Careful Study of Sony Corporation

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Sony corporation was founded in 1946 by Masaru Ibuka and Akio Morita. Its first invention was rice cooker which had failed and led to G-TYPE recorder in 1950, it also introduced pocket transistor radio in 1957. A cathode-ray tube was launched on October 15, 1967 which helped them in video innovation. Its headquarters are located in Japan where large parts of production, distribution and manufacture takes place. Sony Music Entertainment was created by forming a joint venture between Sony corporation and CBS Inc in 1968 which later wholly-owned by Sony corp. in 1991. It came up with an idea called ‘world’s first direct-view portable TV’ in 1960. It dispatched DVD recorder in 2003, interface designs in 2002, digital camera (CyberShot DSC-F1) in 2001, laptop in 1997, personal computer in 1983, headphones in 1979 and also the first organization to create mp3 player, camcorder, magnetic video camera, world’s first CD player, Walkman, batamax (VCR), Play Station gaming system, Blu-ray, handycam and High definition video. Sony being a Japanese company currently operated by president and chief executive officer, Mr. Kazuo Hirari is the leader in manufacturing audio, video, game, communications and information technology products and also called as broadband entertainment company in the world. The offices are located around the world including United Kingdom, United States, Japan, Singapore and China. It is declared as world’s first pioneer of portable digital products and one of the world’s largest electronics manufacturers.

Sony’s operations and achievements include Xperia, Walkman (TPS-L2), Sony Music, Columbia Pictures, PlayStation and more.

On December 18, 2018, the ‘2018 World Brand Top 500’ compiled by the World Brand Lab announced that Sony brand ranked 100th out of top 500. Sony has established production base in Asia with a wide sales network in around 200 nations across the globe. They have a strong marketing network in Japan, US and Europe.

Sony Subsidiaries and International exposure

In October 1968, the world’s first color TV with Trinitron image technology was launched: KV-1310.
In 1978, a revolutionary CCD (charge-coupled device) sensor technology was developed.
In 1983, United Kingdom – Philips aligned with Sony to release compact disc (CD) and led the 74-minute standard.
In October 2001, Sony and Ericsson each held 50% of the shares and jointly formed Sony Ericsson.
In December 2004, the next generation of PlayStation Portable handheld game consoles using UMD storage media was invented.
In January 2005, IBM and Toshiba (TOSHIBA) jointly released the Cell-microprocessor with 4GHz start-up.
On May 16, 2005, the E3 show in the United States released the Station 3 generation game console equipped with the Cell processor.
On July 19, 2005, he announced a partnership with Konica Minolta (Konica Minolta) to join the digital SLR camera market in response to the saturation of consumer digital cameras.
On August 25, 2005, the joint IBM and Toshiba (TOSHIBA) announced the detailed process of the Cell-microprocessor.
On September 13, 2005, September, BRAVIA’s next-generation LCD TVs were released worldwide.
On September 30, 2005, SanDisk released a Memory Stick Micro (M2) memory card.
In 2006, Ericsson decided to expand its cooperation with Sony, in addition to continuing the original mobile phone design and manufacturing business, the two parties will jointly develop software for mobile and broadband TV applications.
On February 21, 2006, the world’s smallest support high-definition 1080i HDV-HC3 was released.
On April 20, 2006, the brand new digital SLR camera brand (alpha) was released.
In November 2006, PlayStation 3 equipped with Cell processor and next-generation Blu-ray technology was officially launched in Japan, the United States, Taiwan, and Hong Kong.
On November 2, 2006, the eighth-generation S-LCD panel factory, which was put into operation with South Korea’s Samsung Electronics, officially started construction. It is expected to officially put into production capacity in the fall of 2007.
On November 11, 2006, the PlayStation 3 generation game console was officially launched in Japan and 100,000 consoles were sold out in an instant.
In January 2011, the PlayStation VITA second-generation handheld gaming console with quad-core, dual joystick and front and rear touch screens was released.
On October 27, 2011, Sony announced that it will acquire the remaining 50% of the shares for 1.50 billion euros. It is wholly-owned and announced that it will stop using the ‘Sony Ericsson’ brand from mid-2012. In the future, the mobile phone will be unified with the ‘SONY’ logo.
In April 2012, Sony was approved by the European Commission to acquire the established music company EMI also known as Universal Music Group for $2.2 billion. So far, Sony has become the world’s largest music company, controlling one-third of the world’s music copyright.
In July 2012, Sony acquired the cloud game company GAIKAI for $400 million to expand its future gaming machine business.
On June 10, 2013 the PlayStation 4 was released in London.

