Sony Corporation Executive Summary

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. 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". 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