Executive Summery Sony’s current financial difficulties are tied into its corporate culture which were stated over 30 years ago. With such a large multinational corporation, greater planning and more use of strategies should be pursued. Sony could start with the implementation of a new mission statement, with profit and benefits of the company tied more closely to everyday operations. Internally, the four forces, the management, the designers, the production and the marketing should achieve better communication and cooperation. Alliance and cooperation between competitors should also be actively sort after in order to create standards in new fields. Sony should aim at being the leader instead of being the maverick. As for cost cutting, Sony should seriously consider setting up operations in other Asian countries in order to take advantage of the cheap labour and the budding markets. Finally, diversification, instead of pursuing the fast changing and easily imitated consumer goods market, Sony should use its technological know-how for high-end business and office equipment.
With SWOT analysis and Porter’s competitive forces model, we can view that the market is much more competitive with less profit margins and lead-time for product innovation. The conclusion is that change is needed in Sony. However,even with strategirial and structure change, the Sony spirit of innovation should remain intact because that is what made Sony grow and would make it stay strong. Introduction The first thing that comes to peoples minds of the company and products of Sony is its high-technology-filled-with-gadgets electronic goods and innovation. It was also this innovation that make Sony the greatest company that started in post-war Japan. Sony has used its innovation in building markets out of thin air, created a multibillion, multinational electronic empire with products such as the transistor radio, the Trinitron, the Walk-in and the VTR. that changed everyday household lives forever.
The Research paper on General Electric Medical Systems – Global Product Company Concept
The Global Product Company concept means ”to concentrate manufacturing – and ultimately other activities – wherever in the world it could be carried out to GE’s exacting standards most cost-effectively”. That means that the production is moving to countries where people are mostly underutilized (the example given in the case study tells about engineers from Eastern Europe, who cost only $1,5/h). ...
However, this consumer targeted quest for excellence and constant innovation instead of targeting mainly at profit also has a lot to do with current crisis Sony is facing – sales and profits are down or are slowing down, capital investment cost and R&D are climbing, competitors are moving in with copycats, the battle between VHS and Beta and the search for a smash hit product such as the Trinitron or the Walk-in. This volatility and emphasis (or gambling) on new products instead of concentrating on profit and loss statements have always been a part of Sony since its beginning days. For each successful product (i.e. transistor radio and Trinitron), R&D cost often ran so high that the they pushed the firm to the verge of bankruptcy. This can also be seen through the eyes of the investor in which although sales have increased tremendously throughout the past twenty years, the stock price has remained relatively low. History and Culture The current Sony corporation has a unique culture which is firmly rooted in her history especially in relationship to her two founders, Masaru Ibuka and Akio Morita. Ibuka and Morita were both dedicated electrical engineers and geniuses above their business talents.
Both gave insights and visions in what the company should make and how it should be made. Ibuka, especially, gave constant advice and suggestions to the engineers involved in projects from the earlier on transistor radios to Walkmans. This created the umbrella strategy in which Sony operates under where the top management, especially Ibuka, Morita and now Norio Ohga gave the general direction in which the lower engineers actively learned, developed and improved on the vision/idea. Therefore, although there is a planned direction, the actual product development through launching is emergent with great flexibility. Although the research and development section of Sony differs greatly from other companies with its great flexibility, Sony, in its essence is still a traditional Japanese company in many ways. There is life-time employment, with strong norms and values which in turn create strategies through their actions. Status is given (the crystal award) instead of bonuses (not significant amount) for superior achievement. There is also the strong seniority system such as the mentor and apprentice relationship that is typical of a Japanese firm. All this can be classified as the cultural school in which strategy formation is of collective behaviour. Collective vision and stress on human resource, which is typical of many Japanese, can be clearly seen in the mission statement “Management Policies”.
The Research paper on Sony Corporation: Globalization Meets Localization
What is a transnational corporation? Select any one and present a short essay on what the company produces, where are the facilities located, and refer to aspects of capital, labor, and markets of its final product. Abstract: A transnational corporation is a nationally based company that manages production units or provides service in two or more countries. They are corporations that make ...
