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SONY CORP. A CASE STUDY PREPARED BY: NIRAV DESAI (14030141023) MBA-IT 2014-16 COURSE: PRINCIPLES AND PRACTISE OF IT ENABLED MANAGEMENT INSTRUCTOR: PROF. SUPRATIK GHATAK (SYMBIOSIS INSTITUTE OF COMPUTER STUDIES AND RESEARCH)
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A CASE STUDY ON SONY CORPORATION

Jun 09, 2015

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A CASE STUDY ON SONY CORPORATION

  • 1. SONY CORP.A CASE STUDYPREPARED BY: NIRAV DESAI (14030141023) MBA-IT 2014-16COURSE: PRINCIPLES AND PRACTISE OF IT ENABLED MANAGEMENTINSTRUCTOR: PROF. SUPRATIK GHATAK (SYMBIOSIS INSTITUTE OF COMPUTER STUDIES AND RESEARCH)

2. TIMELINE [1]:YEAR MONTH EVENTS1946 MAY ESTD. BY THE NAME OF TOKYO TSUSHIN KOGYO (TOTSUKO)BY AKIOMORITA1950 JULY LAUNCHES G-TYPE, JAPANS FIRST MAGNETIC TAPE RECORDER1953 OCT CONCLUDES TRANSISTOR LICENSE AGREEMENT WITH WESTERN ELECTRIC1955 AUG LAUNCHES TR-55, JAPANS FIRST TRANSISTOR RADIO1958 JAN CHANGES THE COMPANY NAME TO SONY1960 FEB FOUNDS SONY CORPORATION OF AMERICA1960 MAY LAUNCHES WORLDS FIRST TRANSISTOR TELEVISION1961 JUNE ISSUES ADR (AMERICAN DEPOSITORY RECEIPTS) IN U.S.A.1963 JULY LAUNCHES WORLDS FIRST TRANSISTOR, COMPACT SIZE VCR1968 MAR FOUNDS CBS/SONY RECORDS WITH CBS (SONY MUSIC ENTERTAINMENT)1968 OCT LAUNCHES TRINITRON COLOR TV1971 OCT LAUNCHES INCH, U-MATIC VCR 3. TIMELINE (CONTD.) [1]:DATE MONTH EVENT1972 AUG COMMENCES OPERATION AT COLOR TV ASSEMBLY PLANT IN CALIFORNIA1975 MAY LAUNCHES HOME USE 1/2 INCH BETAMAX VCR1979 JULY LAUNCHES FIRST PERSONAL HEADPHONE STEREO WALKMAN1979 AUG FOUNDS SONY PRUDENTIAL LIFE INSURANCE1982 OCT LAUNCHES WORLDS FIRST CD PLAYER1982 NOV LAUNCHES BETACAM, A SINGLE UNIT, INCH, BRAODCAST USECAMERA1985 JAN LAUNCHES SINGLE UNIT 8MM VIDEO CAMERA1987 MAR LAUNCHES DIGITAL AUDIO TAPE (DAT)1989 APR LAUNCHES HIGH RESOLUTION, HIGH BAND SYSTEM 8MM VIDEO SERIES1989 JUNE LAUNCHES CCD-TR55 LIGHTWEIGHT COMPACT SIZE SINGLE UNIT 8MMVIDEO1989 NOV ACQUIRES COLUMBIA PICTURES1990 DEC LAUNCHES HD TRINITRON, 36 INCH, COLOR HDTV FOR HOME USE 4. TIMELINE (CONTD.) [1]:YEAR MONTH EVENT1991 OCT LAUNCHES KIRARA BASSO SERIES WITH SUPER TRINITRON PICTURE TUBE1992 NOV LAUNCHES MINIDISC SYSTEM1993 OCT LAUNCHES DIGITAL BETACAM SYSTEM, BROADCAST USE,COMPONENT DIGITAL VCR1993 NOV FOUNDS SONY COMPUTER ENTERTAINMENT1994 DECEMBER LAUNCHES PLAYSTATION I1996 MAY 50TH ANNIVERSARY OF SONY CORPORATIONREFERENCE [1]:The Sony Corporation: A Case Study in Transnational Media Managementby Richard A. Gershon, Western Michigan University, U.S.A.and Tsutomu Kanayama, Sophia University, JapanJMM The International Journal on Media Management Vol. 4 No. 2 : (105 117) 2002 5. ORGANISATIONAL STRUCTURE AND CORE BUSINESSES: [1] AUDIO EQUIPMENT: CD PLAYERS, MD SYSTEMS, DAT RECORDERS,STEREO COMPONENTS, CAR AUDIO, ETC. VIDEO EQUIPMENT: DVD PLAYERS, DIGITAL STILL CAMERAS,BROADCAST AND PROFESSIONAL USE VIDEO EQUIPMENT TELEVISIONS: TRINITRON AND WEGA COLOR TV TELEVISIONS, HDTVRELATED EQUIPMENT, PERSONAL LCD MONITORS, PROFESSIONAL USEMONITORS AND PROJECTORS