Sharp - a Strategic Analysis
1. Why has Sharp been so successful for so long? What are its business and technology strategies?
Sharp’s market entry to the electronics industry was through low cost assemble. However, Sharp soon realized that it could not complete in scale the well-established industry leaders such as Sony and Mutsuhito by playing catching up. Sharp’s decision to abandon this strategy of catching up in sales volume was a sound one, as well as its refocus where it thought it could win. Sharp also realized that the electronics assembly industry was a lost cost industry and margins were very minute. The only way to make money was to concentrate on cost efficiency. Ultimately, in order to be profitable, Sharp had to go for product differentiation strategy and stand out amongst its competition. Rather than emphasizing on all electronic devices and appliances, Sharp’s technology strategy was to become a leader in crucial components of the overall solution. In order to do so, Sharp had to reorganize as a company to develop innovative and industry leading products. This resulted in the creation of products, such as the “New Life Products”, that met the consumer needs and had the potential of further product diversification.
Sharp’s Business Strategies – Acceptance from its employees and buy-in with active participation were key to Sharp’s overall success. As a result, Sharp created a culture of entrepreneurship and innovation. Members of the company were often long-time employees as the company created a sense of family at the work place. It also created an open forum for new ideas and promoted employees to be more engaged through employee empowerment. Additionally, there were bonus and a strong merit system in place to promote performance. As promotion was perceived at the greatest level of achievement, Sharp allowed all employees to apply for management roles in a confidential manner. This was done due to the notion in Japanese culture that applying for management might be seen as a
Sharp’s market entry to the electronics industry was through low cost assemble. However, Sharp soon realized that it could not complete in scale the well-established industry leaders such as Sony and Mutsuhito by playing catching up. Sharp’s decision to abandon this strategy of catching up in sales volume was a sound one, as well as its refocus where it thought it could win. Sharp also realized that the electronics assembly industry was a lost cost industry and margins were very minute. The only way to make money was to concentrate on cost efficiency. Ultimately, in order to be profitable, Sharp had to go for product differentiation strategy and stand out amongst its competition. Rather than emphasizing on all electronic devices and appliances, Sharp’s technology strategy was to become a leader in crucial components of the overall solution. In order to do so, Sharp had to reorganize as a company to develop innovative and industry leading products. This resulted in the creation of products, such as the “New Life Products”, that met the consumer needs and had the potential of further product diversification.
Sharp’s Business Strategies – Acceptance from its employees and buy-in with active participation were key to Sharp’s overall success. As a result, Sharp created a culture of entrepreneurship and innovation. Members of the company were often long-time employees as the company created a sense of family at the work place. It also created an open forum for new ideas and promoted employees to be more engaged through employee empowerment. Additionally, there were bonus and a strong merit system in place to promote performance. As promotion was perceived at the greatest level of achievement, Sharp allowed all employees to apply for management roles in a confidential manner. This was done due to the notion in Japanese culture that applying for management might be seen as a