Joint Ventures

Sony Ericsson

A joint venture between Sony and Ericsson on Oct 1, 2001. Sony Mobile’s exclusive operation is to create smartphones under the Android-Xperia sub-brand, as well as device accessories and software. The strategy is to release new models that enable digital photography and other multimedia features.

Sony ESPN

Sony Pictures Networks India partnered with ESPN to form a joint venture called Sony ESPN, which was officially launched in October 2015. The channel is aimed at the Indian subcontinent and is commented in 6 languages, the NFL season (2016) aired IPL competition (2016-17) with NFL playoffs, Super Bowl and Pro Bowl. Sony ESPN’s content includes cricket, football, hockey, tennis, golf, NBA basketball, badminton and other activities.

Ghelia

Sony Computer Science Labs, in collaboration with Japan’s AI venture capital firm UEI and the Business Incubator World Innovation Lab, launched a new joint venture to help companies collect data and develop artificial intelligence programs. This joint venture through UEI aims to create a platform to provide basic services to companies that incorporate AI into their business.

According to the pie chart, the data showed that the FY 2017 results accounted for about 43 bin yen of Games and Network Services, which was the most proportion in the whole pie chart, and the Financial was the second proportion, about 36 bin yen. Other factors are Semiconductors, Music, Home Entrainment and Sound, Pictures, Imaging Product and Solutions, Mobile Communications.

According to the value of supply chain transaction by geographic area, mainland was China and Hongkong region, accounting for 39%, the smallest proportion is in the United States, only 1%.

According to the value of supplier transactions by geographic area, China and Hongkong region, accounted for 39%, which is largest proportion and United States accounted for 1% which is smallest proportion.

SWOT Analysis

Strengths

Sony corporation has a very strong brand image;
It has worldwide reputation;
It has High market share;
It serves high quality products to its customers;
High technology is used in manufacturing the product;
It is pioneer in the industry as being creative and innovative;
Diversification in manufacturing locations around the world;
It has wide cover spectrum over multiple market.

Weaknesses

There is a lack of dominant mobile devices;
It has vulnerability of databases and networks;
More number of Sony’s products are imitated in the market;
Especially in its television business, the high cost of media production has affected the company’s pricing strategy;
It has lost an equivalent of 6.3 billion Dollar for eight years in a row;
It is losing its market share to manufactures, such as Samsung and LG;
Competitively, the products are more costly.

Opportunities

Sony is one of the most recognized and loved brands in the world;
Sony plans to implement some network initiatives to expand the TV business;
International consumption of American TV dramas continues to remain strong;
On the international market side Sony plans to launch six new regional language games, and Sony will transfer its gaming technology to its London studio to India;
It can take advantage of its music and movie industry along with its experience in the gaming area to deliver value added content to integrate and support its product line.

Threats

The company is facing price competition from competitors such as Samsung and LG, who are gaining traction with lower cost products such as mobile devices and televisions;
Its online network is facing treats from hackers (The company’s Play station network was hacked, resulting in customer’s information leakage such as credit card data).

Challenges

European economic issues have slowed growth of the AD sales market in many territories. Programming prices are expected to rise, volatility of foreign currencies create uncertainty for predicting financial results in US dollars. To enhance the brand further by taking advantage of all the assets across the organization globally, including both electronics and environment. Sony’s PlayStation Network and Sony Online Entertainment services were hacked and personal data of more than 100 million accounts was stolen and the service was unavailable for weeks until it was recently partially restored (The cyberattack cost an estimated $170 million in damages).

Competitive Risk

Sony must deal with the bargaining power of some suppliers, bargaining power of customers, the threat of new entry, the competitiveness and the threat of alternative service products. Although Sony is trying to differentiate their products through modern design, high quality graphics and superior technology. They still have Ipod as alternatives to Sony Walkman, iPad or Android or tablet games that threaten Sony PlayStation and DVD as alternative to Blu-ray. Alternatives like music downloads or streaming media will have an impact on Sony’s recorded music industry.

