Sony Problems and Issues

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A Report analyzing current problems/issues faced by the Sony Corporation and suggested solutions

Presented to Ajay Kumar, Strategic Management Lecturer
Report researched and written by Adelina Abushaeva, student of Central Queensland University

Executive Summary

This report analyzes the problems/issues which Sony Corporation faces. The company is facing multi faced problems and its solution should also be multi faced. It requires a major over haul. Sony's current financial difficulties are tied to its corporate culture which begun over 30 years ago.

The key problems/issues of Sony are slowing down of sales and revenues, cost cuttings, moving factories in Asia, cooperation between divisions and efficient management. With such a large multinational corporation, greater planning and more use of strategies should be pursued. Sony could start with the implementation of a new strategy, with profit and benefits of the company tied more closely to everyday operations. Internally, the company’s forces, such as the management, the designers, the production and the marketing should achieve better communication and cooperation. Alliance and cooperation between competitors should also be actively sought in order to create standards in new fields. Sony should aim at being the leader in its field.

Recommended solutions:

• Regarding cost cutting strategy, Sony should seriously consider setting up operations in other Asian countries in order to take advantage of the cheap labor and the emerging markets.

• Diversification, instead of pursuing the fast changing and easily imitated consumer goods market.

• Sony should use its technological know-how for high-end business and office equipment.

Table of Contents

Title Page

Executive Summary

Table of Contents

1.0 Introduction 4

1.1 Background of Sony4

1.2 Problems4

2.0 Schools of strategy thoughts5

3.0 Analysis and suggested solutions6

3.1 New CEO/Changes in culture6

3.2 Communication/Education7

3.3 Leadership and Organization-wide change7

3.4 Cooperation between divisions7

3.5 Cost Cutting: Moving to Asia8

3.6 Proprietary Interfaces8

4.0 Conclusion8

5.0 Recommendations9

6.0 Reference list11

1.0 Introduction

This report will analyze and discuss the particular case, Sony’s Sudden Samurai by Brian Bremmer. Problems/issues related to this case will be addressed to Sony Corporation. The report first presents Sony’s background, then the company’s problems and relevant theory.

1. Background of Sony

Sony is a global international company, founded in May 1947. The name, “Sony”, was an original brand name that was originally applied on Totsuko products. Chairman and CEO of the company is Howard Stringer. The major products of this company are audio, video, televisions, information and communications, semiconductors and electronic components. Company’s mission statement is to experience the joy of advancing and applying technology for the benefit of the public. (Sony Corporation 2008) The Sony Corporation engages 5 operating segments - electronics, games, entertainment, financial services and other. These make Sony one of the most comprehensive entertainment companies in the world. But for the last few years Company faced a downturn in their sales and profits. However Sony believes that through clever strategic management and diplomacy Corporation can overcome these difficulties and remain at the helm of the industry.

1.2 Problems

The main problem for Sony is slowing down of sales and profits in the last few years, because the current market in present time is much more competitive with less profit margins and lead-time for product innovation. Consequently change is needed in Sony. However, even with strategirial and structure change, the Sony spirit of innovation should remain intact...
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