Sharp Corporation: Global Strategy

Introduction

Sharp Corporation is considered one of the pillars of the electronics industry. It started from a mechanical pencil named Ever Sharp in 1912. Since then, the company has expanded its expertise and innovation worldwide. At present, Sharp ranks as one of the most successful electronics firms. Its semiconductor segment is one of the Top 20 biggest in terms of sales. As part of its dedication to innovation, Sharp allocates sufficient resources for its research and development (RD). Its RD spending is one of the biggest in the world listed in the Top 100.

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In 2007, the net sales of the company have reached more than $26 billion. Since 2003, the company has recorded increasing annual sales. Sharp employs approximately 46,000 half of which are based in Japan. The company has 64 established bases in 30 countries worldwide. Sharp products are distributed in over 130 countries. The scope of markets being catered by Sharp is one of the biggest. Sharp Corporation has one of the most revered reputations in the industry. Its product lines are diverse and cover most of the electronic needs in the market.

The success of Sharp Corporation is a result of its focus on strategies. The firm is considered as one of the most systematic when it comes to planning. Sharp recognizes the value of mapping its strategies, especially in global markets. The succeeding discussion will focus on the global strategy of the company. It will detail the internal elements that affect Sharp’s performance. Moreover, the external aspects of Sharp will also be tackled.

Global Strategy

The products of Sharp range from electronic parts to the main gadgets. It is known to produce technologies that are inimitable. Hence Sharp Corporation has remained as one of the leaders of the market. The global strategy of the company is divided into several segments. These include products development, marketing, and intellectual property protection. In addition, Sharp Corporation has a mapped strategy related to innovation. Aside from these technical aspects, the company also addresses issues concerning human resources and corporate social responsibility.

The business strategy of Sharp Corporation centers on its products. At present, the company prides itself on its LCD televisions. The firm bases its focus on LCD production on the increasing demand for such electronic products. Another product that provides Sharp success is a semiconductor. It serves as the main component that gives its product the edge. Semiconductors are key parts of electronic products. Thus Sharp installs its own semiconductors to products. This strategy has been the most important part of the company.

Another part of Sharp Corporation’s global strategy is the continuous expansion of its production plants. The company’s plant in Kameyama increased in size and capacity. Part of the strategy is to limit the cost being incurred by production plants. Instead of relying upon its suppliers, Sharp Corporation co-develops some of the electronic parts. Moreover, the company has reduced its production lines. Sharp Corporation has gradually decreased some production activities that are deemed inefficient.

The research and development strategy is based on the concept of selection and concentration. The RD initiatives of the company aim to reduce product risks. Moreover, the products and processes developed by the RD team become future business pillars. The notable contributions of RD include the ultra-high resolution LCD, the triple-junction thin-film solar cells, the memory technology, the biosensing technology, and the high-power blue-violet laser diode. These major innovations and technologies are being presented by Sharp Corporation to the world.

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Sharp Corporation includes intellectual property strategies as one of its priorities. The company is one of the promoters of patent rights. This will provide protection to the innovations developed by the firm. Most of the details regarding the products are protected. Moreover, the company archives its patents to ensure systematic recall. Corporate social responsibility is another concern that is included in Sharp’s global strategy. Sharp Corporation promotes the protection of the environment. The firm practices recycling and ensure that wastes are disposed of in proper locations.

Global strategies are founded on corporate governance. Managerial decisions are important in implementing strategies. Sharp Corporation ensures that the delivery of decisions is fast. The organizational structure of the firm promotes the idea of collaboration. It allows the integration of ideas and evaluation of decisions. The global strategies of Sharp Corporation also include marketing. Its diverse products mean that Sharp Corporation has to exert effort in promoting its electronic commodities in competitive markets.

Company Analysis

Sharp Corporation is recognized for its internal aspects and external catalysts. Analysis of the company consists of several methods. These include the scrutiny of processes and capabilities that the firm has. Moreover, the analyses will provide insights as to the impact of these aspects on the success of the company. The internal strengths and weaknesses of the Sharp Corporation are important. In addition, external opportunities and weaknesses provide value to the company. The intersections of these aspects can lead to the logic of devising global strategies.

The analysis of the company will also discuss the value-adding schemes implemented by Sharp Corporation. Value-adding activities are critical because they determine the quality of the product. In a competitive market, the methods of adding value are crucial to success. The analysis will provide some external aspects that can affect global strategies and corporate performance. These include political, economic, social, and technological aspects. All of these catalysts determine the manner in which future strategies are made.

The resources of the company serve as the pillar of company operations. Without these resources, the Sharp Corporation will be unable to push through its goals. These resources can either be tangible or intangible. Both are as valuable and complement each other. Another important component of the company is the VRIO framework. This consists of the value, rarity, ability to be imitated, and exposure to exploitation. These aspects are important components of future global strategies.

