Category: Sony

Reasons for Joint Ventures

According to Thompson (2011, p. 5), a joint venture is a corporate strategy that a company seeks to improve profits through increasing sales and involves entering new markets and production of new products. A joint venture can occur outside or inside the business unit. There are many reasons that can make a company adopt this form of diversification. The company seeking for a joint venture makes decisions based on the need to create economies of scale, improve financial performance, increase market power, improve profit stability, and accelerate growth. A company takes advantage of differences in geographical distances, sharing of information, improvement in technology and innovation, ability to share costs, ability to share learning and experience, and brand name to improve its performance in sales and profits.

Joint ventures have helped companies take advantage of opportunities in the market with reduced costs and with fast effectiveness in profits and sales. A joint venture can also fail to achieve business objectives. A joint venture increases risks of investing resources when the corporate strategy fails. Managers should take time to understand customers and the market before a making decision on forming a joint venture. The company must allocate managers strong enough to deal with the divaricating strategy, decide on the control over the business, and evaluate the strength of the company to engage in such a venture. It must also take time to analyze and understand the risks involved before committing time, finances, and other resources in the venture (Thompson 2011, p.9).

Introduction to Sony Ericsson Mobile Communication

A collaboration occurs when two or more partners or parties decide to work together to achieve a specific goal that would not be achieved by a party. Sony and Ericsson are two multinational companies that decided to form a collaboration to become Sony Ericsson in 2001. Sony is a multinational producer in the world of consumer electronic goods based in Japan. The company specializes in the production of entertainment, electronic, financial services, and games sector. The company has more than 180,000 employees globally. The company has a vision of exploring the opportunities created by its unique business models. Masaru Ibuka and Akio Morita founded the company in 1946. The company has a strong connection and value with the corporate and national culture creating high chances of succeeding in the target markets (Sandstrom 2009, p.16).

Ericsson is a company based in Sweden. The company is the global leader in the mobile phone company offering services and solutions to major mobile phone standards and producing telecommunication equipments. The company operates in 175 countries with more than 78,740 employees. The vision of the company is to rely on perseverance, respect, and professionalism to create a culture of value. Sony Ericsson combines innovative applications and powerful technologies to offer music, mobile imaging, entertainment, and communications. The global markets recognize the company for devices of multimedia that include accessories, phones rich in features, M2M solutions, and PC cards.

Sony Ericsson has become a strong brand with a variety of market opportunities for desirable fun user products and mobile operators. The company has undertaken major investments in product development, sales, marketing, research, customer services, and distribution. The company operates from London whereas the R&D is in France, Sweden, India, Netherlands, China, Japan, the United Kingdom, and the United States. The company operates the Creative Design Centre (CDC) from London, Sweden, Japan, Asia, and the United States (Luna 2001, p. 20).

Reasons for Sony Ericsson’s Joint Venture

The companies’ main reasons to work together were to achieve a sustainable competitive advantage and growth. The two companies wanted to penetrate into the cell phone markets and compete effectively with the rivals based on their competitive advantages on state of art design and technology. Sony and Ericsson shared the same mutual interest as they both faced difficulties in competing efficiently with their rivals in the cell phone market. The companies had high levels of interdependence as Sony had renowned designs with high levels of innovativeness and Ericsson had a strong reputation in application of the latest and finest technology in telecommunication. Sony Ericsson could easily achieve their marketing objectives because they relied on each other’s competences and expertise in technology and design, in which the fields are the key success factors in the cell phone market (Sandstrom 2009, p. 24).

Sony and Ericsson engaged in the cell phone business before deciding to form collaboration but could not compete in the competitive market. Forming the collaboration was an effort to overcome the market situation and to eliminate the monopoly enjoyed by their competitors. By them working together, they would be able to manufacture and design cell phones that attracted customers from their competitors and maintain the existing ones across the world. In the late 1990s, Ericsson invited Sony to form collaboration. The two companies had possession of valuable resources but faced difficulties in making their different cultures and working environments compatible. To overcome this challenge, the companies decided to establish their new company in a neutral location. The companies settled on the United Kingdom and contributed resources equally toward the establishment of the new business venture (Luna 2001, p. 26).

Impact of the Joint Venture to Sony Ericsson in Competing Effectively in the Marketplace

The company began operations with 3500 employees globally with 1000 from Sony and 2500 from Ericsson. The company has developed the potential of employing more than 180000 employees (Luna 2001, p. 27). Sony Ericsson invested most of its resources in product distribution, development, sales, research, customer service, and marketing to achieve its strategic goals. The combination of its expertise in technology and design build distinctive competences in the market providing the company with a strong brand image and name in the global market. This has improved the organizational and corporate culture of value enhancing the potential in meeting the goals of the joint venture.

The company wanted to create a third generation handset with high data intensity. The company has succeeded in launching new models targeting their mission on the mid-level and entry-level segments. It uses the production facilities in the parent companies but manage the production operations under a unified brand. Sony Ericsson uses competences in technology and design to offers a variety of products that satisfy customer needs and wants in multimedia and cell phone handsets and services. The company aims to achieve what it would not achieve on their own. They supplement each other in the strength of their brand image, value, and name (Sandstrom 2009, p. 28).

Sony Ericsson will aim at maximizing profits and sales through dominating its target markets. This includes attraction of more than 12% market share in the target markets in the short run. The company achieved this goal in year 2000 where it acquired a global market share of 12% yielding approximately $7.2 billion. Sony Ericsson failed to improve and maintain the market share because of high competition from its competitors and in 2002, it lost market share to 5.6% and profits to $2.6 billion. The company decided to invest additional capital in 2003 to overcome the losses. The company reduced reliance on the mobile phones and focused on providing multimedia and digital photography. The company released a 2-megapixel, 5-megapixel, and 12-megapixel and K750i camera and W800i, UIQ 3, the P990 and Sony Ericsson C905 phones with the capability of two low-end phones with playback of 30 hours (Harper & Swenson 2010, p. 1). The company has grown in the market with the GSM color-screen camera phones and 3G handsets. The company has successful attracted and maintained customers with preference of multimedia capable phones and the joint venture has created attention for quality and unique multimedia mobile phones (Luna 2001, p. 28).

The company sponsored a variety of sports activities adding good image and reputation on the global markets. Sony Ericsson sponsors the WTA Tour leading to the renaming of the sport team to Sony Ericsson WTA Tour in 2005. Sony Ericsson established a subsidiary in India in 2007, which manufactured more than 10 million mobile phones as at 2009. The company succeeded in attracting more than 105 million customers of the GSM mobile phones. The company could take advantage of the business opportunity and compete for customers in the fast growing India markets for mobile phones. The sales volume of handsets fell in 2011 from 30.8 million to 8.1 million because of the introduction of Google’s android and Apple’s iPhone by its competitors. This was a difficult moment for the joint venture as the profits had fallen earlier in 2008 by 43% because of the launch of LG Electronics by its competitors from South Korea (Harper & Swenson 2010, p.2).

The company restructured its business because of the decline in sales and increased competition from rivals. The company discontinued approximately 5000 employees cutting about 1500 jobs in 2010. It closed down some of the underperforming R&D in the United Kingdom and the United States and UIQ centers in Budapest and London. In 2012, the joint venture ended as Sony acquired Sony Ericsson at a cost of £1.054 billion changing the name to Sony Mobile Communications. Sony Mobile Communications uses the expertise acquired from the joint venture to create smart phones. The smart phones attract a large market share and profits and the company has improved its global image in the mobile phone industry. Some of the popular smart phones are the Sony Xperia Smartphones (Harper & Swenson 2010, p. 3).

Conclusion

Joint venture is a good market strategy, and it has built the basis for Sony Ericsson’s global recognition. Sony Ericsson entered into joint ventures to increase growth and sustainability of competitive advantage in the competitive market of mobile phones. The joint venture strengthened their technological and design expertise to offer consumers with well-featured headsets. The company is at the top five global leaders in the mobile phone industry. The company is facing stiff competition but the joint venture creates potential for proving new and improved products to consumers. The efforts of the company in outperforming the mobile phone industry in the joint venture failed and led to looses. The joint venture ended in 2012 and Sony purchased Sony Ericsson to become Sony Mobile Communications. Sony Mobile Communications used the expertise acquired from the joint venture to develop. This means that joint ventures are risky concerning emulation of technology, knowledge, and expertise.

List of References

Harper, E & Swenson, T 2010, “Smartphone wars”, Novell Connection, vol.21, no.5, pp. 1-3.

Luna, L 2001, “High hopes”, Telephony, vol.240, no.18, pp. 20-28.

Sandstrom, G 2009, “Sony Ericsson bets on high end: Handset maker hopes new premium phones will revive sagging sales”, Wall Street Journal, vol.1, no.1, pp.16-34.

Thompson, A 2011, Crafting and executing strategy: the quest for competitive advantage: concepts and cases, McGraw-Hill Companies, New York.

Introduction

Sony is a Japan-based international corporation that produces electronics and provides entertainment and financial services. Established in 1946 by Akio Morita and Masaru Ibuka, it succeeded as a part of Sony Groups that also includes Sony Pictures, Sony Music, Sony Interactive Entertainment, et cetera (Green, 2017). While the performance of Sony began in Tokyo, it covers a lot of countries worldwide today due to the opportunities provided by globalization processes. In order to remain competitive, the company forms joint ventures, sells its activities, and restructures the branches and divisions. The chairman, Kaz Hirai, and President and CEO, Kenichiro Yoshida, are the two main people who identify the company’s course of development. The ownership structure consists of institutional holdings allocated to holders, who cannot lead the company, yet Yoshida and Hirai should respond to them about their actions.

This paper will focus on how Yoshida took a new perspective on leading the company and making it successful based on the range of the previous solutions regarding the company’s strategy. This CEO freed Sony from the production of Vaio laptops and returned the corporation to profitability (Inagaki & Barber, 2018). It should be stressed that Yoshida is not a traditional Japanese leader since contrary to all widely accepted strategies, he criticizes the previous management of the company for not adapting Sony to the changing electronics market. In particular, the paper will discuss why such strategies as focus on innovations and content prioritization were declared by Yoshida as the key components of the integral decision. Currently, one may observe the first positive results of the mentioned solution, which are evident through reduced costs and increased interest of customers and partners. More to the point, the stakeholders tend to support this decision due to its consistency with the contemporary market development trends.

The structure of the essay is organized chronologically to follow the factors that contributed to the target solution. First of all, the way Sony was introduced will be examined to understand its initial mission. Second, it seems also essential to determine the external environment factors that promoted the decision of Yoshida, which will be conducted in the context of the stakeholder theory, focusing on the connection with the interested parties and taking their needs and expectations into account. Third, the internal environment will be analyzed based on the constructs of the institutional theory. The social and cultural aspects that played a decisive role in the historical success of the company are to be identified and interpreted. Ultimately, the concluding part will summarise the key points and answer the question of how Sony adopted the identified solution.

Factors that Affected Yoshida’s Decision

Early Steps and the Raise of Sony

Sony created the transistor radio after World War II, which soon was spread across the globe due to its popularity. The leadership of Akio Morita allowed the company to remain ahead of technological progress, and its leaders devoted most of their work to come up with ways to utilize the achievements for the benefit of all people. Inspired by the idea of creating new markets, Sony played the role of a pioneer and occupied the leading position in the sector of consumer electronics (Frynas & Mellahi, 2015). There are few technology companies that have a comparable success story. At this period, the company’s management used about 85 percent of the time to the issues associated with research and development, 10 percent to staff, and only the remaining 5 percent to finance (Frynas & Mellahi, 2015). For Akio Morita, the financial results were the results of hard work on the creation of new products and the formation of new markets. It was believed that in case Sony handled well with its main task, the results will be consistent. Thus, it is clear that the initial developmental course taken by Morita and Ibuka was closely associated with innovations, which were given much less attention in the future years.

