Sony was the first company in the 1990's to launch the car navigation system. Sony was the market leader with a 60% market share in 1993. Sony had also led a group of 40 companies in an industry standard called Naviken which enabled consumers to benefit from mutually compatible digital map software while manufacturers reduced their risk by sharing development costs. However, competitors not in the NaviKen group were able to introduce new and improved products more often and more rapidly by developing or acquiring proprietary digital map technologies. Sony could not keep up with this development and the market share dropped to 15% in 1996. In Europe and the US, Sony was also the first one that introduced the navigation system, but local manufacturers in Europe started to launch competing products aggressively. Other Japanese competitors were expected to enter the Europe and the US market by 1997.
The problem definition is the following:
How can Sony boost sales and recapture lost market share in the highly competitive Japanese market and at the same time expand to Europe and the US in order to stay ahead of the growing competition and the technological development?
The concept of the car navigation system had been around in Japan since the early 1980's, Honda claimed to be the first company to put a navigations system on the road. The Japanese market for car navigation systems was the world largest in 1995 with sales of 580,000 units and $840 million. Sony's competitors in Japan were Pioneer, Mitsubishi, Matsushita and Alpine.
The European market stood behind the Japanese market for five years. The market began to develop when major companies like Bosch and Philips introduced products in Germany and France, which became Sony's competitors in Europe.
In the US, car navigation systems were...