Sony and ERICSSON

The Sony G-TYPE recorder (tape player or recorder) was the first hardware device created by Ibuka and Morita in 1950, and the first pocket-transistor radio was released in 1957. In order to penetrate the global market, they introduced the image quality of Trinitron TV in 1968. Ericsson was founded in 1876 by Lars Magnus and began to manufacture mobile phones with potential technological improvements that shape the future of mobile and broadband Internet communications. Ericsson is the only company in the world to provide systems for all major mobile communication standards, actively promoting standardization and delivering innovative solutions in more than 140 countries.

Ericsson used to buy chips from a single source from Philips. In 1999, due to the interruption of the fire in Philips, it was unable to provide chips, and Ericsson had to face huge losses. Sony is a fringe player in the global mobile phone market, with a share of less than 1% in 2000. Sony Ericsson’s joint venture began on October 1, 2001, and the main goal of the joint venture is to develop an alliance that allows Ericsson to reduce the cost of expensive development of the next generation of mobile phones. Ericsson has also successfully innovated cheap camera phones, cross-platform technology, operating system experiments and colour screens. After 2007, due to the rise of smartphones on the market, the company’s feature phones gradually lost market, and the company’s operations slipped into the slump. After half a year of negotiations, on October 27, 2011, two parent companies, Sony and Ericsson, reached an agreement. Sony paid Ericsson 1.50 billion euros ($1.47 billion). The former bought Sony Ericsson from Ericsson. On October 27, 2011, Sony announced that it will acquire 50% of Sony Ericsson’s shares held by Ericsson for 1.05 billion euros. Sony Ericsson becomes a wholly-owned subsidiary of Sony. The transaction was completed in February 2012 and Sony Ericsson was renamed Sony Mobile.

The word ‘Sony Ericsson’ has ceased to exist. The original 50% of Sony Ericsson shares in the past 10 years have also officially returned to Sony. The mobile phone series product was named ‘Sony Mobile’, and the mobile phone logo produced in the future was also changed to ‘SONY’. On February 15, 2012, the Sony mobile communication subsidiary was established, and Sony Ericsson was officially out of the market. After Ericsson exited the mobile terminal business, it focused on 2G, 3G and 4G mobile communication networks and professional services in the communications market.

New Models

The first device introduced by the Sony Ericsson brand is the T68i, which includes a colour screen, a connectable camera and an email function. The new products feature digital photography and multimedia capabilities (download, view video clips and personal information management features). In 2003, it introduced the iconic T610, the first model to include a built-in camera. In 2005, Sony promoted its brand through K750 devices including Cyber-shot camera technology. Ericsson effectively provides hardware, and Sony can use its technology and exclusive products to help itself stand out from competitors’ manufacturers. In 2007, shipments reached an all-time high of $103 million each year. In 2008, sales fell to 96 million, Sony Ericsson has been too focused on high-end mobile phones, and was affected by failure to keep up with competitors, highlighting HTC, the Apple iPhone launched in 2007 and Google’s Android accounted for its share of sales.

A few days ago, Sony Ericsson officially said that the Ice Cream Sandwich operating system, Android 4.0 version, will start to log in to XPERIA smartphones in mid-March and late March 2012. The world’s first V phone Xperia arc S LT18i.

Sony Ericsson released the latest performance Android 2.3.4 smart new Xperia arc S LT18i at the International Electronics Show (IFA) in Berlin, Germany. As the flagship new Xperia series, the Xperia arc S LT18i not only inherits the award-winning design of the Xperia arc LT15i, but also features a high-speed processor upgraded to 1.4GHz. At the same time, it is advanced with Sony Exmor R for Mobile image sensor and 3D panoramic scanning. The outstanding performance of video technology, Xperia arc S LT18i was awarded the ‘2011-2012 European Best Camera Phone’ award by the European Video Association (EISA). Xperia arc S LT18i continues the appearance of Xperia arc LT15i won the 2011 Germany Red Dot 2011 ‘slim design, the thinnest part of the fuselage is only 8.7mm, coupled with arc arc, add The three colours of white, pink and black, upgrade the fashion taste; under the refined appearance, the high-speed processor upgraded to 1.4GHz speeds up the mobile phone in the start-up camera mode, media and application conversion by 25%, and the web browsing growth rate is also high. 20%. In conjunction with the leading Android 2.3.4 smart operating system, the Xperia arc S LT18i will fully enhance the consumer’s mobile connected life experience.