External Environment Factors

One of the key persons who affected the target decision was Edward Deming. The prominent Japanese quality control system was introduced by this expert who was not known in his own country until his ideas of quality control had such a huge impact on Sony. The Americans realized the significance of the statements of this scholar but did not treat them with the same seriousness as the Japanese. In fact, the Deming Prize for quality is one of the highest awards that a Japanese company can receive. In the 1950s, Deming persuaded the leaders of the company to concentrate on producing goods faster, better, and cheaper – he promoted the ideas of industrialization (Kar, 2017). In other words, the initiative of the rapid and massive increase in production was declared pivotal. The higher the quality of the product, the fewer maintenance problems will occur. It should be stated that all of the discussed events and actions occurred in the headquarters of Sony – Tokyo, Japan.

The review of the relevant sources shows that such obsession improved quality yet left the leaders of Japanese business with fewer skills to develop and apply innovation in any other field. Over time, Sony tended to pay less attention to the development of industrial products, forgetting the idea to create new markets (Moskowitz, 2016). For example, even though Vaio computers were of exceptional quality, they almost did not use new technologies. When the company had to get involved in severe competition with, HP, Dell, and Lenovo, its success began to depend on the game to reduce the cost/price of the production of computers, but not on the development of new designs. One should point out the fact that Sony has deliberately developed a clearly industrialized strategy focused on the processes and production volumes, instead of trying to create something unique.

In 2012, led by Stringer, Sony has entered into a partnership with Ericsson, subsequently buying it entirely (Noam, 2018). Again, customers did not observe any new technologies or attempts to create a device that stands out from the rivals. Instead, Sony has focused on increasing the volume of production along with the circumvention of the products of Nokia, Motorola, and Samsung with regard to price and functionality (Merrin, 2017). With no consumer or technological advantage, Samsung left Sony with its industrial strategy far behind due to lower costs. This shows that the preference was given to volumes intentionally as a way to maximize profit and saturate the market.

According to the stakeholder theory, a company is not only economic integrity and a tool for making a profit but also an element of the environment in which it operates. Namely, it is a system that influences and is influenced by its environment, including local communities, consumers, suppliers, public organizations, staff, investors, and shareholders (Freeman & Moutchnik, 2013). The first method of the identified theory that is used by Sony is to establish partnerships with stakeholders (Fernando & Lawrence, 2014). An important goal of this method is to build such relationships so that it is more profitable for the stakeholder to act in the interests of the company since in this case it also reaches its own interests. Yoshida considers that Sony should make better use of its user data in order to create content that best suits their preferences (Kodama & Shibata, 2015). This proximity to users is regarded as the way to survive. Therefore, Sony will not close PlayStation Vou, the Internet streaming television service.

In the context of the stakeholder theory, the concept of shared values ​​can be defined as policies and operational practices that enhance the competitiveness of a particular company (Hörisch, Freeman, & Schaltegger, 2014). At the same time, it strives to improve the economic and social conditions of related communities. Creating shared values ​​focuses specifically on situational identification as well as expanding and strengthening the links between social and economic progress (Kodama & Shibata, 2015). Since previously the volume and price reduction were the main goals, innovations lacked necessary attention purposefully as they were not assigned a top priority.

Today, Yoshida attempts to preserve its quality and introduce innovations to build a business around communities of interest arising among gamers, film fans, and music lovers (Figure 1 shows that quality remains essential for Sony). For instance, the largest community is the Sony PlayStation Network. The CEO believes that the data on 80 million players need to be better analyzed in order to create content that best matches the interests of the audience (Thilk, 2018). A recent example of such a hit is the success of the new Spider-Man for the PlayStation 4, which was released on September 7 and for three days sold a record circulation of 3.3 million copies. By approximate calculations, Spider-Verse film collected $30-35 million (Thilk, 2018). Thus, it is evident that the decision to target customers was dictated by the need to better understand what they need and adjust innovations accordingly.

Internal Environment Factors

The institutional theory of organizations implies that they are social structures with a certain degree of resilience. There are social, cultural, cognitive, and regulative components of the theory that specify how one or another decision was taken. It should be emphasized that the main insight of the institutional theory refers to imitation as organizations tend to look at their competitors to make solutions instead of practicing a rational approach. Overall, cultural and cognitive explanations are most appropriate to understand Sony’s decision. In consistent with this theory, Yoshida observed other companies and found that such giants as Apple or Google always target innovations and adjustment of their products. Partially, the CEO focused on his decision since the company was lacking for many years.

In 2016, headed by Kazuo Hirai, an ex-CEO, Sony entered the new frontier of competitiveness by launching Blu-Ray technology to the market, its strategy remained the same. First of all, it aimed at finding a way to sell as many devices as possible working in a new format (Pope, 2012). Therefore, the company did not sell Blu-Ray technology to anyone. Similarly, it behaved in the market of audio files by developing its own audio encoding format that was applicable only to devices manufactured by Sony. In the conditions of the information economy, this approach could not suit consumers, and Blu-Ray turned out to be an unprofitable undertaking, uninteresting to the market, and the same fate awaited the now closed series of digital Sony players (Pope, 2012). One may observe such a situation in almost all areas of the company’s business. For example, in the production of televisions, Sony has lost its technological advantage that was achieved due to the launch of Trinitron CRT. In the segment of flat-panel devices, Sony applied its industrial strategy, trying to beat the competition by increasing volumes and reducing costs with predictably dismal results.

The situation started to change before Yoshida – under the leadership of Morita in the 1990s, the development of new products was at the forefront, and the tactics of the industrial age were used to reduce costs. However, Sony executive, Stringer who came to the company in 2009 was trained differently: to implement an industrial strategy. In his perspective, new products and markets occupied a subordinate place. They were convinced that if Sony would have sufficiently high gross figures and would be able to sufficiently reduce costs, sooner or later the victory in the competition would be ensured to it. By 2010, Sony had reached the climax of this strategy, putting the company at the head of a non-Japanese leader (Dhillon & Gupta, 2015). Stringer earned his reputation as the head of Sony’s American subsidiary, who, in perfect agreement with the letter of the industrial strategy, reduced the 30,000-strong staff of the company to 9,000 (Hartung, 2012). For Stringer, Sony’s mainstream development course was neither innovation, nor technology, nor new products and markets.

In Stringer’s version, an industrial strategy meant obsession with cost reduction. While Morita’s management meetings were 85 percent dedicated to innovation and market-based technology, Stringer brought a modern approach to Sony (Velez-Castrillon & Angert, 2015). It should be stressed that Sony’s leadership was driven in strict accordance with MBA success recipes of the 1960s. By focusing on a specific limited range of products to increase production volumes and trying to avoid the costly development of technological innovations in favor of mass production, he strived to achieve the reduction of costs. The increase in the service life of the product and equipment was also dictated by MBA value systems of that time (Velez-Castrillon & Angert, 2015). That is why during Stringer’s short stay at the head of Sony, the company did not create a single new product.

In 2012, when Kazuo Hirai replaced Stringer as the CEO of Sony, the corporation suffered losses for four years in a row. However, competing in costs with countries where labor is cheaper than Japanese, Sony turned out to be daunting, and Forbs called people to sell stocks of Sony, yet it proved to be wrong (Hartung, 2012). Hirai returned Yoshida to Sony and made him a finance director. In 2012–2018, Sony’s shares have risen in price three times, and the corporation has returned to the top ten most expensive companies in Japan. The operating profit for the 2017/18 fiscal year increased 2.5 times to a record 734.9 billion yen ($ 6.72 billion) (Inagaki, 2017). This shows that the decision to employ innovations as the driving force of future actions is effective. In terms of the institutional theory, the previous leaders of the company tried to use traditional and industrial strategies that now seem to be outdated.

As it can be viewed from the provided above analysis, all the actions initiated by Sony leaders were deliberate and planned. The key factors were associated with the social and cultural constructs that specified their actions and beliefs. It is noteworthy that Yoshida’s approach to innovations is caused by his commitment to the Japanese approach to exceptional quality and also by his creative application of the global production culture inspired by new technology (Graph 1 and Graph 2).

A vivid example of the need for internal cooperation is the project of a self-driving car, which is engaged by a group of Sony engineers who previously developed smartphones. Yoshida assures that this project was not started up for the sake of creating a car but to evoke passion in employees and keep talents (Nakamura, 2019). In addition, Sony would like to occupy a niche manufacturer of entertainment systems for cars and supplier of image sensors (Iwato, 2018). The production of the latter sharply increased after the appearance of the trend for smartphones with two cameras.

Conclusion

To conclude, this paper explored the factors that led the current CEO and President of Sony to take the decision that focuses on innovations, content prioritization, and the stop in the production of Vaio computers. Based on the chronologic presentation of the events, it was revealed that the Japanese brand became interested in reducing costs and increasing production volumes while the development of new technologies was not considered important. Even though such an approach was effective for the 20th century, it seems to be outdated today. The mentioned statement identifies the key reason for the target decision that allowed Sony to survive the crisis and become successful again.

References

Dhillon, I., & Gupta, S. (2015). Organizational restructuring and collaborative creativity: The case of Microsoft and Sony. IUP Journal of Business Strategy, 12(1), 53-65.

Fernando, S., & Lawrence, S. (2014). A theoretical framework for CSR practices: Integrating legitimacy theory, stakeholder theory and institutional theory. Journal of Theoretical Accounting Research, 10(1), 149-178.

Freeman, E., & Moutchnik, A. (2013). Stakeholder management and CSR: Questions and answers. uwf UmweltWirtschaftsForum, 21(1-2), 5-9.

Frynas, J. G., & Mellahi, K. (2015). Global strategic management (3rd ed.). New York, NY: Oxford University Press, USA.

Green, S. (2017). Sony. Minneapolis, MN: Bellwether Media.

Hartung, A. (2012). Sayonara Sony: How industrial, MBA-style leadership killed a once great company.Forbes. Web.

Hörisch, J., Freeman, R. E., & Schaltegger, S. (2014). Applying stakeholder theory in sustainability management: Links, similarities, dissimilarities, and a conceptual framework. Organization & Environment, 27(4), 328-346.

Inagaki, K. (2017). Sony forecasts its highest profits in 20 years.Financial Times. Web.

Inagaki, K., & Barber, L. (2018). Sony chief vows recovery is no false dawn.Financial Times. Web.

Iwato, H. (2018). New Sony chief sets goals beyond the horizon.Nikkei Asian Review. Web.

Kar, S. (2017). Total quality management and its applications for business growth. Globsyn Management Journal, 11(1/2), 55-58.

Kodama, F., & Shibata, T. (2015). Demand articulation in the open-innovation paradigm. Journal of Open Innovation: Technology, Market, and Complexity, 1(1), 2-23.

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Moskowitz, S. L. (2016). Advanced materials innovation: Managing global technology in the 21st century. New York, NY: John Wiley & Sons.

Nakamura, Y. (2019). Sony opens up internal startup program to anyone with an idea.Bloomberg. Web.

Noam, E. M. (2018). Managing media and digital organizations. New York, NY: Palgrave Macmillan.

