Environmental Factors

Environmental Factors

By: Kathy Sanchez

January 12, 2013

MKT/421

Environmental Factors

The purpose of this paper is to identify the environmental factors the affect global and domestic marketing decisions. This paper will be addressing and analyzing the influence, effect and importance of different environmental factors that affect the Sony Corporation as it conducts business in different global markets worldwide.

Sony Corporation is one of the leading manufacturers of audio, video, information technology and communications products for professional markets and consumers. Akio Morita and Masaru Ibuka founded Sony in 1946 when they borrowed $500 in capital to establish a partnership. The original name for their company was Tokyo Telecommunications Engineering Corporation (TTK), (Sony Europe Limited, 2013). Sony’s first electronic invention was an automatic rice cooker. It was the first of many innovations created by the Sony Corporation. In 1955 Sony released their first transistor radio, three years before they officially changed their name to Sony (Sony Europe Limited, 2013).

Since the release of their first transistor radio Sony’s popularity rose quickly up the ranks. In 1990 Sony registered record earnings of $58.2 billion yen which was a 38.5% increase over the previous year (Funding Universe, n.d.). Sony attributed their success to being able to anticipate the demand of their customers and developing products that met the wants and needs or the public (Funding Universe, n.d.). Timing their expansion with the rapidly developing transportation, financial markets, and communications Sony was able to expand into a global firm.

According to Armstrong & Kotler, (2011) a global firm is one that, by operating in more than one country, gains marketing, production, R&D, and financial advantages that are not available to purely domestic competitors. Global firms like Sony are subjected to environmental factors (e.g. political, technological, economic, and cultural and such), which increases the risk the company takes and could jeopardize the company’s success. In the next few paragraphs we will discuss some of the environmental factors that affect the global and domestic marketing decisions that affect the Sony Corporation.

Effect of Political systems and the influence of international relations

Because the political and legal environments differ from country to country companies that decide to conduct their business in another country must take into consideration the country’s governmental bureaucracy, political stability, monetary regulations, and the attitudes it has towards international trade. Several countries favor conducting business