The Sony Strategy Failure Management Essay

The Sony Strategy Failure Management EssaySony is the combination of two word sonus and sonny. The both nomenclature sonus and sonny is a latin word. The literal meaning of sonus is sound and, sonic and sonny is inadequate son. Easy to pronounce and read in any language, the summons Sony, which has a lively ring to it, fits comfortably with the spirit of freedom and open-mindedness. Since, Sony is the combination of two word sonus and sonny, represents a actually sm all group of young muckle who have the energy and passion towards unlimited creations and innovative ideas. Sony foundation was started in 1946 when Masaru Ibuka and Akio Morita worked together with a small team of obsessive and committed group of employees take a crap Tokyo Tsushin Kenkyujo (Totsuko), or Tokyo Telecommunications Research Institute (billion dollar global conglomerate). In 1958 the company was formally adopted Sony Corporation as its corporate name. The main(prenominal) objective of the company is to design and create innovative products which would benefit the people.Sony a martplace creator and leaderAfter the World War II, Sony became popular aft(prenominal) applying applied transistor technology, which was invented byTexas Instruments(TI). The co-founder of the Sony, Akio Morita was always unbroken looking for technological advancement and for that the company leadership spent countless hours in innovatively thinking near how to apply these advances to improve lives. With such a passion for creating spic-and-span markets, Sony was an early creator, and dominator, of what we now call consumer electronics because of the following reasons as given belowSony improved substantiality state transistor radios by making good quality sound and also inexpensive to.Sony developed the solid state television by substitution tubes to make TVs more than reliable, better working and use less energy.Sony developed the Triniton television tube, which dramatically improved the quality of color (yes Virginia, once TV was all in black white) and enticed an entire generation to switch. Sony also expanded the size of Trinitron to make larger sets that better fit larger business firms.Sony was an early developer of videotape technology, pioneering the market with Betamax before losing a battle with JVC to be the standard (yes Virginia, we once watched movies on tape).Sony pioneered the development of camcorders, for the first time turning parents and everyone into home movie creators.Sony pioneered the development of strong-minded mobile entertainment by creating the walkman, which allowed for the first time people to take their own recorded music with them, via cassette tapes.Sony pioneered the development of compact discs for music, and developed the walkman CD for portable use.Sony gave us the play station, which went far beyondNintendoin creating the products that excited users and made home gaming a market.Very few companies could ever boast a string of such successful products. A report said that in Sony executives spent 85% of their time on technology, products and new applications/markets, 10% on serviceman resource issues and 5% on finance. Mr. Morita said that financial results were just those results of doing a good job developing new products and markets.The origin and impact of Japan Inc on SonyBy the middle 1980s, America was panicked over the absolute domination of companies like Sony in product manufacturing. Not only consumer electronics, but also in automobiles, motorcycles, kitchen electronics, steel and a growing number of markets. Politicians referred to Japanese competitors, like the wildly successful Sony, as Japan Inc. and discussed how the powerful Japanese Ministry of Trade and Industry (MITI) efficaciously shuttled resources around to beat American manufacturers. Even as rising petroleum costs seemed to cripple U.S. companies, Japanese manufacturers were able to turn innovations (often American) into very success ful low-priced products growing sales and profits.What went wrong for Sony?In 1950 W. Edward Deming had convinced Japanese leaders to focus, focus on making things better as well as winged and cheaper. Taking advantage of Japanese post war dependence on foreign capital, and foreign markets, this U.S. citizen directed Japanese industry into an obsession with industrialization as practiced in the 1940s and was credited for creating the rapid massive military equipment build-up that allowed the U.S. to defeat Japan. Unfortunately, this narrow obsession was left Japanese business leaders, by and large, with little skill set for developing and implementing RD, or innovation, in any other area. As time passed,Sony felt victim to developing products for manufacturing, earlier than pioneering new markets.Sony had cease up in a cost/price/manufacturing war withDell, HP, Lenovo and others to make cheaper PCs rather than the exciting products. Sonys evolved a distinctly industrial dodge, focused on manufacturing and volume, rather than trying to develop uniquely new products that were head-and-shoulders better than competitors.In mobile phones Sony hooked up with, and eventually acquired,Ericsson. Again,no new technology or apparent movement to make a wildly superior mobile device(like apple did.) Instead Sony sought to build volume in order to manufacture more phones and compete on