Pope, S. (2012). Sony’s blues caused By Blu-ray.Forbes. Web.

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Thilk, C. (2018). Sony’s focus on diversity in ‘Spider-Verse’ marketing reanimates Spider-Man.The Hollywood Reporter. Web.

Velez-Castrillon, S., & Angert, C. (2015). How Sony got its groove back: A case study in turnaround management. Business Education Innovation Journal, 7(2), 144-154.

Introduction

Sony is a Japanese company that specializes in consumer electronics, which accounts for about six percent of the market share. The company also operates in foreign countries like the Japan, Spain, United Kingdom and Canada.

The company has numerous stores in the United States, Spain, United Kingdom and Canada. It has in the past decade experienced significant growth, enabling it to maintain its position in the competitive market.

The company has a large and diversified team of workers who are drawn from all walks of life.

Culture at Sony and Human Resource Policy

Sony as a company stands on a very strong foundation, which has its roots from the organizational culture. The company is actually strong in terms of its objectives, principles, policies and values that are widely held; whereby all of them are clear, in addition, it is held strongly by its members, particularly the founders.

Consequently, this defines the success story of the organization, which keeps on burning in the heart of every worker. The workers are encouraged to participate sufficiently and work together.

The employees are free to bring out their ideas. Nevertheless, it is in this state that the company is in a position of regenerating, thus facilitating or enhancing its effectiveness.

The development of human resources is one of the most important parts of the human resource policy in the company.

The human resource development policy of Sony is to develop its employees by ensuring that they are properly trained so as to keep them acquainted with the latest technology and skills in order to make them competent in meeting the current market demands (Karmar, p.92).

Local Training

Each and every factory of the company has its own residential training programs whereby the employees are trained in order to be able to meet their particular needs.

The biggest part or percentage of the employees at the company receive local training in their respective countries, whereby the training programs are designed specifically to meet the set standards as well as the demands of the particular countries.

The programs run every years and the duration taken by an employee in completing his or her training program depends on the course that he or she is taking.

In addition, we find that it is the responsibility of the institution to ensure that programs and policies help in the continuing of staff.

The workers in the organization should take the initiative of assessing interests and skills and seek activities of development that are compatible with their needs; they should work together to establish development and training objectivities.

Many programs of employee training and development fall under the categories of Career Development; Professional Skills; Management Development; Basic Skills and Supervisory Skills.

International Training

Even though the company mainly prefers local training as the best way of developing the expertise and proficiency of its employees, we find that this has been substantially enhanced by the International Training Center that is located in the corporate headquarters of the company in Tokyo, Japan.

Since its inception, the International Training center has always brought together managers and aspiring managers, providing them with training that meets the international standards of the profession.

Perhaps this is what has enabled the company to grow to the level it is currently, since the managers of all the branches in different countries across the world have sufficient knowledge and expertise that is not only limited to their respective or particular regions, but of internal and general standards.

The employees attend classes in accordance with the manager’s wishes, even though their qualifications also matter. A typical class is composed of twenty to thirty nationalities. There are several courses provided which can be divided into two broad groups:

Management Courses take about sixty percent at the training center. Those who take these courses must be within the company for a period of no less than five years time, whereby they are trained in appreciating the real values of the company together with business approaches.

Executive courses are classes that usually have individuals who attended management courses about five to ten years before. Here, they are trained on how to be in a position of representing the company internationally and working with foreigners, whereby they stress on the analysis of the industry (Fleetwood, & Hesket, p.63).

Conclusion

The main objective of the company is to ensure that each and every employee is given the opportunity of maximizing his or her potential and ability.

Sony does not only do this for the benefit of the employees but also for its own benefit, since in this current competitive world, whereby technology has reached great heights, it is important that employees are knowledgeable about the latest skills so as to enhance their productivity, thus making the company remain relevant in the industry as well as remain in the driving seat.

Training also enables the employees to gain much experience and knowledge that would enable them to get promotions within the company.

The enhancement of this virtuous circle is the ultimate objective of their training efforts at several various levels via many programs of training running every year.

Works Cited

Fleetwood, Steve, and Anthony Hesketh. Understanding the Performance of Human Resources, Cambridge, 2009. Print

Karmar, Ray., et al, Human Resource Management in Australia-strategy, people, Performance, (4th ed.), Sydney: McGraw-Hill (chapter1 and 5) 2011. Print

Klikauer, Thomas, Critical Management Ethics, Basingstoke (UK): Palgrave. 2010. Print

Sparrow, Paul. Handbook of International Human resource Management: Integrating People, Process and Context. Chichester: Wiley. 2009. Print

Abstract

Sony Corporation was not afraid to embrace change. In fact, the company was proactive when it comes to implementing change, hoping to guide a successful organization into the 21^st century.

The moves made were radical considering the fact that the company’s core business was in manufacture of consumer electronics goods and yet it acquired Columbia Pictures and CBS Records.

From the point of view of change management, the company leadership did everything right in securing the cooperation of various stakeholders even when it was clear to many that Sony was in uncharted waters.

The acquisition of a movie company and a recording company was difficult to justify, however, Sony was able to pull it through.

Finally, change was implemented but at the end Sony realized that the commitment to implement change is not enough, it is also crucial to apply due diligence to figure out the long-term effect of a strategic move.

Introduction

In the decade of the 80’s and 90’s there was an electronic gadget that was ubiquitous from Tokyo to New York. It was none other than the Sony Walkman. At the same time household from Asia, Europe and America were entertained using a Sony Television set and the most popular model was the Sony Trinitron.

The once humble and unknown Japanese electronics company has taken the world by storm and was one of the most profitable corporations in the 20^th century.

They key to their success was innovation, specifically the creation of miniaturized and portable music machines as well as cutting-edge technology that powered their TV set. Music lovers used their Walkman to enjoy music whenever and wherever they want to listen to their favorite songs.

At the same time TV viewers were delighted with the picture quality of the company’s Sony Trinitron TV set.

Needless to say, Sony became the undisputed leader in consumer electronics and was considered a savvy innovator with a knack for knowing what the people really wanted when it comes to consumer electronic goods (Nathan, 1999, p.10).

However, change management was not the strongest suit of the company’s corporate leaders during the latter part of the 20^th century. It was difficult to change something that was profitable for a long time.

The corporate leaders at Sony made the decision to expand its presence in the United States and set their sights on the U.S. entertainment industry.

The company tried to change but the attempt failed (Tabuchi, 2012). The corporate leaders and major investors at the Sony Corporation must think long and hard on how to implement an effective change management program that could help the company succeed in the 21^st century.

Literature Review

Sony was a small Japanese firm when it started but after a few decades, it became a household name due to its innovative electronic products. Phenomenal is the best word to describe the impact of the Sony Walkman and the Sony Trinitron TV.

The company was a leader when it comes to revenue, innovation, and mass appeal. Sony endeared itself to countless millions around the world with a parade of electronic products that are both cutting edge and practical (Nathan, 1999).

The company charged ahead and made daring moves to expand its manufacturing capability to meet soaring demand. Sony Corporation decided to expand and trained its sights on the lucrative U.S. entertainment industry. The decision to buy a film studio was a major leap for the electronics company.

The move could be considered as an extreme example of integration wherein one company tries to control every aspect of the business. For example, a restaurant purchased a farm so that everything that it needs in the kitchen is sourced from this farm.

Nonetheless, it does not require an expert in business management to know that this type of integration does not work all the time. Most of the time it is best to work with suppliers; for instance, manufacturing firms buy components from other firms.

In the case of Sony the purchase of a movie company cannot be considered integration because there is a huge divide between a television set and the movies that are viewed through it. The business decision was mind boggling because the acquisition of Columbia Pictures is not even remotely related to the electronics business.

However, corporate leaders of the company believed it was the right move.

Richard Lynch explained their decision through this remark: “The strategic logic here was that of developing a vertically integrated company – from the service that develops the pictures and music to the machines that deliver them in individual’s homes” (2006, p.207).

Richard Lynch’s explanation made sense however, it is difficult to comprehend how vertical integration could be achieved because those who purchased Sony Trinitron TV are not compelled to buy movies that were produced by Columbia Pictures.

Therefore, when Sony purchased Columbia it was a business transaction that benefited Columbia Pictures but it did nothing to improve the sales of Sony’s electronic products.

Fig.1. Financial Year 2012 Results by Segment (Sony Group, 2013).

Consider for instance the original name of the company; it was called the Tokyo Telecommunications Engineering Corporation.

Therefore, Ibuka and other pioneers laid the business framework that future leaders should follow. It was a statement that the identity of the organization was bound up in technology and hardware. However, decades later, Sony was in the business of making movies.

In order to have a clear picture on how far the company has deviated from its core business, consider the information gleaned from a case study of Sony Corporation, specifically the circumstances that surrounded the deal to acquire Columbia Pictures:

On September 24, 1989, Sony … bid $3.4 billion in cash for Columbia Pictures Entertainment Inc. It was the highest bid ever by a Japanese company for any U.S. property. In addition to the cash price, the Japanese electronics giant assumed nearly $2 billion in debt and contractual obligations (Spar, 2003, p. 368).

Aside from Columbia Pictures, Sony also invested in the purchase of CBS Records. All of a sudden Richard Lynch’s explanation made sense, Sony wanted to produce the music that people would listen to with their Walkman.

Immediately after the acquisition of the said movie company and the music recording company, the financial situation at Sony began to change from bad to worse.

In the early part of the 1990s, problems began to crop up, specifically in relation to the acquisition of CBS Records and Columbia Pictures. Consider the highlights below (Spar, 2003, p. 378):

1. 1990 – Columbia Pictures Entertainment suffered negative cash flow
2. 1991 – the combined cash flow of Sony Pictures and Sony Music turned negative
3. 1992 – In the third quarter alone, announced a 37% decline in operating income
4. 1993 – The film Last Action Hero a $60 million production, bombed at the box office

It did not take long before the executives and shareholders realized that the creation of Sony Music and Sony Pictures was an ill-advised move.

The negative cash flow and the failure to realize their objectives were unacceptable to the shareholders and therefore a major change needed to be initiated in order to bring back Sony Corporation to the top of the list of the most profitable company in the world.

The changes that were made right after the dismal performance of the company shook the foundation of Sony. In fact the core leadership and most probably the board of directors were compelled to hire an American to become the company’s first ever CEO.

Several years later a commentary was written with regards to the historic move, “Sony Corporation of Japan did something almost unheard of in Japanese business circles.

It appointed a Welsh-born American citizen as head of the Japanese company” (Lynch, 2006, p. 107). A message was sent and it reverberated all over the world.

Michiyo Nakamoto, made the revelation that the crisis surfaced as early as April of 2003 and she added that at the same year, “…Sony revealed a sharp deterioration in its electronics business and weak mobile phone sales.

It launched a costly overhaul to regain its competitive edge. Yet barely halfway through that three year exercise Sony is again faltering” (2005).

Richard Lynch on the other hand made a complimentary analysis that supported Nakamoto’s observation and he wrote that Sony’s woes could be the result of the following: a) threat from low-wage labor manufacturing and b) shifting away from innovative products e.g. liquid crystal display (LCD) screens (20006, p. 108).

It was made clear that the former CEOs of Sony dreamt of making a great deal of money by venturing into the entertainment industry while at the same time prodded the other half of the company to manufacture and sell consumer electronic goods.

The juggling act did not work and there was no evidence to show that the firm accomplished vertical integration.

