Economics and Sony Essay

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Economics assessment outcome 1
As Sony begins production of their new product, PlayStation move, define the following costs and explain the short run influences on each. Illustrate your explanation of each cost with a diagram.
1a.As Sony begins the production of their new product, the total cost of the firm is the total cost incurred in the production of their output, Sony total cost will include their variable and fixed cost, an example of variable cost is the raw materials. The variable cost of Sony is the cost in line with the production and sale of a product. While the fixed cost of Sony are those cost that do not change even if output increases or decreases. Example of this is software, design and development. In the short run, the
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For instance, Sony motion controller for its PlayStation is similar to Nintendo Wii. Sony has spent a huge amount of money in the production of the MOVE and the reason for this is to win customers by a non-price competition which focuses on the strategies on increasing the market share. Non-price competition has the following features: distinctive packaging, special features to their product. For example the motive of the MOVE is to tract the movement of a wand while the PS3 eye camera tracks body movement. Sony therefore intends to take a lead over Nintendo by a non-price competition but rather with feature in the game.
Barriers to entries occurs when there are some significant factors that make it difficult for new firms to break into the market; they make the existing companies valuable in other to avoid the entrance of new rivals, because they want to reserve their share in the market. On like Sony launching a motion controller for its play station to challenge Nintendo Wii branding and distribution can also create barriers to entry as most company have to invent or create a product that will challenge the product of the existing company. Sony has seen that Microsoft looks out for a project Natal which will allow users to play games controlled by body movement. This new idea can be a barrier to entries for Sony, in other to invade into the market, Sony launched a motion controller.

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