The case discusses the organizational restructuring carried out by Sony Corporation. In the discussion we briefly walkthrough of the restructuring between 1994 and 2003 to give a historical view how restructuring come in place in 2005 that bringing up by Stringer. Strategy and outcome of the restructuring plan will be discussed and the progress of the improvement by implementing the 2005 restructuring is positive. In fiscal year 2007 and 2008 healthy financial has reported. This shows that the effort of 2005 restructuring plan is sufficient to improvement the company performance. But in late 2008 Sony face a drastic drop by looking into the financial report and Stringer has announced to have another restructuring in 2009. Sony has several restructuring and this shows that the sustainable level is low and the reputation and influences level for the young generation is weak comparing to Apple and Samsung which is now leading the industry. Suggest Sony to invest in green technology and come out with innovative products as the current young generation focus a lot in “go green” concept and it has become a trend in the market.
Table of Contents
Table of Contents
Restructuring and Strategy
From 1994 to 2003
From 2005 to 2008
The Outcome of 2005 restructuring plan
The Outcome of 2009 restructuring plan
Sony Corporation is also known as Sony, it is one of the most popular electronic companies worldwide. Sony is founded in Japan during World War II in 1946 by Masaru Ibuka and Akio Morita, original name was Tokyo Telecommunications Engineering Corporate and in 1958 it has officially changed the name to Sony Corporate. Sony started to expand their business by entering US market in 1960, eight years later Sony open their branch in United Kingdom. Sony continued to grow into Spain and France market in 1973 and started their German operation in 1986 (Wernertelt, 1984). Sony introduce their innovative technologies from the tape player to the walkman to OLED TV, Sony's tradition of innovation has made it a profitable company for more than 60 years. As of March 2009, Sony employed more than 171,000 people. The company's annual revenue in 2009 was almost $8 billion, with almost $1.5 billion in profit. In July 2009, Howard Stringer was the company's chairman, CEO and president. The company remains headquartered in Tokyo and has almost 100 affiliated companies outside Japan.
Sony is facing some problem in dysfunctional corporate culture and lack of innovation, Sony brand start to loses meaning and becoming a fine but not a distinctive player in the electronics world because Sony carry their brand name in both high-end and low-end products. While diversifying into too many business segments, the consumer electronics giant has shifted its focus from its core competency and this has resulted in a distortion in Sony's brand. Sony's online network also faces threats from hackers. The company's PlayStation network was hacked, resulting in leakage of customer information, such as credit-card data. Sony hasn’t made a profit since 2008, the company is now worth one ninth of Samsung and one thirtieth of Apple. Sony comes out with the latest turn-around plan and the first thing in the plan is to rebuild the Sony brand, doing so in a way that makes it unique and special, The “all things electronic to all people”, but the outcome hasn’t worked out too well. In May 2009, Sony announced that it posted its full year operating lost since 1995 and the annual lose of ¥ 98.9 billion, with annual sales going down by 12.9% to ¥ 7.73 trillion.
2. Restructuring and Strategy
3.3. From 1994 to 2003
Sony have a lot of restructuring between year 1994...
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