The company that was once known for its innovative technology made wrong assumptions when it comes to the future of music and TV technology.

Thus, the company was caught flat-footed in the fast transition to new technologies. Therefore, “Sony, which had not invested in manufacturing LCD panels, was forced to buy them from competitors”

(Nakamoto, 2005, p.12). This episode in Sony’s history helps explain the sudden rise to prominence of a Korean electronics company called Samsung. Needless to say, it was late in the game when the company realized that it was betting on the wrong technology.

Their problems could be traced back to the day they purchased Columbia Pictures and CBS Records. The rush to consolidate in the guise of vertical integration was a major blunder in company history.

For example, CBS Records was in the business of producing music and therefore, it placed the company in bind because it could not invest in a technology that could store music in a digital format. During that time no one knew how to handle the thorny issue of copyright infringement and digital music files.

In fact, Sony’s corporate leaders were adamant to “discourage the electronics division from marketing a portable player that could download music from the Internet” (Nakamoto, 2005, p.14). It was also the same time period when the Steve Jobs and his team were poised to change the world with their Ipod.

Sony had the resources and the technological capabilities to develop a device similar to iPod, however, all plans related to its development were considered taboo because of CBS Records.

It is important to point out that two major changes were made in the latter part of the 20^th century. First, there was a rush to create vertical integration and second, there was the radical move to hire an American CEO to drastically alter the fortunes of the ailing company.

However, it is also important to point out the theoretical frameworks needed to understand the change process.

There are at least four major categories of change and these are: 1) Evolutionary; 2) Dialectics; 3) Life Cycle; and Teleological. Evolutionary change is a continuous cycle of variation, retention, and selection that could result in gradual or radical change (Sengupta & Bhattacharya, 2006, p.5).

The dialectic theory of change on the other hand talks about the “existence in a pluralistic world of ambiguous and contradictory forces and values that compete with one another to get control over the others” (Sengupta & Bhattacharya, 2006, p.5).

However, the life cycle theory of change proposes that there is a “linear and irreversible sequence of prescribed stages, which facilitates organization to move from the point of departure towards an end,” (Sengupta & Bhattacharya, 2006, p.5).

Finally, the teleological theory talks about the company’s “interaction with the external and internal construct and its effort to reach the defined goals” (Sengupta & Bhattacharya, 2006, p.5).

It is important to point out that the change made at Sony Corporation is described more effectively using a combination of the dialectics and teleological theory of change.

Fig.2. Sony Corporation’s Net Income 2008-2012 (Statista, 2012).

Analysis of the Research Findings

There were two major changes made in the latter part of the 20^th century. First, Sony decided to expand and acquired CBS Records and Columbia Pictures. It could be argued that the dialectics and teleological theory of change is applicable in this instance.

With regards to the dialectics theory, the company was pressured to expand because at that time the company needed to sustain its growth. With funds at its disposable due to the phenomenal success of Sony Walkman and Sony Trinitron, the organization needed to invest in something that would ensure long-term growth.

In the dialectics framework there is pressure from competing forces and it could be argue that during this period Sony was wary of its rivals within the consumer electronics industry. Thus, there was the need to take the first step and there was the pressure to break away from the pack and take the lead in the race.

The teleological framework is also applicable in this instance because the company made goals to increase its profitability and ensure its position as the best consumer electronics company in the world.

Thus, the company decided that there is no other way to do it other than to increase its efficiency by creating synergy with other companies or other business partners. The decision was to establish vertical integration.

The stakeholders involved were the corporate leaders at Sony Corporation, CBS Records, and Columbia Picture. The other major stakeholders were the shareholders of the respective companies as well as the employees and customers of the three organizations.

With regards to the first major change that was made, the company must be commended when it comes to the preparation made and the actual activities that were geared towards making the change. The major stakeholders were aware of the decision and they fully supported the move.

The integration of CBS Records and Columbia Pictures into Sony Corporation was completed without a major glitch.

The change process was completed, however, this case study points out another major component of change and that is the decision-making process that was made prior to the goal of creating vertical integration. In the long run it was proven to be a costly mistake.

It is important to point out that the changes that were made were not the result of a life cycle process. In other words, it was not something that the leaders considered as inevitable. They made radical changes to the company because of the perception of competing forces and the fear of obsolescence.

In other words the company was eager to stay relevant and was more than eager to sustain its phenomenal growth. It is acceptable to make the conclusion that the company overreached and tried to do something that the organization was not built to handle.

The second major change was to overhaul the company’s management process by hiring an outsider. Needless to say it was not easy to get a unanimous vote to hire an American CEO.

An overview of Japanese history and culture, as well as an in-depth look at their management techniques would reveal that the Japanese people are almost fanatical in the way they value loyalty and raising up leaders and managers from the ground up.

Hiring an outsider who did not have a deep understanding of the company’s history was not a popular choice. However, the decision was made to deal with consequences of the Columbia Pictures and CBS Records fiasco.

The hiring of an American CEO is not an example of a life cycle type of change. In other words, it was not part of the natural growth and development of the company to hire an American business leader.

Thus, the change that was made was totally out of character. The change framework applicable is dialectics and teleological because the company responded to external pressure and made the decision to change.

The decision to hire an American CEO did not result in radical changes, such as, the sale of Sony Pictures and Sony Music.

It could be argued that the purpose of the hiring may have been to appease investors and to show stakeholders that Sony was trying its best to mitigate the impact of the decision to acquire two companies that struggled to make a profit.

Conclusion and Recommendation

The financial and business related problems of Sony Corporation are important reminders that organizational transformation must be top priority of the company.

The phenomenal growth of the company from a fledgling electronics consumer company in Japan to a world-leader in miniaturized music equipment to cutting-edge TV technology and its near collapse is proof that change must be constant. It is therefore critical to understand the nature of change.

Thus, business leaders must be grateful that thinkers and analysts were able to determine four broad categories of change management frameworks. Although there four major frameworks only two are applicable in the case of Sony’s change management process.

The dialectical and teleological frameworks could explain why Sony was compelled to make changes. These two frameworks focused on external and internal forces that created pressure for a firm to make the necessary changes to adapt. As a consequence Sony Corporation was compelled to make radical changes.

It is therefore imperative to point out that Sony did not wait for changes in the outside world to overtake them and render the organization obsolete. In fact, the company adopted a more proactive approach.

Other companies fail to embrace change. Sony did not fear change, however, the change management process that they adopted required a second look. The turning point was the decision to adopt vertical integration. Without a doubt leaders of various industries believe in the importance of vertical integration.

The purpose of vertical integration is to create a more cost-efficient operation. Moreover, the strategy was also implemented to significantly increase Sony’s market share when it comes to their portable music devices.

It is not clear however, how the leaders were able to connect a music recording company to a portable music device like Sony’s Walkman.

It is difficult to understand how someone could make the assumption that the purchase of Sony equipment would compel consumers to buy files, data, or software from the same organization.

For example, a car manufacturer is not expected to create their own tires because consumers have the freedom to choose the best brand.

There are so many things to consider when it comes to the purchase of ancillary items. Consumers base their decision on price, quality, and even the convenience of purchasing a particular item.

The justification to acquire CBS Records on the pretext of vertical integration requires a stretch of the imagination.

However, there seems to be no justification for the purchase of Columbia Pictures because Sony’s Trinitron does not operate using film from the movie studio. Therefore, it is hard to understand where vertical integration could be inserted in this particular business deal.

Executives at Sony must realize that the eagerness to anticipate change and the commitment to change are not enough to succeed. It is important to pursue due diligence in thinking through the decision process. For instance, the two companies struggled with billions of dollars in debts.

Secondly, there was no clear plan how Sony could transform a financial liability like Columbia Pictures into a cash cow. Furthermore, they purchased CBS Records at a time when music studios were losing money because of digital music files.

Sony Corporation must also reconsider how the company interpreted vertical integration. Even a small business firm understands that it is not prudent to integrate everything into the company’s supply chain. It is best to focus on their strengths and establish business partnerships to help them deal with their weaknesses.

The change process must not only focus on the need to change in the present time, it must also focus on the long-term and immediate effects of the changes that were made. A comprehensive feasibility study should have been included in the change management process.

Finally, Sony should rediscover its roots and remember that the company rose to prominence because of innovation and not the acquisition of other companies.

References

Lynch, R 2006, Shaking up Sony: restoring the profits and the innovative fire, Indiana University Press, Indiana.

Nakamoto, M 2005, Caught in its own trap: Sony battle to make headway in the networked world, Financial Times, London.

Nathan, J 1999, Sony: the private life, Houghton Mifflin Company, New York.

Sengupta, N, & Bhattacharya, M 2006, Managing change in organizations, New Jersey, Prentice Hall.

Sony Group, 2013, Financial year 2012 results by segment. Web.

Spar, D 2003, Managing international trade and investment, Imperial College Press, London.

Statista 2012, Sony’s net income from 2008 to 2012 (in 100 million Japanese Yen/million U.S. dollars). Web.

Tabuchi, H 2012, Sony revises expected loss to $6.4 billion. Web.

Executive Summary

Recent technological developments have continued to take the world by storm since the invention of the computer and its follow-ups. In the world of technology, however, technological innovations and changing consumer demands in various markets are responsible for keeping marketers on their toes as competition is cutthroat. One of the companies that have dominated the field of electronics and technological innovations is Sony. This is more of a reflection of a savvy marketing and strategic marketing position via vertical integration rather than a significant technical advantage.

The dominance has had its low moments with the electronics powerhouse opting out of some fields due to the high levels of competition evident in this field as demonstrated by the emergence of very many companies especially in the Asian ”tiger” economies whose economic and technological advancements is supersonic. This company was recently embroiled in a marketing war with Nintendo Wii in the marketing of their computer games Play Station 3 and the ”Wii” which went as far as to the courts. Again the corporation was caught in another battle with their other rivals Toshiba in the marketing of their high definition technologies, a war that Sony won. In light of this matter, the corporation has sought the services of a consultancy firm to analyze its competitiveness with their major rivals Panasonic Electronics on the marketing of their LCD plasma television sets.

Introduction

Company history

Sony is a Japanese-based multinational conglomerate corporation one of the largest in the media conglomerates of the world with total revenue of over $82 billion as per the close of their 2007 financial year report. The corporation started in 1945 after the 2^nd World War as a radio repair shop operated by one Masru Imuka. After a year he was joined by a partner Akio Morita hence a change of name to Tokyo Tsushin Kogyo K. K. which translate to Tokyo Engineering Telecommunications Engineering Corporation and changed its name to Sony Corporation in 1958. As of today, the company is better known as Sony. Currently, the corporation has opened up many branches across the world under CEO Sir Howard Stringer, a British businessman. The corporation’s portfolio is diverse through its five operating segments – electronics (65% of revenues), games (19 %), entertainment (motion pictures and music) (8%), financial services (5%), and other electronic segments (3%). These make Sony one of the most comprehensive and relevant entertainment companies in the world.

The introduction of the LCD technology in the world of entertainment has raised the standards of screen viewership with high color quality and definition expected with the coming of this product.

The corporation is now faced with the increased market share of Panasonic in the plasma TV segment at its expense. Apart from being low priced the company is looking at other ways through which Panasonic is using to attract the market share that it has in such a short while obtained such a significant share. A new approach to the market is required hence the need to carry out a self-analysis study that will help to reposition the electronics giant to its rightful marketplace after rectifying the problems that seem to ail the company at the moment concerning the performance of its plasma brands.