INFORMATION: VAIO PERSONAL COMPUTERS, COMPUTERPERIPHERALS ELECTRONIC COMPONENTS: SEMICONDUCTORS, LCDs, CRTs,OPTICAL PICKUPS, BATTERIES 6. ORGANISATIONAL STRUCTURE AND CORE BUSINESSES: [1] MUSIC: SONY MUSIC ENTERTAINMENT INC. (SMEI) AND SONY MUSICENTERTAINMENT (JAPAN). COLUMBIA RECORDS, EPIC RECORDS ANDSONY CLASSICAL ARE SOME OF THE LABELS OWNED FILM: SONY PICTURES ENTERTAINMENT. IT CONSISTS OF COLUMIBATRISTAR MOTION PICTURE GROUP, COLUMBIA TRISTAR TELEVISIONGROUP AND SONY PICTURES DIGITAL ENTERTAINMENT GAMES: SONY COMPUTER ENTERTAINMENT. PLAYSTATION IS THEIRMAIN PRODUCT LINE HERE (PS4 LAUNCHED ON 15 NOVEMBER, 2013) INSURANCE: FINANCIAL SERVICES, AUTOMOBILE AND LIFEINSURANCE. 7. FINANCIAL PERFORMANCE [2]:3000002000001000000-100000-200000-300000-400000-500000Income and Revenue for SONY over last 4 yearsJan-11 Jan-12 Jan-13 Jan-14Operating Income Income after tax Net Income 8. CORE COMPETENCIES [3]: COLLECTIVE LEARNING IN THE ORGANISATION ESP. HOW TO CO-ORDINATEDIVERSE PRODUCTION SKILLS AND INTEGRATE MULTIPLESTREAMS OF TECHNOLOGIES SONYS CAPACITY TO MINIATURIZE: TO BRING MINIATURIZATION TOPRODUCTS, SONY MUST ENSURE THAT TECHNOLOGISTS, ENGINEERS ANDMARKETERS HAVE A SHARED UNDERSTANDING OF CUSTOMER NEEDSAND TECHNOLOGICAL POSSIBILITIES. CONTROL OVER CORE PRODUCTS IS CRITICAL TO SHAPE THE EVOLUTIONOF APPLICATIONS AND END MARKETS. SONY REDUCED EMPHASIS ON VCRS WHERE SOUTH KOREANS WEREMORE SUCCESSFUL. BETAMAX VIDEO RECORDING STANDARD WAS A DISASTER. SPENT MORE EFFORT ON THE 8MM CAMCORDER WHERE IT WAS NUMBER2 AFTER MATSUSHITA.REFERENCE [3]:The Core Competence of a CorporationPrahalad and HamelHarvar Business Review May-June 1990 (Also: HBR on Mc Kinsey Award Winners) 9. BUSINESS PROCESSES 1: TIME PACING [4] TIME PACING: A STRATEGY FOR COMPETING IN FAST CHANGINGUNPREDICTABLE MARKETS BY SCHEDULING CHANGE AT PREDICTABLETIME INTERVALS. SINCE INTRODUCTION OF THE WALKMAN IN 1979, SONY HAS RELEASEDKEY TECHNOLOGIES SUCH AS TAPE DRIVE MECHANISMS, HEADPHONES,BATTERIES, ETC. AT 1 PER YEAR. LAUNCHED 20 NEW MODELS PER YEAR IN JAPAN WHERE COMPETITION WAS STRONG, PACING WAS VERY RIGID.WHERE SONY HAS A POSITION OF STRENGTH, LESS VARIETY DUE TOSLOWER PACE. KEEPS MODELS IN MARKET PLACE LONGER THAN COMPETITORS. LAUNCHED THE WALKMAN SIMULTANEOUSLY IN EUROPE, USA ANDJAPAN.Reference [4]:Time Pacing Eisenhardt and BrowneHarvard Business Review March-April 1998Also: HBR on Managing Uncertainity 10. BUSINESS PROCESSES 2: MODULARITY [4] MODULARITY ALLOWED SONYS WALKMAN SERIES TO TIME PACE ONSCHEDULE. BASED ON HOW DIFFERENT CUSTOMER GROUPS USE THE WALKMAN,6 MODELS DESIGNED: PLAYBACK ONLY, PLAYBACK AND RECORD,PLAYBACK AND TUNER, PROFESSIONAL PLAYBACK, PROFESSIONALPLAYBACK AND RECORD AND SPORTS. STANDARD DESIGN ELEMENTS SUCH AS COLOR, STYLING ANDCOMPONENTS LIKE BATTERIES WERE ADDED. DEPENDING ON THE COMPETITIVE DYNAMICS IN THE MARKET, THECOMPANY COULD CHOOSE BETWEEN FASTER BUT PARTIAL RE-DESIGNOR A SLOWER BUT COMPLETE RE-DESIGN.Reference [4]:Time Pacing Eisenhardt and BrowneHarvard Business Review March-April 1998Also: HBR on Managing Uncertainity 