Critical Analysis of Sony Subsidiaries and International Exposure

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Introduction

Sony is a world-renowned large-scale comprehensive multinational conglomerate. Headquartered in 1-7-1, Gangnam, Minato-ku, Tokyo, Japan.

Sony is a world leader in audiovisual, video games, communications products, and information technology. It is the world’s first pioneer of portable digital products. It is one of the world’s largest electronics manufacturers and one of the world’s three major players in the video game industry. One of the six major movie companies in Hollywood, USA. Its brands include Xperia, Walkman, Sony Music, Columbia Pictures, PlayStation, and more.

There was a brand of Vaio, but on February 6, 2014, Sony divested VAIO business, and the Vaio brand will be operated by Japan Industrial Partners Inc.

From April 1st, 2018, the current deputy director and chief financial officer Yoshida Kenichiro was promoted to the president. The current president and CEO, Hirai Kazuo, is the chairman of the company.

On December 18, 2018, the ‘2018 World Brand Top 500’ compiled by the World Brand Lab was announced, and Sony ranked 100th.

It has emerged as an industry leader in technology by designing, developing, and manufacturing electronic devices such as transistor radios, tape records, and televisions.

Sony introduced products such as CD Player and portable music system popularly known as “Walkman” which revolutionized home media industry. Sony further diversified into cameras, gaming consoles, home news PC’s, mobile phones, and televisions which helped them build their value and image in the international market.

Sony has established production base in Asia with a wide sales network in around 200 nations across the globe. They have a strong marketing network in Japan, US, and Europe.

Sony Subsidiaries and International exposure

In October 1968, the world’s first color TV with Trinitron TV image technology was released: KV-1310. In May 1975, the world’s first BETAMAX video recorder was released.

In 1978, a revolutionary CCD (charge-coupled device) sensor technology was developed. In July 1979, the revolutionary Walkman World’s first Walkman product was released: TPS-L2. In 1983, the United Kingdom Philips jointly released a compact disc (CD) and led the 74-minute standard. In December 1996, the first digital camera was released: CyberShot DSC-F1. In March 2000, the Sony PlayStation 2 generation game console was released. In October 2001, Sony and Ericsson each held 50% of the shares and jointly established Sony Ericsson. In February 2002, the Blu-ray Disc standard for the next generation DVD disc storage format was released. In December 2004, the next generation of PlayStation Portable handheld game consoles using UMD storage media was released. In January 2005, IBM and Toshiba (TOSHIBA) jointly released the Cell-microprocessor with 4GHz start-up. On May 16, 2005, the E3 show in the United States released the PlayStation 3 generation game console equipped with the Cell processor. On July 19, 2005, he announced a partnership with Konica Minolta (Konica Minolta) to join the digital SLR camera market in response to the saturation of consumer digital cameras. On August 25, 2005, the joint IBM and Toshiba (TOSHIBA) announced the detailed process of the Cell-microprocessor. On September 13, 2005, September, BRAVIA’s next-generation LCD TVs were released worldwide. On September 30, 2005, SanDisk released a Memory Stick Micro (M2) memory card. On February 21, 2006, the world’s smallest support high-definition 1080i HDV-HC3 was released. On April 10, 2006, it again cooperated with South Korea’s Samsung Electronics to produce the eighth-generation S-LCD LCD panel factory. On April 20, 2006, the brand new digital SLR camera brand alpha (alpha) was released. In November 2006, PlayStation 3 equipped with Cell processor and next-generation Blu-ray Blu-ray technology was officially launched in Japan, the United States, Taiwan, and Hong Kong. On November 2, 2006, the eighth-generation S-LCD LCD panel factory, which was put into operation with South Korea’s Samsung Electronics, officially started construction. It is expected to officially put into production capacity in the fall of 2007. On November 11, 2006, the PlayStation 3 generation game console was officially launched in Japan, and 100,000 consoles were sold out in an instant. In 2006, with Ericsson announced that it will expand its cooperation, in addition to continuing the original mobile phone design and manufacturing business, the two parties will jointly develop software for mobile and broadband TV applications.

On January 19, 2006, Sony and Kemei jointly announced the acquisition of Kemei Camera Business by Sony. The acquisition agreement officially decided to transfer some assets related to Kemei digital SLR cameras to Sony, while Kemei will camera and related. The customer service of the product is entrusted to Sony, and the agreement will take effect from now on. In February 2008, with the release of the new flagship Xperia X1, Sony Ericsson’s high-end smartphone brand Xperia officially entered the public’s field of vision. In January 2011, the PlayStation VITA second-generation handheld game console with quad-core, dual joystick, and front, and rear touch screens was released. On October 27, 2011, Sony announced that it will acquire the remaining 50% of the shares for 1.50 billion euros. It is wholly-owned and announced that it will stop using the ‘Sony Ericsson’ brand from mid-2012. In the future, the mobile phone will be unified with the ‘SONY’ logo. In April 2012, Sony was approved by the European Commission to acquire the established music company EMI for $2.2 billion. So far, Sony has become the world’s largest music company, controlling one-third of the world’s music copyright. In July 2012, Sony acquired the cloud game company GAIKAI for $400 million to expand its future gaming machine business. On February 21, 2013, the PlayStation 4 was released in London, but product information such as the appearance of the price was not announced at the time. On June 10, 2013, the PlayStation 4 was officially released at the E3 Electronics Show in the United States, and the appearance, price, and starter games of the mainframe were announced. At the press conference, Sony confirmed that it will not restrict second-hand game transactions, regular online certification, etc., like competitor Xbox One.