This paper here is an analysis of the situation as it is at the moment in regards to the particular brand of product in the market.

Industry overview

Many companies have entered the market of manufacturing high definition television though not many of them have mad4e any impact on the market. Most of the companies involved in the selling of this technology are Sony, Samsung, Dell, Hitachi, JVC, LG, Mitsubishi, Panasonic, Pioneer, Phillips,

Situation Analysis

At the moment television viewership has registered tremendous growth as facilitated by the increase in the number and affordability of the brands in the market. Many companies and especially in China have continued to make replica counterfeit sets that claim to be Sony-supported. With the co-operation of government and more consumer enlightenment, this problem is well in its decline. One of the most highly expanding markets in Africa where availability of TV was very low some years back. The economic growth of some of these countries is spurring growth in other industries thereby providing much-needed employment and as a result, increasing the consumer’s purchasing power. Panasonic has also noticed the potential growth in this market thereby investing heavily in it. Regional offices and distribution channels have been set up. This analysis sought to project the performance of Sony’s Bravia brand against Panasonic’s Viera brand of which both are high definition. There is a lot of anxiety in Sony and Panasonic and other firms electronics firms also regarding market responses towards the withdrawal of Toshiba in this category of high definition. Both are relatively similar in their major features with the major differences being in the pricing and the physical appearance.

One of the best ways forward is a carrying out a comprehensive SWOT analysis test to obtain the best information on the company’s position in the market and its chances of flooring its biggest rival a fete that feels within rich following the big win over Toshiba.

PEST Analysis

Political environment

• Government tax policy on electronic imports
• Foreign trade regulations, quotas, and trade agreements
• Attitudes towards monopolies and competition.

Environmental factors

• Important for all companies projecting growth and expansion
• Member of Climate Savers Program
• Formulated the Sony Group Environmental Vision
• Unified environmental management system based on ISO: 14001 standards
• Products focused on efficient use of resources, minimal radioactivity, and content management
• In February 2007 Sony became the first consumer electronics company to be awarded the Sustainable Energy Europe Award by the European Commission
• Reduction of negative environmental impact by Sony facilities

Social-cultural factors

• Sony involved with the program ”For The Next Generation” focused on the protection of a sustainable future society
• Participation in charitable foundations in America and an Employee Volunteering program to help local communities.
• Operating in Africa as an important potential market for Sony. Is disposable income enough to still cater for top-notch television sets considered a luxury by many? The economy is still growing strong, mainly because of consumers having personal disposable income on their hands as a result of a rise in employment levels. Latest gadgets and envy for their neighbors’ giant TV screens have seen consumers borrowing against their houses and taking personal loans to buy more household items for their homes. Today’s society does not have as much access as it had in 2007 and earlier years to credit for discretionary consumption due to lack of salary security.

Technological factors

• Downloadable Content as a threat.
• Sony is diversified within the technology industry
• The constant evolution of technology in this sector. A good look at Bravia you think that’s the climax innovation in television but check the market six months from now.
• Price cutting is pulling consumer electronics profit margins per unit lower and lower. Two years ago, a flat-screen television set did cost $5,000-$10,000 but have dropped to $1,000. Profits for consumer electronics continue to rise defiantly because consumers appear to have more disposable income to spend.

Sony’s Five Forces Analysis; Bravia vs. Viera

Power of suppliers:

• The products are meant for high income earning consumers
• Product is limited and is offered through strategic alliances.

Power of buyers:

• Strategic relationships with content owners are critical.
• High bargaining powers of the consumers

Barriers to entry:

• Limited content supply
• Established marketing positions.
• Proprietary Technology
• Capital
• Political instability

The Threat of Substitutes:

• Counterfeit cheap replicas from China and other middle east countries such as Taiwan
• Low-cost models from competitors

Competitive rivalry

Among the many competitors in this field, there is no one single company that boasts of complete market monopoly hence all have to compete for the limited market share available to them all.

In this paper, concentration is on the major player’s in the market.

The figure below is a summary of the five forces analysis in relation to Sony and Panasonic.

Sony’s Strengths and Opportunities

Dominance

Undoubtedly, the settlement of the battle between Sony and Toshiba will allow Sony to consolidate its dominance in the physical delivery of media content through industry and market standardization from now until the market reaches a complete maturity stage given that I will uphold its competitiveness.

Platform

Having been able to launch and maintain the blue-ray format in the market without scarifying profits to gain market share, will give Sony a head start of making this product a profit platform to invest in maintaining its leading edge in the entertainment industry. After winning the format battle with Toshiba, Sony enters almost into a blue ocean scenario, and it will allow it to get prepared for the red ocean scenario if decides to enter the market of media content delivery through the internet.

The Sony Bravia boasts of the following features

• Slim fit that minimizes space occupied
• Enhanced visual and aural clarity
• Precise color reproduction
• Live color creation
• Smooth color transition
• High connectivity as enabled by the HDMI input
• Has a PC input enabling it to double up as a computer monitor
• User-friendly screen and remote control
• Has a wide viewing degree of 178 degrees to enable clear viewing from any angle
• Quick response time
• Integrated digital tuner
• Astounding stereo sound to match the spectacular visuals

Sony’s Winning Strategies

The bowing out of Toshiba in this market was the result of creative strategic marketing activities. The most significant of these are as follows:

1. The early vertical integration into the world of clear imaging with a move to invest in major Hollywood studio’s long before other competitors had a clue
2. The development of a sound technological platform.
3. The strategic use of existing Sony brands, such as the inclusion of Blu-ray technology in the popular PS3 video game has strengthened the brand further.
4. The development of critical strategic alliances with not only the major Hollywood movie studios in America and Nollywood in Nigeria but also industry powerhouses such as Wal-mart, Apple, and Dell.
5. The disciplined retention of Blu-ray brand value without budging to the pressure of licensing Chinese manufacturers for mass production or under-valuing dedicated Bravia players at the consumer level.

Considering all of the above factors, the most critical was Sony’s ability to capture the attention and allegiance of major industry players such as distributors’ promotion companies. It was Toshiba’s lack of a keen eye that saw them lose the opportunity to negotiate these alliances that would inevitability turn the tide of momentum towards Blu-ray. Although Sony may not have been considering this specific strategic issue to apply the same way for Panasonic and its Viera, it has positioned Sony in partnerships with the major movie studios and helped the management to have a positive attitude in their fight for market share with Panasonic.

Sony: Future Outlook, Future Strategies

Although the war with Toshiba may be over, a lot of time was wasted fighting it out in the marketplace that other competitors such AS Panasonic were left unattended thus making a considerable market penetration to the disadvantage of Sony. In this industry, day and age of fast adapting companies with highly innovative products, it is only a matter of time before a new and better product enters the market as proven by the replacement of VCR by DVD’s and MP4’s and now CD’s are being replaced by microchips in the MP3’s and the iPod. As noted in Porter’s 5 forces analysis, the threat of substitutions, from Chinese counterfeit replicas is the greatest hurdle so far as they are cheap. This threat is further heightened by the fact that though Africa’s working population is projected to have realized an increase in the amount of disposable income available to them, this assumption has not stood the test of time.

Several factors are pushing consumers to embrace purely digital ownership of High Definition Plasma television sets. These include,

1. The desire to watch multiple formats, and which are multiple devices compatible
2. The development of improved DRM (Digital Rights Management) tools,
3. The normalization of music downloading, and
4. The iconic brand and pop culture following the company’s long presence in the market and maintaining the same level of quality.

Competition

The company has already identified the competitor to look out for. Among the many competitors in the field, some have remained adamant in their search for a significant market share. It thus happens that the problem that remains unsolved is identifying the strong selling points that give Sony a run for its money. A good analysis of the competitor’s strong point gives a lot of valuable information in developing and coming up with the best ways to counter that competition.

Panasonic Electrical

The company is also Japanese-based. It was started in 1918 by Konosuke Matsushita at the age of 22 as a socket and bulb-making enterprise going by the name of Matsushita Electric Devices Manufacturing Works. This was a case of pure talent as the young man had no formal education whatsoever. Now that business was picking up and Konosuke had money to invest, he rented a two-story home, thereby establishing Matsushita Electric Devices Manufacturing Works on the first floor.

With this larger workshop, Konosuke was able to hire more hands and expand his production to include an innovative attachment plug and a two-way socket, both of which he designed himself.

These new products proved immensely popular, earning the company a reputation for high quality at low prices. And by 1922, Konosuke had to build a new factory and office to house his growing business. The company, under the leadership of its founder, is credited with very many innovations such as the electrical bicycle lamp, the 1927’s super iron among many. The company continued to expand its line of products to include dry batteries, synthetic resins, cables, etc. In managing this portfolio, Konosuke introduced the autonomous management system to help in running his expanding company by dividing the company into divisions. By the time Sony Corporation was being founded in 1945, Panasonic was manufacturing over 200 products both electrical and nonelectrical. With the invention of the brand “National”, the company was experiencing double-digit growth annually. The diversity in Panasonic’s product range has ensured that the revenues are comparable to Sony’s. In their annual report in March 2006, Panasonic had consolidated net sales of US$76.02 billion against Sony’s net sales of US$64 billion for the same period. This shows that Panasonic is financially superior to Sony something that the company should be wary of since the expansion of Panasonic is very unlikely to be hit by financial glitches something that may be a real problem to Sony.

With such a long experience it is expected that the company can utilize its long-standing position in this market to its advantage which leaves Sony at a disadvantage. However, the company has not been ken top market its products based on this assumption. The coming of the Viera in the market has seen the company’s sales improve to a record high.

The Viera boasts of the following features:

• One-touch control of all Panasonic high definition components
• On-screen menu
• SD memory and slot
• 1080P screen resolution
• Display panels have anti-image retention technology
• Crisp motion with ultra-fast switching from one station to another
• Effective customer care with free chat online

The concierge program that donates 5% of any Panasonic purchase to an Eco-conscious charity. Panasonic has managed to operate a notch higher than Sony because Panasonic has a wide of products that are doing well than other competitors in the

Panasonic has also managed to tame the competitiveness of Sony by concentrating on the areas where Sony seems to be shying away from. at the moment this is best explained by Sony’s involvement in the financial services market. However, Panasonic is concentrating on the production of TV panels, DVDs, and cameras. On the other hand, both have focused their attention on other forms of entertainment provision by investing in-flight entertainment for Panasonic through the Panasonic Avionics Corporation and Sony’s acquisition of CBS Records.

Panasonic’s Threats and weaknesses

The comparisons between these two companies have been carried out widely as these two are the major market players. At some point, Panasonic failures in some of its products have been highlighted here and there thus if Sony is anything but serious should make the best attempts to capitalize on the failings of its main competitor.

Hitachi

The company was founded by Namihei Odairo as an electrical repair shop in Japan in 1910. They came into the limelight after making their first products which were three 3.6775kW electric motors. Growth was imminent in the company that was highlighted with the manufacture of a large scale computer in 1990 that had the highest processing speed by then. The company had a very wide range of products that at one time it was thought to be a vehicle manufacturing unit as displayed by the 1993 bullet train the first of its kind with a maximum speed of 270kmph.In the same way, as Panasonic had done, Hitachi introduced its system of managing its portfolios called ”hard real-time management technology”. The company’s products are trusted by many due to the high rate of innovation a trademark of the company matched by no other. To cap it on this company’s success its pioneering in many fields has won many consumers in an unfounded belief that the newest original technology is with Hitachi while others are just copycats.

