International Business Strategy
Case Study: Sony: managing the international R&D network 1. How did Sony internationalize its R&D activities?
Sony started to internationalize its activities in the 1950’s. For this, it used an incremental and cautious way. They followed the Morita’s strategy which is: first to learn about the market, to learn how to sell to it and to build up its corporate confidence before to commit itself. He also says that when you have confidence, you should commit yourself wholeheartedly. So Sony started by exporting products through foreign agencies or its own sales offices when entering foreign markets. The manufacturing plants close to markets where sales took off were also set up. Sony also internationalized its R&D activities, starting with marketing activities in the US and other centres across Europe. Sony established incrementally overseas technology centres when the overseas sales and manufacturing subsidiaries were successful. Until the early 1980’s, these R&D centres were set up by Japanese business labs or by foreign subsidiaries without the direct involvement of corporate headquarters. Sony established its first overseas R&D centre in San Jose in California in 1977. The second was built in Basingstoke in UK in 1978.
What were the initial motivations for Sony to establish technology centres abroad? The main reason why Sony’s foreign subsidiaries established R&D activities was to solve problems faced by local sales and manufacturing activities, especially requirements. Indeed they had problems to modify products for local markets and to provide technological support to overseas plants. With technology centres established directly in the countries concerned, it was easier to analyze the local needs and to act directly. Sony also believed that foreign subsidiaries should ultimately conduct their own manufacturing, marketing, service financing and...