Joint Ventures

Sony Ericsson

Sony Mobile Communications is an international company founded on October 1, 2001. It is a joint venture between Sony and Ericsson. It was originally founded on February 16, 2012, and is headquartered in London. It is Sony Ericsson Mobile Communications. Sony Mobile’s exclusive operation is to create smartphones under the Android-Xperia sub-brand, as well as device accessories and software. The strategy is to release new models that enable digital photography and other multimedia features.

Sony ESPN

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

Ghelia

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

According to the pie chart, the data showed that the FY2017results accounted for about 180 bin yen of Games and Network Services, which was the most propotion in the whole pie chart, and the Financial was the second proportion, about 170 bin yen. Other factors are Semiconductors, Music, Home Entainment and Sound, Pictures, Imaging Product and Solutions, Mobile Communications.

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

Opportunities

Sony is one of the most recognized and loved brands in the world. Sony plans to implement some network initiatives to expand the T.V business. International consumption of American TV dramas continues to remain strong. On the international market side, Sony plans to launch six new regional language games, and Sony will transfer its gaming technology from the London studio to India.

Challenges

European economic issues have slowed growth of the AD sales market in many territories.

Programming prices are expected to rise, volatility of foreign currencies create uncertainty for predicting financial results in US dollars.

To enhance the brand further by taking advantage of all the assets across the organization globally, including both electronics and environment.

The damage from cyber-attacks is estimated at $170 million. On April 25, 2011, the Sony PlayStation Network was attacked, forcing the company to rebuild the network. Sony revealed that more than 100 million accounts of personal data were stolen, and the service was not available for a few weeks until recently partially restored. The hacker has obtained user information and may include a credit card number. The PlayStation Network had a total of 77 million users. On April 27, the network was attacked again and Sony was forced to shut down the network.

Sony has notified the PlayStation network users that personal information (including name, address, payment history, and birthday) was obtained by an ‘unlawful person’. Last week, the ‘illegal person’ attacked the Sony network and caused service disruption. Sony user credit card numbers may also be mastered.

On July 13, 2006, the European Court of First Instance in Luxembourg overturned the EU’s 2004 approval of the merger of Sony Music and Bodman (BMG), making SONY BMG the world’s number one. The two major record companies are in danger of being split. The European Court of First Instance said in this historic judgment that the European Commission that approved the merger at that time only conducted a very sloppy examination of the consequences of the merger. The Commission did not provide sufficient evidence to legally prove that the two mergers did not There is a dominant market position, and there is no such possibility after the merger.’

The European Court’s decision means that Sony Music and Bodman (BMG) will re-submit the merger plan to the European Union, and the new plan will include market conditions. The European Commission will re-examine the merger of Japanese Sony Music and German BMG.

At the end of 2005, Dell (DELL), the world’s largest personal computer manufacturer, continuously reported a laptop explosion accident and caused an investigation by the US Consumer Product Safety Commission and the Ministry of Economy, Trade and Industry.

On August 15, 2006, Dell and the US Consumer Product Safety Commission conducted ‘the largest global battery recall notice in the history of the electronics industry.’ The recall included approximately 4.1 million Dell lithium ions manufactured by Sony. After the battery, Apple, Toshiba’s Dynabook, Lenovo’s IBM-ThinkPad, Fujitsu, Hitachi, Sharp, Gateway are announced. Recall the laptop battery. On September 29th, Sony decided to launch the ‘Lithium Battery Autonomous Replacement Program’ on a large scale to recycle lithium batteries for notebook computers produced worldwide, and to provide free replacement of new products.

Sony said that the reason for the recall is that in extremely rare cases, tiny metal chips in the relevant battery cells will contact other parts of the battery core, resulting in a short circuit. In general, when this happens, the battery pack will be powered down. However, under some extremely rare conditions, this internal short circuit can cause overheating of the cell and possible fire. The probability of this happening will vary depending on the computer system configuration used by different computer manufacturers.

On October 19, 2006, Sony announced the “Fiscal Year 1 of the fiscal year 2006”. Due to the impact of the “Lithium Battery Autonomous Replacement Plan”, Nobuyuki Oneda, the financial founder, said that there may be a total of 9.6 million recalls worldwide. The Sony-made notebook battery will cost the company about 51 billion yen, which is much higher than the previous estimate of 20 billion to 30 billion yen.

On February 29, 2016, Sony (China) Co., Ltd. submitted a recall plan to the AQSIQ to recall some imported VAIO notebook battery packs. The production date is from January 2013 to April 2013. The model number is VGP-BPS26. According to the company’s statistics, the number of battery packs affected in mainland China is 10,617. Due to the incorporation of metallic foreign matter in the production process, the battery pack in the scope of the recall has a risk of burnout in some cases.