Implementation/Recommendations

Work on a downward movement on the prices without comprising on the quality to increase competitiveness.

Careful and phased expansion in Africa due to the volatile political situation in the region.

An alternative source of funding to the expansion plan should be sought.

Mergers should be made with some relevant and potential organizations in Sony’s financial services to help the organization in focusing its management, financial, and personnel capabilities in the manufacturing of electronics segment only. This induces specialization resulting in greater innovations and efficiency in the workplace.

The design of the Bravia should be altered to give it a more different physical appearance from the Viera and other competitors.

The company should be stricter in the handling of the trademark rules defrauders and other unlicensed producers of Sony products.

Conclusion

The company has a very great influence and presence in the electronics market and its products are used as a measure of the standard to other brands from other companies in the market. However, the greatest hurdle to the company is the efficiency of a downward price revision without compromising on quality. With such a strong brand name in the market, it is expected that any Sony-branded electronic equipment in the stores will perform well

Citations

http://www.marketingteacher.com/Lessons/lesson_fivefoces.htm (2008)

seekingalpha.com/article/44996-sony-s-new-budget-lcd-line-to-compete-directly-with-less-popular-brands

Introduction

The Sony Corporation deals in financial services, entertainment, game, and electronics. Sony is a world-leading manufacturer of audio, video, information and communication technology products with its capital in Tokyo, Japan (Sony Global – About Sony Group, n.d.). The Company has many subsidiaries in different countries worldwide, and it has unique products that contain exciting multimedia content.

For example, Sony Europe is a subsidiary of the Sony Corporation that deals in managing, developing, and supplying electronic products across Europe. The Company believes in exploring new areas to create new ideas in order to enhance human lives through technology. Moreover, it strives to develop a wide range of products and multimedia services that provide customers with a wide range of product choice.

It has tailored its products like televisions, portable audio and digital imaging equipment towards the customers’ viewpoints or perspectives. In this manner, Sony Europe has been endeavoring to maintain market leadership in the electronic field.

Historically, Sony is known for its quality and innovative products such as the first transistor radio of 1955, Trinitron color television in 1968 and play station 3 of 2006 (Sony Global – About Sony Group, n.d.).

These products went on to hit the consumer and professional market thus winning the company international recognition as a global company. In Middle East and Africa, Sony selected Jebel Ali Freeport Zone as its regional head quarters. This station serves over 40 countries within the expansive region.

Since its launch in 1992, the company has commanded a huge share of the market in all sectors of its different businesses. For example, during the 2007 financial year, Sony Gulf announced a turnover of $1 billion. The Company executes large sales, advertising, and marketing across its many partners in Kenya, Pakistan, and Saudi Arabia.

In line with the financial target that was announced in 2012, Sony plans to attain a sales volume of over 8.0 trillion yen at an income margin of over 5% and return on equity of 10% for the entire Sony Corporation by FY14. Explicitly, the electronic business targets a sales volume of 6 trillion yen at an operating margin of over 4.5% during the same financial year.

Sony Television

In 2012, Sony bounced back onto the TV scene with a new design of the HX853 series that worn multiple awards on the television business (Archer, 2013). The liquid crystal display (LCD) television has grabbed a controlling share in the present global and dynamic world market. Initially, the company had been facing competition rivalry from the South Korean Samsung Electronics Company and LG Electronics International.

The Company has initiated a strategy of producing unique and quality products in the market. Coupled with high innovative ideas, the Sony Corporation has been able to gain competitive advantage over its competitors that produce and supply television sets.

In the 2012 financial year, the company was able to build a strong foundation and strategic investment plan for the TV business. Some of the exceptional features that Sony televisions have include the ability to playback wide collection of photos and music from USB products; these distinct features have given Sony a competitive edge over the perennial competitors in the market. These are the common features of Smart TV.

Smart TV also has social media sites like Twitter, You Tube, Picasa, and Facebook. This television model is also able to stream several video platforms through its online platforms. Some of the video highlights include Netflix and Lovefilm, BBC iPlayer, BBC sport, and Sky News. Sony 55W905A is another model that has a remote that functions with a special android application.

The remote uses the Near-Field Communications (NFC) technology; therefore, one can strike the remote on an NFC-portable device like the Xperia smartphones to mirror the screen of the device on the TV. Moreover, the current Sony televisions take close to 10ms for the signals to arrive at the inputs; it is a unique feature that the company has added in their televisions.

In addition, it recorded momentous advancement on the line of high profit margins in the TV business. This path to profitability on TV business has remained among the core strategies in this 2013 financial year. Some of the features that the company has added in their new TV models are the “X-Reality PRO” which is an engine that process images and “Triluminos Display” which makes the screens to display wide color.

In addition to enhancing the quality of the display and image, the company is targeting to expand its 4K LCD TV lineup (Sony Corporate Strategy Meeting FY2013, 2013). Sony plans to capture and control the emerging markets by producing and supplying TVs that meet the customers’ needs. Further, it plans to reduce the operational and fixed costs in order to register more sales than before hence returning to profitability in FY13.

Logistics strategy

Sony Corporation produces television models, which are durable; therefore, it has modified a cost-effective distribution strategy that ensures that the products are available in local markets at the right quantity. In the Indian market, Sony uses one level conduit of distributing products where customers purchase the TV sets from recognized Sony dealers who obtain the products directly from the company.

On the other aspect, the current development in technology has forced the Company to use the internet as a way that customers can acquire information on Sony retailers and their locations. Sony has joined the international television divisions in producing programs that command a worldwide appeal since globalization has reshaped the cultural, social, political, and economic parameters of all societies.

The globalization process has altered people’s experiences on entertainment hence changing the market demand. These changes have also made Sony collaborate with local companies in developing a subscription business model. This model enables consumers to acquire information on the products before purchasing them.

The Company intends to expand the TV business in all its regional markets worldwide as a means of realigning its business portfolio with the supply chain strategy (Ford, 2011). For example, Sony targets India in developing its television production and television network due to its rapid market growth.

Sony in a bid to sell its TV aligns its supply chain strategy, marketing strategy, finance strategy and human resource strategy in a specified direction in order to form the overall business strategy.

The Company believes that effective management and strong creative decisions are the essential cornerstones it requires in strengthening its foundation and place as a chief actor in the electronic field. In line with realigning its business portfolio and optimizing resources on the television business, Sony has finished transferring the small and medium-sized LCD business to an external agent.

A clear supply chain strategy improves customer service, increases profits, and continues to minimize the reduced costs of production and operation. Evidently, a right logistics strategy facilitates achievements of business goals by engaging the management team in meeting the strategic objectives of a firm.

The Sony Corporation has also set clear its logistics strategy; for instance, it decided to reduce the number of materials and parts that suppliers gave the company in 2010 (Ford, 2011). This approach assisted Sony in cutting the production costs of the electronic products in order to regain control of the market that had been so competitive in the previous year.

The dynamic and evolving logistics strategy of the Sony Corporation lowered the cost of products’ distribution in the long-term perspective. The Company delegates sales to selected dealers through its selective distribution method. In expansive markets, it employs grey scale marketing strategy, but does not offer benefits for purchasing television sets such as a guarantee and warranty.

Corporate Strategy

Customers

The Company has employed cost-cutting mechanisms in manufacturing the LCD panel. It is still exploring other avenues that can require further production efficiencies to reduce the cost of the television models by over 35%. In addition, it targets to reduce its fixed business costs of the television business by 30% in the 2013 fiscal year.

The Company intends to attract and retain customers using this cost reduction strategy in the market. Sony also intends to increase customers’ receptions on their television sets by advancing the image and quality of audio on these products. Sony studies the needs of different geographic markets in order to produce products that actually meet the needs of the markets.

Notably, the company has made massive steps in developing and commercializing the next generation display units such as OLED. The television business is even integrating with Sony network services and the company’s mobile products in order to provide distinct user services and experiences, and even attract customers on the television lineup.

The Company has also employed strong innovative practices in the television business such that customers can continue to identify its products in the highly competitive and populated market. Sony highly relies on its motto of “make.believe” since it continues to carry out extensive research on what is possible in the television business.

Afterwards, the technocrats and engineers try to put the findings into practice and then take it to the market after believing in its operations. The innovative idea has proved essential since the current market is undergoing fast technological changes.

The President and CEO of Sony Corporation also attested to the harshness of the market and environment in which their television business operates (Sony Corporate Strategy Meeting FY2013, 2013). Therefore, it remains the role of the CEO to reposition the growth and rebuild the entire electronic business in order to contain the stiff competition from its competitors.

Suppliers

In their corporate strategy meeting on April 12, 2012, the company decided to restructure its headquarters and sales groups in order to increase its efficiencies on the management and operational front. In mid-2009, Sony faced stiffer competition than before thus forcing it to take a new approach to address the shift in the competitive landscape.

This problem became a critical supply chain issue in the global market for the Company until the Executive Deputy President Yutaka Nakagawa had to lower the quantity of materials and parts suppliers by over 50% and even had to purchase cost reductions of 20% in FY10.

Nakagawa did this by improving and rationalizing the process of payment terms. The Company employs effective management in dealing with its suppliers in the current unpredicted market through cutting the product suppliers in situations of stiff competition from competitors.

Competitors

In dealing with competitors, Sony has produced a variety of television sets thus enabling customers to have a wide range of product choice to consider during purchases. Some of the television products include BRAVIA TV, Sony KDL-55W905A, and PS3 Sony style (Archer, 2013). In addition, the Company adopted cost-cutting strategies in 2009 in order to out do the competitors in the television business.

The Company had avoided this strategy for along time until in 2009 when the global recession hit the entire market in the previous financial year. For example, the gap in pricing between the 32-inch and 42-inch LCD television is quite narrow, symbolizing a price reduction strategy.

Inventory planning

Inventory planning assists firms to study the demand of their products in the market and decide when to order inventories and the quantity of the new inventories to order. The process enables firms to align their sales and production capacities with their strategic objectives.

Sony has been maintaining close relations with prospective retailers in order to provide them with sales feedback thereby assisting them in analyzing the actual market demand of their products. The Company utilizes the concept of JDA solutions and services in creating scorecards, data that rely on forecasting and exceptional analyses that it shares with its retailers.

These service levels enable Sony to track stored data on a daily basis. As a result, Sony can work with the key retailers in correcting any mismatch that may arise between supply and demand of the television sets. Inventory planning has made Sony experience numerous benefits, some of which include 40% enhancement in the accuracy of forecasting and 18% increment in in-stock levels (Marcus, 2010).

Evidently, inventory planning has enabled Sony to match the supply and demand of its products. On the design process, Sony has gone through evolution since 1960. The design on Sony Walkman attests the real satisfaction of customers’ needs of demanding a lifestyle of music on the go.

Other electronic products like BRAVIA LCD TV models are portable as they are made of LCD Panel. Notably, the Bravia models have large display resolutions of 1,920 dots by 1,080 lines and low power consumption rates.

The KDL-40XBR9 model, for instance, uses 205W, accepts MPEG2, MP3, and JPEG in its USB ports, and consumes less than 0.3W on standby mode (Marcus, 2010). Sony encourages designs that are user friendly in the present evolving world.

Conclusion

The Sony Corporation has diversified its services in many sectors. The television business has revolutionized the entertainment industry. For instance, the X Series-4K TV is a unique model since it is the first TV with the highest and largest picture resolution to be in the market. The model produces premium picture qualities and has extensive features that take entertainment to a new dimension (Archer, 2013).

