics.
- Weaknesses: The high price of Aibo, limited functionality compared to other robots, and potential ethical concerns related to companion robots.
- Opportunities: Growing demand for companion robots, advancements in AI and machine learning, and the potential to create new markets in healthcare and education.
- Threats: Competition from other robotics companies, potential for ethical backlash, and the risk of technological obsolescence.
- Innovation Management Framework: Aibo represents a significant innovation for Sony, as it leverages AI and machine learning to create a highly interactive and engaging companion robot. This innovation has the potential to create new markets and generate new revenue streams for Sony.
- CSR Framework: Aibo raises several ethical considerations, such as the potential for emotional dependence on robots, the impact on human relationships, and the potential for misuse of the technology. Sony has a responsibility to address these concerns and ensure that Aibo is developed and used in a responsible and ethical manner.
4. Recommendations
Short-Term:
- Enhance Aibo's functionality: Improve Aibo's ability to learn and adapt to individual users, expand its range of interactions, and enhance its emotional intelligence.
- Reduce the price of Aibo: Make Aibo more accessible to a wider range of consumers by lowering its price. This can be achieved through economies of scale, cost optimization, and exploring alternative manufacturing processes.
- Develop a robust marketing strategy: Target specific customer segments, leverage social media and influencer marketing, and highlight Aibo's unique features and capabilities.
- Address ethical concerns: Establish clear guidelines for the use of Aibo, develop mechanisms to mitigate potential risks, and engage in open dialogue with stakeholders about the ethical implications of companion robots.
Long-Term:
- Expand Aibo's applications: Explore opportunities for Aibo in healthcare, education, and other industries. This could involve developing specialized versions of Aibo with specific functionalities.
- Develop a platform for Aibo: Create a platform that allows developers to create new applications and features for Aibo, fostering an ecosystem of innovation and creativity.
- Invest in research and development: Continue to invest in AI and machine learning to enhance Aibo's capabilities and explore new applications.
- Build strategic partnerships: Collaborate with other companies in the robotics, AI, and healthcare industries to expand Aibo's reach and capabilities.
5. Basis of Recommendations
These recommendations are based on a comprehensive analysis of the case study, considering:
- Core competencies and consistency with mission: Aibo aligns with Sony's core competencies in consumer electronics, robotics, and entertainment. It also supports Sony's mission to 'create products that inspire and amaze the world.'
- External customers and internal clients: Aibo has the potential to appeal to a wide range of customers, including individuals seeking companionship, families with children, and institutions seeking innovative solutions in healthcare and education.
- Competitors: Aibo faces competition from other robotics companies, but its unique features and Sony's brand recognition give it a competitive advantage.
- Attractiveness ' quantitative measures: The potential market for companion robots is large and growing, and Aibo has the potential to generate significant revenue for Sony.
6. Conclusion
Sony's decision to reintroduce Aibo was a strategic move that reflects the company's commitment to innovation and its understanding of the evolving consumer landscape. By continuing to invest in and develop Aibo, Sony can position itself as a leader in the growing robotics market, enhance its brand image, and create new revenue streams.
7. Discussion
Alternatives:
- Discontinue Aibo: This would be a short-sighted decision, as it would miss out on the potential of a growing market and the opportunity to leverage Sony's strengths in robotics and AI.
- Focus on other markets: Sony could focus on other markets, such as healthcare or industrial robotics. However, this would require significant investment and expertise in those areas.
Risks and Key Assumptions:
- Technological obsolescence: The rapid pace of technological advancements could lead to Aibo becoming outdated.
- Ethical concerns: Public backlash against companion robots could negatively impact Aibo's adoption.
- Market demand: The demand for companion robots may not be as high as expected.
Options Grid:
| Option | Advantages | Disadvantages | Risks |
|---|---|---|---|
| Continue investing in Aibo | Potential for high growth, aligns with Sony's strengths, enhances brand image | High initial investment, potential for ethical backlash, risk of technological obsolescence | Market demand may not be as high as expected, competitors may enter the market |
| Discontinue Aibo | Conserves resources, avoids potential risks | Misses out on potential market growth, diminishes Sony's brand image | May damage Sony's reputation as an innovator |
| Focus on other markets | Potential for growth in new markets | Requires significant investment and expertise, may not be aligned with Sony's core competencies | May face competition from established players in those markets |
8. Next Steps
- Develop a detailed roadmap for Aibo's development and marketing. This roadmap should include specific milestones, timelines, and resource allocation.
- Establish a cross-functional team to oversee Aibo's development and implementation. This team should include representatives from engineering, design, marketing, and legal departments.
- Engage with stakeholders to address ethical concerns and build trust. This could involve conducting public forums, establishing advisory boards, and collaborating with ethical experts.
- Monitor Aibo's performance and make adjustments as needed. This includes tracking sales, customer feedback, and competitive developments.
By taking these steps, Sony can ensure that Aibo becomes a successful product that contributes to the company's long-term success.
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Case Description
In November 2017, the chief executive officer of Sony Corporation was preparing to announce the company's release of its rebooted robo-pup, the Aibo-a robot equipped with sensors and actuator technologies, and powered by artificial intelligence that allowed this virtual pet to behave like a real dog. Sony Corporation, the 70-year-old iconic Japanese manufacturing company, had diverse businesses. After significant restructuring since 1999 to address its financial troubles, the company was expected, in March 2018, to post a record operating profit for the first time in two decades. How did a virtual pet business, especially one that had already proved unviable in the past, fit into such a restructuring exercise? Was Sony Corporation's Aibo an intelligent decision?
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