price/features/functions against Nokia, Motorola and Samsung. Lacking any product or technology advantage, Samsung clobbered Sonys Industrial strategy with lower cost via non-Japanese manufacturing.When Sony updated its competition in home movies by introducing Blu-Ray, the strategy was again an industrial one about how to sell Blu-Ray recorders and players. Sony didnt sell the Blu-Ray software technology in hopes people would use it. Instead it kept Blu-Ray proprietary so only Sony could make and sell Blu-Ray products (hardware). Just as it did in MP3, creating a proprietary version u sable only on Sony devices. In an information economy, this approach didnt fly with consumers, and Blue Ray was a money loser largely irrelevant to the market as was the now-gone Sony MP3 product line.In the eggshell of televisions, Sony was lost the technological advantage it had with Trinitron cathode ray tubes. In flat screens Sony has applied a predictable, but money losing industrial strategy trying to compete on volume and cost. Up against competitors sourcing from lower cost labor, and capital, Sony was lost over $10 billion over the last 8 years in televisions.Sonyhasnt made a profit in 4 consecutiveyears, just recently announced it will double its expectedlossfor this year(2012) to$6.4 billion, has only 15% of its capital left as and wasonly worth 1/4 of its value 10 years ago.Sonys Leadership was a keen conspirator to the failed strategyAkio Morita was an innovator and new market creator of Sony. But, Mr. Morita lived through WWII, and developed his business approach befo re Deming. Under Mr. Morita, Sony was used the industrial knowledge Deming and his American peers offered to make Sonys products highly hawkish against older technologies. The products led, with industrial-eratacticsused to lower cost.But after Mr. Morita Sonys other leaders were trained, like American-minted MBAs, to implement industrial strategies. Their minds put products and new markets, second. First was a commitment to volume and production regardless of the products or the technology. The fundamental belief was that if Sony had enough volume, and cut costs low enough, Sony would eventually succeed without any innovation.By 2005 Sony r all(prenominal)ed the pinnacle of this strategic approach by installing a non-Japanese to run the company. Sir Howard Stringer made his fame running Sonys American business, where he exemplified industrial strategy by deletion 9,000 of 30,000 U.S. jobs ( closely one third.).Mr. Stringer, strategy was not about innovation, technology, products or new markets.Sonys industrial strategy was cost-cut first, products are less meaningfulMr. Stringers industrial strategy was to be obsessive about costs. Where, Mr. Moritas meetings were 85% about innovation and market application. Mr. Stringer brought a modern MBA approach to the Sony business, where numbers especially financial projections came first. The leadership, and management, at Sony became a model of MBA fostering post-1960. Focus on a narrow product set to increase volume, avoid costly development of new technologies in favor of seeking high-volume manufacturing of soulfulness elses technology, reduce product introductions in order to extend product life, tooling amortization and run lengths, and constantly look for new ways to cut costs. Be ardent about cost cutting, and reward it in meetings and with bonuses.Thus, during his brief tenure in Sony Mr. Stringer will not be known for new products. Rather, he will be remembered for initiating two waves of layoffs in wha t was historically a lifetime employment company (and country.) And now, in a nod to Chairman Stringer the new CEO at Sony has indicated he willreact to ongoing losses by another round of layoffs. This time estimated to be another 10,000 workers, or 6% of employees. The new CEO, Mr. Hirai, trained at the hand of Mr. Stringer, demonstrates as he announces ever greater losses that Sony hopes to somehow save its way to prosperity with an Industrial strategy.Since Japanese equity laws are very different that the USA. Companies often have much higher debt levels. And companies can even operate with negative equity values which would be skilful bankruptcy almost everywhere else. So it is not likely Sony will fill bankruptcy any time soon, if ever.After 4 years of losses, and entrenched Industrial strategy with MBA-style leadership focused on numbers rather than markets, there was no reason to think the trajectory of sales or profits will variety show any time soon.As an employee, facing ongoing layoffs why would you wish to work at Sony? A me too product strategy with little technical innovation that puts all attention on cost reduction would not be a fun place and offers little promotional growth.And for suppliers, it was assured that each and every meeting will be about how to lower price over, and over, and over.Sony was once a company to watch. It was an innovative leader, which pioneered new markets. Not unlike Apple today. But with its Industrial strategy and MBA numbers- focused leadership it is now time to say, sayonara. Sell Sony, there are more interesting companies to watch and more advantageous places to invest.QuestionsHighlights Sonys industrial strategy?What was the reason for the failure of Blu Ray strategy?What was the threat for employee as well as the supplier?Examine the opinion of both Morita and Stringer?