11. BUSINESS PROCESSES 3: CO-EVOLUTION ANDPATCHING [5] CO-EVOLUTION IS THE METHOD OF MAKING SYNERGIES IN BUSINESSESWORK TOGETHER. SONY SCORED A HIT IN 1990S WITH MEN IN BLACK. AROUND SAMETIME, DISNEY CAME OUT WITH LION KING. THEY BOTH FOLLOWED VERYDIFFERENT STRATEGIES TO MARKETING. DISNEY USED SYNERGIES IN RETAIL AND SOLD LION KING THEMEDMERCHANDISE. SONYS MANAGERS WERE NOT ABLE TO PATCH THE BUSINESS ACROSS TOTHE RETAIL SIDE LIKE DISNEY. SONYS WALKMAN PRODUCTS DEPEND ON MEDIA CONTENT, BUTCUSTOMERS ARE UNWILLING TO LISTEN TO SONY-PRODUCED MUSIC JUSTBECAUSE THEY HAVE A WALKMAN. LONG DISTANCE RELATIONSHIPS BETWEEN MANAGERS FROM TOKYO TONEW YORK WERE DIFFICULT.Reference [5]: Co-evolving: At Last A Way To Make Synergies Work-Eisenhardt, GalvaniJan-Feb 2000: Harvard Business ReviewAlso: HBR on Organisational Learning 12. BUSINESS PROCESSES 5: BRANDING [6] SONY BRAND HOLDS CLEAR ADVANTAGE IN PRODUCT SUPERIORITY ANDMATCHES COMPETITORS LEVEL OF SERVICE. SONY USES A TOP DOWN APPROACH TO BRANDING. THEY BEGIN WITH AGLOBAL BRAND STRATEGY AND COUNTRY STRATEGIES FOLLOW FROMTHAT. THE COUNTRY BRAND TEAM HAS THE BURDEN TO JUSTIFY ANYDEPARTURES FROM THE GLOBAL BRAND STRATEGY. BRAND CHAMPION: A SENIOR EXECUTIVE OR A CEO WHO SERVES AS THEBRANDS PRIMARY ADVOCATE. A BRAND CHAMPION HAS CREDIBILITY AND RESPECT. LOGO OF SONY STANDS FOR HIGH LEVEL OF COMPETENCE, QUALITYAND CARE FOR DETAIL SHARED BY ALL THE PRODUCTS THAT ARE SOLDWITH THE SONY NAME.Reference [6]:The Lure of Global BrandingAaker and Joachimsthaler Nov-Dec 1999 Harvard Business ReviewAlso: HBR or Marketing 13. BUSINESS PROCESSES 6: MANAGING THE VALUECHAIN [7] SONY CORPORATION HAS ESTABLISHED MEGA STORES IN CITIES SUCHAS CHICAGO, LONDON AND TOKYO. SONY AUTHORISED SERVICE CENTERS AND SHOW ROOMS CAN BESEEN IN MOST MAJOR CITIES IN INDIA. 1994 SONY ANNOUNCED MEASURES FOR LEAN MANUFACTURING. NO NEW MAJOR INNOVATIONS ANNOUNCED. THIS MARKED ASIGNIFICANT SHIFT IN THE STRATEGY FOR SONY. FOR RETAILING DVDS THROUGH BLOCKBUSTER, SONY DEVELOPED AREVENUE SHARING AGREEMENT WHERE IN THE DVDS ARE SOLD TOSTORE OWNERS FOR A MEAGRE $3 AND 50% OF THE REVENUES ARECOLLECTED BY SONY TRISTAR PICTURES.Reference [7]:From Lean Production to Lean Enterprise: Womack and JonesMarch-April 1994 Harvard Business ReviewAlso: HBR on Managing the Value Chain 14. BUSINESS PROCESSES 6: SUPPLY CHAINMANAGEMENT[8] WHEN MICROSOFT DECIDED TO ENTER THE VIDEO GAME MARKET, ITCHOSE TO OURSOURCE HARDWARE PRODUCTION TO SINGAPOREBASED FLEXTRONICS IN EARLY 2001. FLEXTRONICS OUTSOURCED MANUFACTURING TO HIGH WAGE ANDHIGH SKILLED ECONOMIES IN MEXICO AND HUNGARY. XBOX WAS FIRST TO LAUNCH IN 2001 AND GOT A GOOD HEADSTART. THEREAFTER, SONY OFFERED DEEP DISCOUNTS ON THE PS2 GAMINGCONSOLE. FLEXTRONICS SHIPPED ALL MANUFACTURING TO CHINA TO FURTHERCUT COSTS AND REDUCE THE OFFERED PRICE OF XBOX. BY 2003, XBOX HAD ARRESTED 20% SHARE OF THE VIDEO GAMEMARKET FROM PS2.Reference [8]: The Triple A Supply Chain: Lu October 2004Harvard Business ReviewAlso: HBR on Supply Chain Management

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