SWOT Analysis

Hussey (1999) defined SWOT analysis as the scrutiny of the strengths, weaknesses, opportunities, and threats of an organization. This serves as an assessment of the firm’s current market position. The primary strength of the company centers on innovation. The products developed by Sharp identify the company. Another important strength of Sharp Corporation is linked to its reputation. The brands developed by the firm are known to be of high quality. But Sharp Corporation has some obvious weaknesses. These include inefficient production lines and unproductive manufacturing sites.

As stated, the global demand for LCD continues to go up. This is the main motivation for Sharp Corporation to focus on the mentioned product. There are also emerging markets outside its domestic realm. Markets such as Vietnam and China are demand hubs. On the other hand, Sharp is threatened by competition in the market. There are several players in the market competing for a limited market. Moreover, the firm’s innovations are prone to be imitated. The improving technologies have served as instruments for patent infringement to proliferate.

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The strength of Sharp Corporation is founded on its ability to sustain innovation. Perhaps this supports the company’s global strategy on research and development. But the company still needs to improve its production process. Inefficient segments have to be eliminated from the equation. Rising global demand is a major advantage for Sharp Corporation. Imitation, however, needs to be addressed to maintain the value of its products. Keeping the strengths and opportunities and eliminating the weaknesses and threats is imperative.

Five Forces Model

Porter (1979) introduced the concept of five forces that seeks to analyze the competition in an industry. Accordingly, this will serve as an effective tool to carve a picture of the food retail industry. Based on the model, there are four forces that have to be assessed to determine the condition of the fifth force (McGahan, 2004). The threat of new entrants underlines the openness of the industry. Because technology is a necessity, the industry allows competitors to penetrate. The dynamics of the industry makes allows new entrants to participate in the competition.

The threat of substitutes is one of the most important issues that global strategies need to include. The emergence of substitutes can affect the entire electronic market. Computers, for instance, have taken away some of the markets controlled by television manufacturers. The bargaining power of the consumers highlights the capacity of customers to spend. The increasing demand for electronic products suggests that the spending power of consumers is still high. It also shows the change in preference that most consumers have.

The buying power of the suppliers is also a critical aspect for the firm. In the production chain, the suppliers occupy a valuable segment. Without the quality of supplies, it will be difficult for Sharp Corporation to develop high edge products. These factors serve as the preview of the competition in the market. The electronics industry is a highly competitive market. This means that global strategies are highly important. The capacity of Sharp to succeed is dependent on the dynamics of these factors.

Value Chain

As goods are processed, it is expected that value will be added in each stage before the final product is delivered to the consumers. Porter (1985) identified primary activities and support activities in the process of value-adding. The process of value-adding consists of primary and secondary activities. The primary activities are directly concerned with production and selling. These include initiatives such as research and development, inputs, production, and marketing. Sharp Corporation considers these activities as the core that serves as the foundation of the products.

The secondary activities of the company consist of three segments. The development of infrastructure is a contributor to the product value. The capacity of the production sites to meet the demand and limit wastes is emphasized. Logistics is also an important aspect of adding value. The positioning of Sharp stores and delivery routes are part of logistics. Sharp is known for its good store locations and fast delivery service. The third activity concerns human resources. Sharp employees are trained and developed to become competitive.

It is evident that the value of Sharp products emanates from the research and development strategies. In addition, the inputs being used by Sharp are the best in the industry. But the production process remains a concern and needs to be improved further. As mentioned, the improvement of infrastructures is part of the global strategy. Moreover, the employees of the company are well-trained and enhanced. Logistics, however, needs to be emphasized more. Missing this aspect can cause problems in the future.

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PEST Analysis

The political setup can serve as a driving in facilitating the success of a company venturing into different markets (Byars, 1991). Politics in Japan has been stable and has provided Sharp Corporation more stability. The infrastructures developed by the government have allowed the firm to operate efficiently. The economic conditions according to Thompson (2002) preview the possible benefits that Sharp Corporation will gain from expanding. The economies in Europe have provided more opportunities for the company is expanding. In addition, emerging markets in Asia are possible sources of demand.

Social aspects are determinants of tastes and preferences (Johnson and Scholes, 1993). Moreover, social necessities are also part of the global strategy. Most of the societies these days are driven by technology. Hence the preference for electronics is high. Technology is a dynamic creation. It is expected that changes in technology will define its quality. This is the most challenging aspect that Sharp Corporation faces. The firm needs to sustain its initiative are especially in developing products.

Politics can serve as an advantage or threat to Sharp Corporation. Unstable political conditions are bad for business. A better political environment will allow the company to expand further. The economy of countries is also critical. Booms and recessions can directly affect firm performance. In addition, the social structure of markers allows Sharp Corporation to determine target markets. Changes in technology will further improve the research and development strategies including the products.