The Sony Internet TV has also revolutionized the Sony Entertainment Network as people can stream videos on You Tube and chat with friends on the common social media networks like Facebook, Twitter, and Picasa.

References

Archer, J. (2013). Sony KDL-55W905A review | Plasma and lcd tvs Reviews | TechRadar. TechRadar | Technology News and Reviews. Web.

Ford, H. (2011). Sony Television Marketing Management. EzineMark.com: Free Content Online Directory. Web.

Marcus, W. G. (2010). Strategic Analysis on Sony. Scribd. Web.

Sony Corporate Strategy Meeting FY2013. (2013). Sony Global – Sony Global Headquarters. Web.

Sony Global – About Sony Group. (n.d.). Sony Global – Sony Global Headquarters. Web.

Introduction

Mergers and acquisition is one the strategies that many companies are using to help in strengthening their position in the market. Globalization has facilitated this process where companies from any part of the world can easily come together to form a large global corporation. Companies are merging to benefit from capabilities and strengths of each other. This paper analyses a joint venture formed by coming together of Sony Corporation and Ericsson Telecommunication Company.

Historical Background

Sony Ericsson is a global company that was established in 2001 after the merger of Sony Corporation and Ericsson Telecommunication Company. Sony Corporation was a powerhouse for consumer electronics based in Japan and enjoyed a large market share in the global electronics’ market.

On the other hand, Ericsson Telecommunication Company based in Sweden was the market leader in making mobile communications devices. The two corporations were performing well separately but they realized they could do better by coming together to form a merger. As noted by Gorton, Kahl, and Rosen, mergers will be more successful if the companies merging are well established in their industries (1291).

Ericsson was a mobile company that dealt more with software while Sony Corporation mainly dealt with consumer electronics and by forming a joint venture, Sony Ericsson aimed to be the best mobile solution provider. The merger had great impact in the market and the coming together of the companies changed the market share in the mobile market (Chidambaran, John, Shangguan, and Vasudevan 327).

The two companies had just finished making mobile phones on their own and after forming a joint venture, they can now make mobile phones together. The main aim of coming together was to combine the technological leadership of the Ericsson in communication sector with the global skills in marketing of the Sony Corporation. The global management of the company is now based in London though it has many research and development branches based in other regions.

After the merger, Sony Ericsson continued to grow and at the end of 2009, it was ranked the fourth largest mobile phone company in the world behind Nokia, LG, and Samsung. Currently, the corporation employs about 2500 contractors and 9400 employees worldwide. It has six different mobile phone products in the market viz. the Walkman, the cyber-shot, Bravia, UIQ, XPERIA and the Greenheart.

After the merger, Sony Ericsson started registering improved financial performance, which reached its peak in 2007 when the company registered a sale volume of 103.4 million units. However, the sale trend started to decline in the following years with a sale volume of 43.1 million units in 2010.

Market definition

The largest market share Sony Ericsson has achieved since 2001 was in 2009 when the company was placed fourth in the world rankings. Nokia dominates the mobile market with 37.8%, followed by Samsung with 21%, while LG comes third with 11%. However, Sony Ericsson is ranked position one in the Nordic countries where it is followed by Nokia.

In the market, Sony Ericsson mainly concentrates on the following areas, camera, music, business (email and web), all-rounder, design, budget focused, and eco-friendly phones. The six brands (Bravia, UIQ, Xperia, Greenheart, Walkman and cyber-shot) offer all these services in different version. The company uses three methods to name their phone products. The mobile products are named using three, four, or five characters depending the time it is being released in the market.

Type of merger

Mergers and acquisition refers to the process where two or more companies come together to form one unit. Mergers can be friendly where the executives of the merging companies successfully work together to combine the two companies. The merging process can also be hostile where one company successfully buys majority shares in the other company. In the case of Sony Ericsson, the merger was friendly since the executives of two companies successfully combined the two companies in 2001.

The companies realized the potential they had when they combined their synergies and therefore showed the need of forming a merger. Mergers can also be categorized in three ways viz. joint venture, an alliance, or merger and acquisition depending with how the two companies come together. The merger between Sony Corporation and Ericsson Company can be categorized as a joint venture.

In a joint venture, two or more companies come together to accomplish a given economic activity. The two companies came together and decided to be creating units where both make their contribution in shares. This type of venture can be just for one project or it can be a long-term agreement like in the case of Sony Ericsson.

Analysis of the motive

The goal of every company is to increase its market share with the help of its executives. There are many reasons that motivate companies to come together depending with their nature. By coming together, the two companies pool their strengths and capabilities, which give them a competitive advantage in the market. For instance, Sony Corporation was a global leader in selling consumer electronic products while Ericsson was global leader in telecommunication devices.

By forming a joint venture, the two companies combined technological knowhow of the Ericson Telecommunication and the global market skills of the Sony Corporation. The two companies were able to access expertise and knowledge that is more than their own. The companies were mainly forming a joint venture to help them acquire customers and new technologies. Cornett, Mcnutt, and Tehranian indicate that, successful mergers will improve the performance of the new company (1013).

Sony Corporation would benefit by accessing new technology from Ericsson while on the other hand, the Ericsson would benefit by acquiring new customers possessed by the Sony Corporation globally. Another reason why the two companies formed a joint venture was to enable them to benefit from the economies of scale. Both companies were operating globally and therefore, their coming together meant benefits from large economies of scales in their operations.

After merging, most of the objectives of two companies were realized. As Akdogu argues, forming mergers will help to maximize the value of the two companies (83). For almost eight continuous years after the merger in 2001, Sony Ericsson reported increased performance year after another.

The company attained a sale volume of 103.4 million units in 2007, which could not have been attained if the companies never formed a merger. The strengths of the two companies were combined, which could be reflected in the increased financial performance of the Sony Ericsson. This has also contributed to the increased market of the company in the global market. Achievement of fourth position globally in 2009 demonstrated the benefits of forming a merger.

Other possible benefits of merger

The coming together of the two companies has also made possible to compete effectively in the global market. Hitherto, each company had its own advertising strategies but upon merging, these strategies were combined to attract more customers globally. The customer base of the companies was also put together to enable the new corporation to enjoy greater market share. Other benefit that arises from large-scale productions has also contributed to the increased performance of the corporation.

Possible impacts of the market

Since 2008, the competition in the global mobile market has drastically increased thus reducing the market share of Sony Ericsson. The sale volume of the company has also declined in the last two years. Prices of the mobile products are pushed down due to increased competition among the mobile phone manufacturing companies. Thus, the company has to look for other strategies that will help it to regain and increase its market share.

Conclusion

The merger of the Sony Corporation and Ericsson telecommunication company in 2001 has helped to improve the performance of the new corporation. The merger brought together new technology and customers who have helped to increase the market share of the new company.

The two companies have also benefited from economies of scale and combined resources for strategic marketing. However, Sony Ericsson performance has started to decline due to increased pressure in the mobile market, which has pushed the prices down. Thus, it is important for the corporation to look for other strategies to retain and increase its market share but with the heights that the merger has scaled in the past, the probability that it will turn around events and compete effectively in the coming days.

Works Cited

Akdogu, Evrim. “Value-Maximizing Managers, Value-Increasing Mergers, and Overbidding.” Journal of Financial & Quantitative Analysis 46.1 (2011): 83-110.

Chidambaran, Palaniappan, John, Kose, Shangguan, Zhaoyun, and Vasudevan, Gopala. “Hot and cold merger markets.”Review of Quantitative Finance & Accounting 34.3 (2010):327-349. Print.

Cornett, Marcia, Mcnutt, Jamie, and Tehranian, Hassan. “Performance Changes around Bank Mergers: Revenue Enhancements versus Cost Reductions.” Journal of Money, Credit & Banking 38.4 (2006):1013-1050.

Gorton, Gary, Kahl, Mathias, and Rosen, Richard. “Eat or Be Eaten: A Theory of Mergers and Firm Size.” Journal of Finance 64.3 (2009):1291-1344.

Staffing approaches

A number of factors come into play when choosing the appropriate staff for the international subsidiaries of a multinational company. In its former ethnocentric approach, the biggest consideration for Sony was the home country’s authority both in foreign strategy and recruitment.

For the company, most subsidiaries would have Japanese staff in senior positions. Unfortunately, this kind of approach has several disadvantages. One of these disadvantages is applying a foreign culture on foreign employees in these subsidiaries.

A good example of how this failed to work out was in the strike at the Sony manufacturing plant in Indonesia where laborers protested against a policy that had them work while standing.

With a shift from such an approach, the firm could take on a Geocentric approach. This way they will manage to balance the need to transition from their ethnocentric structure which has been seen to cost them in certain situation without necessarily pulling out all Japanese workers.

In using the geocentric approach they stand to gain in a number of ways. They will firstly be able to take advantage of low labour costs by employing their skilled workforce in certain countries e.g. China.

The shift would also allow the company to keep track of their talent management strategies which seeks to maximize the quality of their workforce globally.

The use of their online training software TrainNet will go a long way in ensuring that the communication between the central human resource department at the Japanese headquarters and global staff is robust and steady.

Characteristics to look for in subsidiary managers

Some characteristics that Sony should ensure it looks for are strong communication skills, leadership ability, talented and flexible. The different kinds of culture that the staff will be exposed to will demand an understanding of different people from around the world.

The need to exercise effective communication by both subordinate staff and managers is highly essential to the success of these subsidiaries. Managers will need to show exceptional leadership abilities as they will be forced to deal with employees from a variety of work and educational backgrounds.

The fact that the global approach of recruitment will pool in workers from different parts of the world will mean that these workers need to be able to cope with one another and communicate well. It will be necessary for these managers to equip themselves with sound knowledge and fluency in a variety of languages in this regard.

At the same time there will be a huge need for flexibility as they adapt to new working environments.They might be forced to embrace new living standards. These kind of changes should not interfere with their productivity.

Managing global staff

Sony needs to balance its recruitment policy to ensure an equal opportunity is given to its international pool of workers so as to provides opportunities for training to all applicants and recruits into the company. By doing this they will manage to hire trainees with the best potential of coping with international assignments in future when they advance into managerial positions.

The training mechanism in the company should incorporate a system that allows managers who have excelled in working with subsidiaries to train their incumbents. This will ensure that the skills learned by each generation of managers is transfered to the next generation.

In order to promote global mind sets, the company should attempt to span out its training programs for its new staff to travel to other subsidiary divisions where they can experience a different working environment through actual practice. Managers in the home country should also take opportunities to participate in projects that will require them to travel to regional divisions.

Training

Sony’s training efforts are highly commendable. They have managed to maintain a steady flow of talent from all levels of their organization structure so as to ensure that the company’s objectives and vision are equally shared. Their 2 year program allows their junior staff to get all round exposure to the company ‘s operations.

It also does a good job of equipping them with a variety of skills. Initiating their training progress from such an angle allows them to comes to terms with their strengths and hence gives them a chance to choose the department that best suits them.

The best step Sony could take to improve its training in light of its multi-country operations, is to emulate this program in subsidiary countries. This will obviously demand that subsidiaries are given adequate policy management rights in order to ensure that the training runs smoothly.

The management panels of foreign divisions are best suited to know their recruitment and training needs and hence a strong communication link should be maintain with regards to this effort.

Dealing with labor difficulties

The company could make use of recruitment and HR consultancy firms in subsidiary countries so as to stay in touch with the needs of their staff in future. They could also make use of communication technology to maintain a cohesive relationship with workers in these countries. This will help in addressing problems faced in the workplace quickly and easily.

