1) The purpose of this exercise is to understand how to analyze the value chain in a technology business. The following entities are parts of the value chain for delivering music to customers over wireless phones: record labels (they record and compile the songs in a digital format available for transmission to customers), wireless application service providers (they operate the wireless platform on which the phones operate), providers of mobile delivery (they offer connectivity and transmit music over the radio waves to devices), content creators (they write and sing the songs listened to by the customers), and handset makers (they provide the phones that are used to play music).
Please place these elements in the order that they would appear in a value chain that begins with the initiation of the process and ends with the customer. Second, evaluate the amount of value that you think is provided at each stage of the value chain. What stages generate a lot of value? What stages generate relatively little? Explain your reasoning. Third, identify the nature of the relationships between stages of the value chain (are they vertically integrated or contracted out)? Explain why the dominant form of relationship between each stage tends to be vertical integration or contracting. Fourth, identify at least two supporting aspects of the value chain that do not provide a competitive advantage to firms in the industry. Explain why these aspects of the value chain do not provide firms with a competitive advantage.
2) Go to Sony’s Web site www.sony.net. Read through the different Web pages. Are there any common themes among its products in electronics, music, games, movies, and financial services that might identify the company’s core competencies? For example, does the company have capabilities in product design that cut across a variety of products? What about manufacturing? What about miniaturization of products? List all of the core competencies that Sony has, and explain why you think that they are core competencies. Then identify a new technology that you think that Sony could use to create a product that would meet customer needs and draw on these core competencies. Specify which of the company’s core competencies will help to exploit the new technology successfully and explain why those competencies will help.