Resource Analysis

The resources of the company are its primary strengths. These consist of tangible and intangible resources. The tangible resources are inputs used to make the company succeed (Barney, 1991). Tangible resources refer to the financial, physical, technological, and organizational inputs of the company. The financial resources of Sharp Corporation are robust. It was presented earlier that Sharp has been recording consecutive years of net income. In addition, Sharp Corporation is a listed firm in Japan. Its stocks have been a lucrative option for outside investors in the market.

The physical resources of Sharp Corporation are also solid. The company’s manufacturing sites are concentrated in one area. It has established several drop points and service centers to improve customer service. Technology is one of Sharp Corporation’s most valued resources. At present, it has more than 16,000 registered patents in Japan and 21,000 registered patents worldwide. The organization of Sharp Corporation is admired in the industry. It is an interactive organization that promotes collaboration.

The intangible resources of Sharp Corporation are based on several unseen capabilities (Hall, 1992). The knowledge possessed by its employees is valuable. Their skills and capabilities are also valuable to the operations. Innovation is known as a quality of Sharp Corporation. Its creativity in making solutions is established in the industry. Most important, Sharp Corporation has a top-notch reputation. The company has developed a name that is well recognized by the consumers in the market.

VRIO Framework

The VRIO Framework enumerates the challenges Sharp Corporation needs to address. It is an internal instrument that allows the firm to evaluate its products and resources (Hoskisson, et al., 2004). The acronym VRIO stands for value, rare, costly to imitate, and exploited by the organization. It is important for the company to possess resources that add value. Any capability that provides no value needs to be eliminated. The resources have to be rare. This means that only a portion of the market has it. The company’s financial flexibility is regarded as one of Sharp Corporation’s rare resources.

Resources with value and rare are further enhanced once it is not imitable. Competitors have to be barred from accessing these resources. Some of the resources that are not imitable include the processes and intangible capabilities. Physical assets such as design and specifications can be copied. These valuable, rare, and not imitable resources mean nothing when left unused. It is important for Sharp Corporation to make the most out of these resources. Organizing the company is the best first step to achieve this goal.

All assets held by the company are valuable. Otherwise, Sharp will remain never reach its success. Among these valuable resources, only a few are rare. These include the financial resources of the company. For these resources to be inimitable, the Sharp Corporation promotes the application of patents and copyrights. The firm then transforms these resources to make the products. The combination of these resources makes up most of the products made by Sharp Corporation. Protection of resources has to be included in the global strategy.

Sustaining the Global Strategy

The production chain of the company has to be improved. Deming (1986) mentioned the need to attain quality results in all the processes of productions. Essentially, the technical process pertains to the emphasis on quality in the different stages of operations. The rationale behind this strategy is that the continuous inclusion of quality in the process will result in highly competitive and superior products. The social process is provided by Juran (1974) in the assumptions of TQM. The social process includes the provision of suitable tools to boost the tendency of workers to prioritize quality.

The marketing strategies of Sharp Corporation have to successfully promote the products. In the marketing process, a marketing audit has to be present. Brownlie (1993) stated that it is the initial stage in undertaking managerial initiatives in marketing. The focal point of the marketing audit is its design which ultimately determines the process in performing such a method. A marketing audit is a systematic and comprehensive approach that evaluates the marketing initiatives of the company. This is manifested to identify possible problems in the organization, personnel, and marketing activities.

In most parts of the discussion, the value of the employees is established. Therefore it is necessary for the global strategy to include human resources-related actions. The internal resources of the company are responsible for the formation of a distinct competitive advantage. Human resources that create value, rare, inimitable, and non-substitutable are vital components in sustaining competitive advantage (Amit and Schoemaker, 1993).

It is vital for Sharp Corporation to determine the progress showed by competitors. There several processes that will provide the firm market intelligence. Benchmarking is emerging in leading-edge companies as an information tool to support continuous improvement and to gain a competitive advantage. (Lloyed, 1997) In order to benchmark effectively, a company needs a strong strategic focus and some flexibility in achieving management’s goals. To implement benchmarking, planning, training, and open interdepartmental communication are needed. Benchmarking provides cost savings in executing operations and supports the organization’s budgeting and strategic planning process.

Strategic planning is the first step towards the formation of a sound global strategy. This process underlines the valuable aspects that the company needs to emphasize. Mintzberg (1989) observed that strategy is linked to plans and behavior patterns within organizations. The technical process of realizing strategic management covers several aspects relevant to the government. The first phase regards planning as a course for intended strategy and the patterned actions are the realized strategies.