CSR

Sony’s corporate social responsibility is geared towards better working conditions for the staff in subsidiary countries. What this however means to the firm is that the terms offered to workers have to match up to expectations in the firms operational standards.

The best approach that the company can take is offering more support to workers in developing nations to harness their talents and helping them to acquire skills that were earlier on inaccessible to them e.g. supporting software developing incubation programs. This way they will be able to reserve the best minds in the available workforce in these emerging markets.

Introduction

A product’s life cycle is the series of stages that a product goes through from its inception in the market to eventual decline. These stages are introduction, growth, maturity, and decline, and each stage is associated with distinct market characteristics. This paper analyzes the life cycle of Sony’s digital television, and assesses the product’s financing sources both inside and outside its home country.

Sony Television

Sony Corporation was founded in 1946 and is headquartered in Tokyo, Japan. The company manufactures a wide range of products, including cameras, data storage equipment, computers, computer hardware and software, medical equipment, and home entertainment units. Among these, Sony televisions have reached their maturity. The televisions have been enhanced to have unique features that differentiate them from those of competitors like LG and Samsung. Over time, Sony televisions have been crafted to include Internet TVs, HD Family TVs, LED TVs and 3D TVs. The company has adjusted the prices, distribution patterns and promotion strategies to maintain its share in the market against the competitors (Sony, 2012).

Public and Private Financing of Sony in Japan

Sony Corporation acquires finances from both public and private sources. Private sources include sales and operating revenue and investment in the company by corporate investors as well as individuals. Public sources include bank loans by both the home country banks and international banks located in the country (Turnovsky, Mutti, & Eicher, 2009). The major source of money is the operation and sales revenue. If this revenue is not enough the individual companies using the Sony brand name yet situated in Japan, the companies may borrow from the Sony Bank, one of the affiliate companies.

These financial sources promote the global market of the Sony TV by ensuring that the head quarter from which most consultations take place is running. In this case, money is sought from the international banks which are located in Japan the Sony brand name is promoted (DePamphilis, 2007). The Sony bank, for example, promotes the name to the people it serves both locals and the tourists expanding its global market. The shares sales promote the brand name to both the individual shareholders and the corporate shareholders, such as the parent company, located within Japan through advertising. Other corporate share holders include Japan Trustee Services Bank, Ltd, Moxley and Company, and The Master Trust Bank of Japan.

Optimal Source of Financing

Sony television production is optimally funded through the sales and operating revenue of the Sony Corporation, a private source of revenue (Sony, 2012). The money that is generated through sales is invested in the purchases and operations leading to the production of the product. This financing source may not be appropriate because the quantity of products and the time taken to produce are dependent on the market response of the products. If a product is not doing well in the market its production will be delayed, and improvement on the product to increase its sales will be affected.

Bilateral and Multilateral Financing of Sony Television

Sony television as a product is funded by both bilateral and multilateral financial sources. Bilateral banks are established and operated to serve two countries with common interests (Rix, 1980). Sony Financial Holdings as a bilateral finance source operates in Japan and is open to other countries using the Sony brand name. The multi lateral financial sources include the banks that are funded and operated by many nations with a common interest (Kōzō, 2002). One of the multilateral financiers of Sony is JICA. Sony Financial Holdings promotes the company brand, for it deals with companies outside Japan. Multilateral financial sources promote global investment because they have other branches in other countries.

Optimal Source of Funding

The optimal source of financial funding is the Sony Financial Holdings which funds the companies under it by giving loans under the stipulated conditions (Kōzō, 2002). The performance of the individual groups belonging to this group is monitored by the group and recommendations made where appropriate and necessary. A need for financial assistance and no alarm for poor performance qualify the company to Sony bank for funding. This source of funding is appropriate since adequate auditing is carried out prior to any funding thus ensuring the effectiveness in the operations of the various companies.

Extending the Sony TV’s Life Cycle

Sony as a brand name is spread through out the world with branches and offices in every continent. Sony Television’s market can be extended by targeting the already well performing markets. This will maximize sales and operation revenue used in the product’s production. Such markets include Europe and America where the Sony products have been well received. In order to expand its market the company will need to diversify the products, increase distribution range, manage prices and increase promotion activities (Sony, 2012).

Conclusion

Sony is a brand engages in diversified production of goods and services. Television sets as one of the products that the company offers has reached a maturity stage and thus needs strategies that will ensure it maintains its market position, or better yet improve the market position. Key financers of this product include private sourcing in the home company and bilateral sourcing too. In order to improve the performance of the product, the marketing strategies need to be diversified to attract more customers. Diversification will deal with competition and customer satisfaction leading to better sales. This will not only improve the products performance in the home country but also globally.

References

1. DePamphilis, D. M. (2007). Mergers, acquisitions, and other restructuring activities. Waltham, Massachusetts: Academic Press.
2. Kōzō, K. (2002). The web of power: Japanese and German development cooperation policy. New York, NY: Lexington Books.
3. Rix, A. (1980). Japan’s economic aid: policy-making and politics. New York, NY: Taylor & Francis.
4. Sony. (2012). TVs from Sony. Web.
5. Turnovsky, M. H., Mutti, J. H., & Eicher, T. S. (2009). International Economics. New York, NY: Taylor & Francis.

Company Overview

Sony Corporation (Sony) is one of the leading electronics manufacturing and distribution Companies in the world. The company deals with the design, development, manufacture, and sale of products such as communication products, televisions, video and audio products among other electronic components (Städtler, 2011). Apart for this entity, it also offers insurance services through its subsidiaries in Japan. Other business operations include advertising agency and network services.

The company’s operations fall under six reportable segments. They include networked Products and Services; Music; Consumer Products and Devices; Pictures; Financial Services and others. It also operates its subsidiaries across 200 countries inEurope, North America as well as Asia. The Company’s headquarters is in Tokyo, Japan. Its major industry competitors include Dell, Creative technologies, LG, Samsung, Fujifilm Holdings, Philips, Pioneer Corporations, Hitachi, and Casio Computers (Städtler, 2011).

How Internal and External factors may affect the firm

The internal factors are those whose origin and control are within the capacity of the firm. They include strengths and weaknesses. The strengths within Sony shall be material assets that will boost its performance if well administered. This firm may achieve strategic objectives through utilization of its strengths.

On the other hand, external factors entail those influences that emanate from outside the firm. They come as opportunities and threats. Threats are harmful hence; they will impair on Sony’s growth objectives. Such threats may come in form of strong brands, imitation, and changing customer needs.

On the other hand, opportunities are external factors that the business can utilize in achieving its objectives. Threats also fall under the external fundamentals that could damage performance of Sony Corporation (Jalan, 2004). Analysis of the company using this tool would be beneficial in diagnosing the external and internal environments in which Sony operates. As such, the information can steer growth and progress within the limits of its goals and aims.

EFE Matrix

It relates the firm’s performance ratings relative to a laid down aggregate score. The tool employs a factor approach is its analysis of the external opportunities as well as threats in which numerous factors relevant to the firm are established. Allocation of weights depends on the magnitude of their influence on the firm’s performance in order to develop their relative weights (Städtler, 2011). The weights may take ratio or percentage form.

The above analysis of 3.35 aggregate weight score in Sony’s EFE Matrix indicates that it is responding well in respect of its threats and opportunities in the electronics industry.

The analysis depicts the external environment in which Sony operates, and how it is doing relative to the industry participants (Jalan, 2004). It is therefore, important to note that strategic efficiency has capitalized on the opportunities presented by both environments. On the other hand, the company has done well in monitoring and dealing with the threats that may deter its progress.

The ratings used above for individual factors are calibrated on the scale of 1to 4. The total maximum score obtainable by any industry participant is four. The weights and ratings employed in the EFE Matrix demonstrate the effectiveness of a Company’s strategic framework (Jalan, 2004). Below is the interpretation of the weighted scores in order to show the outcome of the performance obtained by Sony.

4 = Excellent Response to factors; 3 = Above Average; Average Response and 1 = Poor Response.

Internal Factor Evaluation Matrix (IFE Matrix)

The IFE Matrix is an audit tool of an organization. This strategic management tool helps the management to evaluate a company’s internal environment in relation to its threats and strengths.

This tool summarizes the strengths and weaknesses of Sony Company in order to observe its performance from the internal space (Städtler, 2011). The methodological approach used in the design of the IFE is similar to that used in EFE. The difference between the two is that IFE deals with the internal factor analysis whereas EFE examines the performance of a firm with regard to external.

Sony’s weighted score of 3.05 represents an average performance and response to its internal factors influencing its operations. It shows a well strategically managed position in a bid to capitalize on the prevailing strengths while at the same time cushioning itself against its weaknesses (Jalan, 2004).

Interpretation of the weights

4 = Excellent Response to factors; 3 = Above Average; Average Response and 1 = Poor Response.

SWOT Analysis

Strengths

• Sony has the capacity to develop a high-quality product portfolio for its customers.
• historical results and record show that the company is reputable in the market
• Advanced and technological capacities capable of handling multiplicity of product lines present Sony with a rare opportunity for success. The company engineers have the knowledge of the previous failures and are capable of making up for the lost glory.
• The competitiveness of the company is good compared to its market rivals
• The ability to expand its market share and produce a wide range of products

Weaknesses

• Prevailing price wars in the industry are a major undoing to Sony. The company has enjoyed the confidence of being a price leader the recent past, but the emergency of strategic price wars poses a potential threat (Jalan, 2004).
• Minimal diversification in its product portfolio is a critical scenario that may hamper Sony’s strategic growth. Retarded growth of its sales depicts a great slow down in its expansion plans.
• The management of the company seems to have no proper strategic management plan to forge the business ahead.
• Lack of proper formula of communication within the functional departmental network has led to reduced productivity.

Opportunities

• Its originality and creativity is an essential asset for its potential growth. Its reputation may pose a significant platform for its progress.
• Its customer led pricing strategies aimed at winning market loyalty is a huge milestone opportunity presented to it (Jalan, 2004).
• Its technological strength may render its expansion plans possible in order to capture other income streams.
• Strong and robust supply chain- marketing and advertising departments have stepped up their strategies to create new market niches for its expanding product portfolio through strategic partnerships with leading chain suppliers.

Threats

• Competitors- The industry is rife with competitors who are equally powerful. They are market participants with strong brands, and they include Samsung, Fujifilm, and LG among others.
• Market surveys and researches indicate that imitation of its products is on the increase. This product proliferation poses a huge threat on the originality of products and customer loyalty developed over many years. This trend occasioned by the emergence of new and cheaper technologies from the Asian region whose proponents have interfered with the brand (Jalan, 2004). Lack of adequate and comprehensive strategy implies that most of its rivals are doing better because their product penetration is doing well.

Summary of SWOT matrix (Analysis)

Conclusion

The SWOT analysis above demonstrates how Sony has been able to nurture is ability to gain a competitive advantage in the market. Although weaknesses and threats are inevitably present, their effects have remained detrimental due to capitalization on opportunities and strengths inherent within the firm. Some of the significant factors greatly responsible for this milestone include a robust and sustainable technology, price leadership, and innovation.

References

Jalan, P. K. 2004). Industrial sector reforms in globalization era. New Delhi: Sarup & Sons.

Städtler, R. (2011). Strategy Coursework – Sony Corporation. Norderstedt: GRIN Verlag.