Weaknesses and Threats Referring to Exhibit 1, sales has slowed down considerably since the beginning of the 80s. In the domestic market, sales actually decreased by 7.22%. The overseas market expanded both in real terms and relative to total sales, but slowed down to around 10% a year. This can be seen as the vacuum period between one hit product, the Walkman, and its succession. As mentioned by Ibuka, business is conducted in a ten year cycle. However, in the eighties, the product might still take a few years to develop, but the time reaping the results and profits might be much less.
As seen in the VTR example, both the VHS and Beta were developed by Sony. However, in a short time, Matsushita could come up with a competitive product based on Sony’s technology. Therefore, it is fair to say that other electronic firms would be able to copy Sony’s technology in a much shorter time while offering more competitive prices. The margin for technology advancement is therefore diminishing. Associated with innovation is the capital expenditure cost and return on investment ratio. As seen from Exhibit 1, capital expenditure has risen dramatically, especially in 1981, due to the automation of plants. However, the return on investment has decreased. Spending around 10% of sales on capital investment is by all company standards an extremely high figure.
The Term Paper on Sony Corporation: Car Navigation Systems
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 ...
The question is that does this high rate of investment represent corresponding growth in profitability? As mentioned above, the diminishing returns from product innovation is apparent. However, the internal dimension also poses as much of a problem. With its great freedom, research and development are divided into small teams which are free to pursue their interest with little reference to “how it will fit into a market, what the product can do, how well it will function or how it could be used by customers.” Secret projects without management knowing about them until “secret reports” are submitted are of common practice. With this kind of practice, there is lack of communication between management and R&D and threat of duplication of resources among the small groups. There is also a lack of general direction. This would be especially prominent when Ibuka and Morita, the symbolic leaders and founders retire.
This is because the two in many ways act as the main guidance and bridge between management and the engineers. Therefore, there is also a succession problem. Sony has always been a leader in technology, creating markets by looking for new markets where bigger, well-established companies are not a threat. However, new products such as VTR, the Walk-in and the Mavica involve both hardware and software. Sony can no longer just produce superb quality machines and expect them to sell. The software would also have to be available. For the Walkman, cassette tapes were well established but for the Beta system and Mavica, a standard has yet to be set. For example, the images of Mavica would be held on a high density magnetic disk but Kodak, 3M and Sony all have different systems and are not compatible.
The Mavica system also stands alone with little compatibility with conventional systems and little transitional interfaces. This leads to the problem of cooperation where Sony is often the maverick, alone creating markets. With Sony entering markets such as the VTR with no standards, it might be beneficial to both Sony and other vendors if they cooperated instead of competing on conflicting software that supports the systems. This could also be seen in Exhibit 2, the Porter competitive forces mode: new entrants from other Asian countries, other Japanese industry competitors, substitutes and buyers are all strong and much stronger than 20 years ago which reinforce the weakness of Sony acting alone. Last but not least, Sony lacks strategy. Product development, manufacturing and marketing are all well established but the firm lacks any formal long term direction. The original mission statement is also outdated with its references to W.W.II.
The Research paper on Emirates Dates And How To Market The Product In (Sweden)
There are various strategies of expanding one’s business. The decision of which strategic move to choose is generally depends on internal conditions of the business in discussion. There are companies that manage to stay in their local markets and continue to harness growth from it, while others discover potential markets in foreign countries that drive them to expand. In the case of business ...
Short term strategy is also lacking and there is little emphasis on profit and accountability of research and development of products. The result: a company with strong components but unable to coordinate in a coherent way in order to achieve maximum potential. Strengths and Opportunities The greatest asset of Sony is of its human capital, especially its engineers which make up the R&D department. Their constant innovation is crucial for a consumer electronic firm which specializes in audio-visual equipment and the higher profit margin, which comes from being the leader of the pact. Subsidiaries are also well established, such as in the United States and Europe which give Sony a distinct local hands-on knowledge of the local market. It also makes Sony an international corporation, bringing together the talents and best of strategies of both world to the organization. Besides the employees, the two founders, Ibuka and Morita also legen ….