Using the generic strategy will simplify the global strategy that Sharp Corporation maintains. The company needs to address the efficiency of its processes. This can be done by creating solid programs to cut costs and get more value from resources. Logistics is another major issue for the firm. Better location of stores will improve this deficiency. Finally, Sharp Corporation needs to differentiate. Confining its operations to some core products will stall Sharp Corporation’s growth. Products have to change and need to follow current trends.

Conclusion

The global strategy of Sharp Corporation is one of its tickets to success. Since the company has been operating overseas, such as a great necessity. Global strategies guide the company in its operations and other endeavors. These strategies serve as the framework of the company’s operations in foreign markets. Since strategies are valuable, the Sharp Corporation has to determine its needs and goals. In addition, meticulous planning has to be implemented before decisions are made. These global strategies can either make the company succeed or fail.

The company has several notable strengths. The resources that Sharp Resources has are inputs to its great products. Sharp Corporation has enough funds to finance its operations. Research and development spending is one of the highest in the world. The employees of the company are also trained to become more skillful. These resources and capabilities provide advantages. Aside from these assets, the demand for electronic products continues to rise. Moreover, the emergence of markets in Asia creates more opportunities.

Despite this success, there are threats that can hinder the firm’s growth. But these can be addressed by simplifying the global strategy. A generic global strategy can work. This is done by promoting efficiency in the process of production. Sharp Corporation also needs to develop its logistics to create fluid distribution routes. Finally, the firm has to continue to diversify. The company has resources that provide value, rare, and inimitable. But these resources need to be explored to create better products.

References

Amit, R. and Schoemaker, P. (1993). Strategic Management Journal. “Strategic Assets and Organizational Rent.”

Barney, J. (1991). Journal of Management. “Firm resources and sustained competitive advantage.”

Brownlie, D. (1993). Marketing Intelligence and Planning. “The marketing audit: A metrology and explanation.”

Byars, L. (1991). Strategic Management, Formulation, and Implementation – Concepts and Cases. New York: HarperCollins.

Deming, W. Edwards. (1986). Out of Crisis. Cambridge: MIT Centre for Advanced Engineering.

Hall, R. (1992). Strategic Management Journal. “The strategic analysis of intangible resources.”

Hoskisson, R., Hitt, M., and Ireland, D. (2004). Competing for Advantage. Cincinnati: Thomson South-Western.

Hussey, R. (1999). A Dictionary of Accounting. “SWOT analysis.” Oxford: Oxford University Press.

Johnson, G. and Scholes, K. (1993). Exploring Corporate Strategy – Text and Cases. Hemel Hempstead: Prentice-Hall.

Juran, Joseph. (1974). The Quality Control Handbook 3rd Edition. New York: McGraw Hill.

Lloyed, Scott. (1997). Industrial Management. “The Benchmarking Process: Assessing its Values and Limitations.” Institute of Industrial Engineers, Inc.

McGahan, A. (2004). How Industries Evolve – Principles of Achieving and Sustaining Superior Performance. Boston: Harvard Business School Press.

Mintzberg, Henry. (1989). Mintzberg on Management. London: Free Press.

Porter, M. (1979). Harvard Business Review. “How competitive forces shape strategy.”

Porter, M. (1980). Competitive Advantage: Techniques for Analyzing Industries and Competitors. New York: Free Press.

Thompson, J. (2002). Strategic Management, 4th Edition. London: Thomson.

Appendices

SWOT Diagram

Opportunities
  • Increasing demand for electronics
  • Emergence of Asian markets
  • Economic growth in some areas
Strengths
  • Research and Development
  • Diverse products
  • Reputation
Threats
  • Patent Infringing
  • Evolution of Substitutes
  • Political instability
Weaknesses
  • Inefficient production line
  • Weak logistic support
  • Convincing marketing initiatives

Five Forces Diagram

Five Forces Diagram.

Value Adding Chain

Value Adding Chain.

PEST Diagram

Political Economic Social Technology
Policies Boom Taste Innovation
Taxes and dues High Income Preference Diversification

Company Resources

Tangible Assets
Physical
Financial
Organizational
Technological
Expanding production plants
Co-manufactures product components

Recorded straight years of profit
Openness to external investors

Promotes coordination
Fast decision-making

16,000 patents in Japan
21,000 patens worldwide

Intangible Assets
Human Resources

Innovation

Reputation

Well-trained
Provided with benefits and perks

Research and development
Patent protection system

Top 20 highest semiconductor seller
Top 100 highest RD spender

VROI Framework

Resource Competitive Implications V R I O
R&D Sustained competitive advantage Yes Yes No Yes
Products Competitive parity Yes No Yes Yes
Processes Temporary competitive advantage Yes Yes No Yes
Employees Sustained competitive advantage Yes No No
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