Business in New Asia: Sony

Topics: Sony, Sony Music Entertainment, Sony Ericsson Pages: 10 (607 words) Published: December 3, 2014
Sony Corporation
Business in New Asia
Prof. Wiboon
Meijuan Xu

overview of Contents
• Brief environmental analysis of the
company’s current situation

• Brief explanation of the decision(s)
facing them

• Brief recommendation of what they
should do

Overview of company
• COMPANY: Sony, a company founded in 1946 with one of the most famous global brand names.
• SONY’S DNA: A distinctive will and drive to generate new value • MAIN BUSINESSES: Sony operates primarily as a consumer electronics firm. For many years Sony dominated the consumer electronics market: from Sony Walkman to its Trinitron TVs, Sony innovations in the consumer electronics space were unparalleled. It was organized around three largest business divisions: electronics, entertainment, and financial services. • EMPLOYEES: Sony in 2013 was an enormously complex company employing 146,000 employees.

• PERFORMANCE: Due to its complexity of the corporate structure, fell from market dominance, and loss of focus, Sony’s financial and operating performance are both not satisfying. Now Sony is losing money in its consumer electronics business and is having bottom-line success in its entertainment business.

Situational Analysis
Situational
Analysis

Sony consumer
Electronics

Sony
Entertainment

Internal Analysis

• Global brand
name
Strong financial
support from banks
• Poor financial
performance
Lost dominance

• Profitable
Great leadership
under Michael
Lynton
• Isolation
management
from its parent
company

External Analysis

• Emerging
countries
• Competition
Demand decreasing
Mobile business far
behind Apple and
Samsung

• Expansion
overseas
• Competitors

Financial Analysis
Sony’s three large
business divisions:
Electronics
Entertainment
Financial services
Profitable
businesses:
Financial Services
Music
Pictures
Devices
*All electronics
segments are
declining (too BAD)

Comparison of Sce and
SPE

=> Electronics Segment lost money in four
years and had almost no profit in two other
years due to competitors from Korea and
China and also Apple’s dominance in music
player, mobile market.

=> SPE: ranked no.1 at the worldwide
box office in 2012
Sony Music’s share of the global music
market increased to 22.3% in 2012

Problems
• Loss of focus--No synergy between two major segments in
• Management
• Products and Technology
• Strong competitors in each segment
• Apple dominated the music player and music download
business
• Samsung and Apple dominated Mobile
Plus, demand for traditional electronics such as digital cameras, televisions, and camcorders was declining

Unlucky!! But also…
• Past success experience
• Not capitalizing on new technology

Alternatives
1.

Change the structure of its ownership of Sony Entertainment

•. Advantages: Strengthen Sony by reducing its debt, thereby providing additional resources and capital to focus on revitalizing the resurgent Sony Electronics
•. Tradeoffs: Sony will lose management of the most important profit contributor (BAD)
2. The parent company keeps both segments under its ownership and make synergies between businesses
•. SELL OFF declining segments (Mobile and home entertainment) to get capital in order to invest on new businesses. Focus on B2B •. Accelerate management decision-making and make quick action and investments based on long-term sustainable strategy.

•. (GOOD) Sony will be able to re-focus its resources to regain growth and profitability.

Sony in 2014
• Sony lost focus on what made it a successinnovation in the consumer electronics. Instead, it held on to old technologies and old businesses that
had become commodities. And by focus on low cost
production rather than innovation, it lost its
competitive advantage.
Recently Sony seems has taken right steps to change:
• Cutting jobs in the PC business and putting it up for
sale
• Cutting jobs in the TV business and separating it out –...
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