Buzz in the sports world early this week related to golf. As a result of his inability to win the Deutsche Bank Championship, Tiger Woods lost the prestigious number one ranking as the world’s best professional golfer. Vijay Singh took the title from Woods who had held the honor for 264 consecutive weeks, longer than anyone in the 18-year history of the rankings.
Buzz in the retail industry this week also pertains to a record holder, Wal-Mart, which has been the nation’s number one retailer since 1990. In this case, however, it’s not a replacement at the top spot; it’s the announcement that Wal-Mart will soon be increasing the electronics offerings available in its nearly 2,900 stores across the US.
Expansion of these products is being made possible by the desire of Sony Corporation to put more of its wares on store shelves in America in an effort to fend off the stiff competition it is facing from South Korean and Chinese rivals. Wal-Mart Stores, Inc., and Costco Wholesale Corporation are the two main avenues along which Sony hopes to travel in order to achieve that objective.
In the past, Sony primarily focused its efforts on marketing high-end items through consumer electronic stores. At the same time, major discounters were instrumental in achieving higher levels of sales for Sony’s competitors. Now Sony wants to stem the flow. To boost sales and gain greater market share, Sony plans to sell a wider range of products at Wal-Mart stores.
Wal-Mart and Sony already have at least two things in common. Both began their American operations in the early 1960s and have similar corporate cultures. Each company seeks to be innovative, pursue infinite possibilities, and provide customers with quality products at the most economical prices.
Sony created its name by combining two words. One is Latin, sonus, referring to sound, and the other is an English term, sonny, meaning “little son.” The words were combined when the company was founded in 1946 to show that Sony was a group of young people who had energy and passion regarding unlimited possibilities. The company established the Sony Corporation of America in 1960.
Wal-Mart is also a combination of two words. The first is part of the last name of Sam Walton, the founder, and the second pertains to markets where products are sold. In 1962, as Walton was opening his first store in Rogers, Arkansas, Kmart, Target, and Woolco were starting their operations. Over the next three decades, Wal-Mart surpassed them all to become the leading retail discounter. Using the nationwide customer base of Wal-Mart, Sony hopes to achieve the same success by breaking away from its traditional marketing approaches.
With Wal-Mart’s buying power and ability to pressure manufacturers to keep prices at certain levels, Sony might well be able to enhance sales, yet the possibility remains that the corporation could see lower profits. Sony faces an intricate balancing act between increasing market share and decreasing its prices, which has the potential in some cases to damage brand images. One thing is certain: retailers in the electronics industry are going to confront a set of challenges much like those faced by many others as the discount giants have expanded.
But, as Sony’s vision statement proclaims, “We invite new thinking, so even more fantastic ideas can evolve. We take chances. We exceed expectations. We help dreamers dream.”
Whatever the final outcome is for Sony’s ranking in the electronic industry, consumers stand to benefit from lower prices because of the new partnerships. And that’s good news with just over three months left until Christmas.