The Xperia arc S LT18i combines Sony’s high-end imaging technology to provide users with an optimized entertainment experience: the multi-touch Reality Display with 4.2-inch, Sony Mobile BRAVIA Engine image processing engine, perfect for beautiful images and videos; Sony xLOUD enhanced speakers, superior audio effects; 8.1-megapixel camera with HD recording and Sony Exmor R image sensor for clear shooting in low-light environments; 3D panoramic scanning for users to break space constraints, shooting Have fun in it.

Start Over

In June 2008, it launched a £756 million cost-cutting plan, and by the end of 2010, about 8,000 employees were laid off. Cutting costs has helped the company build a platform. Mobile World Congress 2011 – Return to the Black Economy – Android is a major factor. Sony launched the Xperia series, which is available from Android, including the Xperia X10, Mini Pro, Vivaz Pro, the game-centric PlayStation-certified phone Xperia Play and more Sony brands such as its camera sensor Exmor R and image processor Bravia engine. In 2011, it differentiated its market. However, after the loss of £37 million in the second quarter results report, its problems reappeared and were attributed to the impact of the earthquake in Japan, which caused four locations to close and stop production. Shipments fell by 11 million to 7.6 million year-on-yea. Many of their production centres and research and development centres around the world. Closed, they had to cut off about 3,000 employees. Sony decided to acquire Ericsson’s shares at Sony Ericsson’s price as a subsidiary of Sony Electronics. Therefore, Sony Ericsson became Sony Mobile Communications.

Foreign Exchange Risk

Sony’s electronic business, R&D and headquarters management fees are mainly calculated in Japanese yen, and manufacturing costs (including material costs, parts procurement costs, and outsourcing manufacturing service costs) are mainly from the US dollar and the Japanese yen. Derivatives, foreign exchange forward contracts, foreign currency option contracts are used to mitigate the effects of fluctuations in foreign currency exchange rates and expected cash flows from intercompany transactions. London’s Sony Global Treasury Services (‘SGTS’) hedges the net foreign exchange exposure of Sony and its subsidiaries.

The SGTS typically forecasts an expected risk exposure for the three months prior to the actual transaction. However, in some cases, SGTS will partially hedge the expected risk exposure one month before the actual transaction occurs when certain products are produced with a shortened production-sales cycle. Sony’s foreign exchange transactions with third-party financial institutions are mainly for hedging purposes. Minimize the adverse effects of foreign exchange fluctuations on their financial performance, especially in the electronics sector. Sony seeks to localize materials and parts procurement, design and manufacturing operations outside of Japan. Changes in fair value of derivatives designated as cash flow hedges (including foreign exchange forward contracts and foreign currency option contracts) are initially recorded in accumulated other comprehensive income and reclassified as profit when the hedged trade affects revenue. It shows the electronic manufacturing facilities of Sony all over the world.

Drawbacks

Sony does not offer premium phones like other competitors in the mobile phone manufacturing industry. They research and development is very slow. If the R&D department is not up-to-date, it means that you are not providing satisfactory products to your customers. They offer innovative products, but marketing strategies are not as effective as attracting customers. They faced problems because they focused on cost-cutting plans and unemployment. In June 2008, they had 12,000 employees. After the launch of this cost-cutting plan, the number of employees worldwide decreased by about 8,000. In 2008, Sony’s quality problems were mainly concentrated on notebook products. The motherboard of the Sony FZ35 laptop is exploding with. Sony’s CR series notebooks produced since January 2008 have been accused of short-lived phenomenon. Network received several complaints about the Sony T20 digital camera in the country, and ‘starting inexplicable jitter’ became the complaint keyword.

Conclusion

R&D is an important part of any organization and it plays an important role in mobile phone manufacturing companies, but Sony Ericsson used it as a cost and closed R&D department. Companies must seek to innovate and implement new marketing strategies to provide customers with a satisfying product and raise awareness. Equally important, we should also know that customers always want new and different things. Therefore, to provide them with new and different mobile phones, the companies should always seek the best R&D tools and technologies. Sony mainly concentrated on high end handsets which includes attachable camera, Cyber-shot camera technology, built-in camera and other technology, instead it should have focused equally on technology and operating system as well for a better development of the joint venture.

Sources

https://en.wikipedia.org/wiki/Sonywww.sony.com
https://www.quora.com/Why-did-the-Sony-Ericsson-co-venture-fail
https://www.ukessays.com/essays/business/history-of-sony-ericsson.php
https://www.mobilenewscwp.co.uk/2011/08/18/is-it-time-for-sony-to-ditch-ericsson/

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