Sony Management Analysis

Topics: Sony, Sony BMG, Sony Music Entertainment Pages: 31 (6244 words) Published: March 1, 2013
How and when was the organization founded?
Sony was founded by two engineers, Akio Monita, a physicists and Masaru Ibuka. It was Ibuka who, after the end of World War II, originally founded a radio repair shop. The following year his friend Akio Monita joined him with twenty other fellow workers from the Japan Precision Instrument and Co. company and together they formed a company named Tokyo Tsushin Kenkyujo (Tokyo Telecommunications Laboratory). It was on that day; May 7th of 1946 that these two engineers founded a firm in Nihanboashi, Tokyo with a start-up capital of 190,000 yen and that would one day grow into a more than 60 billion global organization. It was however not until much later that the company acquired its now well-known name of Sony. The idea of changing the name came to Monita on their first trip to the United States, they decided they needed a more easily pronounceable and recognizable name. “TKK” was their first intuition however this name was already used by a railway company in Japan. Monita was in fact so convinced that they should have a name for themselves that he turned down an offer from Bulova to produce 100,000 radios because Bulova wanted the radios to carry their name. Monita answered Bulova’s proposition by saying that “Fifty years from now, I promise you that our name will be just as famous as your company name today”. It was then when both partners came up with the name “Sony”. It was derived from a combination of two other words, “sonus” and “sonny”. “Sonus” come from Latin and is root to words such as sound or sonic. “Sonny” on the other hand finds its name from a popular term used in the 1950 in United States to call a youthful boy.

Ibuka stated in the founding prospectus the primitive goal and aspiration the small company originally had: “The first and primary motive for setting up this company was to create a stable work environment where engineers who had a deep and profound appreciation for technology could realize their societal mission and work to their heart's content.” How did the organization evolve from this primitive goal to the global organization it now became?

Sony came a long way from being that small company with the primary motive of providing work for engineers. From the start Ibuka was able to see and foretell what products were most needed and had the greatest potential to be applied in everyday use and was hence able to make Sony’s products amazingly attractive for customers. Monita on the other hand was able to see the uses and advantages in marketing to be able to make Sony the worldwide known company it is now-a-days.

Of course all this could not have been possible without some crucial expansion and diversification and some strategic mergers and partnerships. The best way to explain this is through a timeline which highlights Sony’s most significant milestones: Timeline1:

1945 – Ibuka creates a radio repair shop in Tokyo
1946 – The engineers Ibuka and Monita create the firm Tokyo Tsushin Kenkyujo 1950 – They launch “Japans first magnetite-coated, paper-based, recording tape, Soni-tape” 1955 – They start using the “Sony” logo on Totsku products 1958 – Tokyo Tsushin Kenkyujo changes its name to “Sony” and gets listed in the Tokyo stock exchange

1968 – They establish Sony (UK) in the UK
1988 – Sony buy CBS records to form Sony Music Entertainment 1989 – Sony purchases Columbia Pictures to form Sony Pictures Entertainment in 1991 1993 – Sony establishes Sony Computer Entertainment


See appendix 1.1 to view full timeline


1996 – Sony establishes its presence in Chinese Markets
2001 – Sony establishes Sony Bank in Japan
2001 – Sony establishes Sony Ericsson Mobile Communications 2004 – Sony establishes Sony Financial Holdings
2004 – Sony establishes Sony BMG Music Entertainment, a music distribution company 2005 –Sony acquires Metro-Goldwyn-Mayer (publicly held, motion picture, television and home video company)
2006 – Sony and Samsung...
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