Competitive risk

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

Sony and ERICSSON

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

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

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

New Model

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

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

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

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

Start Over

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

Nokia 24.2%
Samsung 9.2%
LG Electronics 6.8%
Apple 5.6%
ZTE 4.5%
Sony Ericsson 2%

Many of their production centers and research and development centers around the world. Closed, they had to cut off about 3,000 employees. Sony decided to acquire Ericsson’s shares at Sony Ericsson’s price as a subsidiary of Sony Electronics. Therefore, Sony Ericsson became Sony Mobile Communications.

Foreign exchange

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

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

It shows the electronic manufacturing facilities at Sony all over the world.

Drawbacks

Sony does not offer premium phones like other competitors in the mobile phone manufacturing industry. Their research and development is very slow. If your R&D department is not up-to-date, it means that you are not providing satisfactory products to your customers. They offer innovative products, but marketing strategies are not as effective as attracting customers. They face problems because they focus on cost-cutting plans and unemployment. In June 2008, they had 12,000 employees. After the launch of this cost-cutting plan, the number of employees worldwide decreased by about 8,000.

In 2008, Sony’s quality problems were mainly concentrated on notebook products.

The motherboard of the Sony FZ35 laptop is exploding with design flaws. The complainant said that because the purchased notebook is still under warranty, Sony’s maintenance department replaced the machine or motherboard for free, but Sony denied the notebook has design flaws.

Sony’s CR series notebooks produced since January 2008 have been accused of short-lived phenomenon. This notebook series, which once occupied the ‘sales champion’ of Sony notebooks, was almost found to have problems after one week of consumer purchase.

The quality issue in 2009 involved the expansion of the product line.

First of all, there are endless TV problems. At the beginning of the year, Sony LCD rear-projection TV KF-E42A10 and other five problems TV problems, Sony took a free on-site service to upgrade the TV software for users but did not provide any compensation.

There are camera problems. On August 20th, Sony China Branch released a product announcement on its official website, stating that it will replace the DSC-W170 housing parts of the Cyber-shot digital camera sold from April 2008 for consumers. At the end of August, 315 Consumer Electronic Complaints Network received several complaints about the Sony T20 digital camera in the country, and “starting inexplicable jitter” became the complaint keyword.

Mr. Luo from Shenzhen felt deeply about the process of defending his rights caused by the purchase of the Sony FX1000E camera. ‘Sony has been suffocating and evasive to consumers. There is nothing in the communication except for the feedback. Sony’s every push Step by step is testing consumers, and the complaints ‘hiding cats’ and ‘playing Tai Chi’ also seem to be their way of handling.

The notebook problem also exploded. In the second half of 2009, Sony received 209 complaints about abnormal computer fever, including 83 in Japan and 126 outside Japan. The main reason is that computer design defects can cause computer overheating and short circuit. To this end, Japan Sony announced the recall of hundreds of thousands of VAIO TZ series notebooks on September 4, 2008. However, Sony seems to be lacking in handling complaints from Chinese users.

Dozens of Sony Sony notebook users reported that the fan built into the computer was noisy, and the computer screen showed “water ripples”, which seriously affected normal use. Although Sony (China) Co., Ltd. timely introduced measures such as extended warranty and explanation for the user’s response, the user did not recognize it. The stalemate until January 17, 2010, Sony China announced: VGN-CS1 listed in October 2008 The series, the CS2 series listed in February 2009, and some of the VAIO notebooks listed in the CS3 series listed in May 2009 may have a horizontal line on the LCD panel after a period of use. The company decided to base on the original two-year warranty period. , extended 1 year warranty period, that is, 3 years of free repair service from the user’s purchase of products. Users who have purchased the 3-year extended warranty service are not covered by this policy.

In 2010, complaints against Sony products entered a period of high incidence. Not long ago, People’s Daily Online analyzed the results of online and offline surveys of 3,000 consumers and found that Sony occupied the second place with 23% of the brand’s ownership, but at the same time, Sony’s proportion of complaints was also related to brand ownership. Just proportional. In this survey of People’s Daily Online, the focus of consumer complaints is on after-sales service. For Sony digital cameras, the problems that reflect more are: the door repair is not timely, the maintenance level is not high, and the maintenance point cannot be contacted.

In the 315 consumer rights online, Sony’s complaints in recent years have also shown a significant upward trend. From the 1st to the 15th of this month, there are 64 on the 315 Consumer Electronic Complaints website. A complaint about Sony.

On January 24, 2016, Sony announced that there is a light leakage problem with its high-end full-frame card camera RX1RII, and Sony will provide free inspection and repair services for this camera.

Conclusion

R&D is an important part of any organization, and it plays an important role in mobile phone manufacturing companies, but Sony Ericsson uses it as a cost and closed R&D department. Companies must seek to innovate and implement new marketing strategies to provide customers with a satisfying product and raise awareness. Equally important, we should also know that customers always want new and different things. Therefore, providing them with new and different mobile phone companies should always seek the best R&D tools and technologies.

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