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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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Nirav Desai

A CASE STUDY ON SONY CORPORATION
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Page 1: A CASE STUDY ON SONY CORPORATION

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)

Page 2: A CASE STUDY ON SONY CORPORATION

TIMELINE [1]:

YEAR MONTH EVENTS

1946 MAY ESTD. BY THE NAME OF TOKYO TSUSHIN KOGYO (TOTSUKO)BY AKIO MORITA

1950 JULY LAUNCHES ‘G-TYPE’, JAPAN’S FIRST MAGNETIC TAPE RECORDER

1953 OCT CONCLUDES TRANSISTOR LICENSE AGREEMENT WITH WESTERN ELECTRIC

1955 AUG LAUNCHES ‘TR-55’, JAPAN’S FIRST TRANSISTOR RADIO

1958 JAN CHANGES THE COMPANY NAME TO SONY

1960 FEB FOUNDS SONY CORPORATION OF AMERICA

1960 MAY LAUNCHES WORLD’S FIRST TRANSISTOR TELEVISION

1961 JUNE ISSUES ADR (AMERICAN DEPOSITORY RECEIPTS) IN U.S.A.

1963 JULY LAUNCHES WORLD’S FIRST TRANSISTOR, COMPACT SIZE VCR

1968 MAR FOUNDS CBS/SONY RECORDS WITH CBS (SONY MUSIC ENTERTAINMENT)

1968 OCT LAUNCHES ‘TRINITRON’ COLOR TV

1971 OCT LAUNCHES ¾ INCH, U-MATIC VCR

Page 3: A CASE STUDY ON SONY CORPORATION

TIMELINE (CONTD.) [1]:

DATE MONTH EVENT

1972 AUG COMMENCES OPERATION AT COLOR TV ASSEMBLY PLANT IN CALIFORNIA

1975 MAY LAUNCHES HOME USE 1/2 –INCH ‘BETAMAX’ VCR

1979 JULY LAUNCHES FIRST PERSONAL HEADPHONE STEREO ‘WALKMAN’

1979 AUG FOUNDS SONY PRUDENTIAL LIFE INSURANCE

1982 OCT LAUNCHES WORLD’S FIRST CD PLAYER

1982 NOV LAUNCHES ‘BETACAM’, A SINGLE UNIT, ½ INCH, BRAODCAST USE CAMERA

1985 JAN LAUNCHES SINGLE UNIT 8MM VIDEO CAMERA

1987 MAR LAUNCHES DIGITAL AUDIO TAPE (DAT)

1989 APR LAUNCHES HIGH RESOLUTION, HIGH BAND SYSTEM 8MM VIDEO SERIES

1989 JUNE LAUNCHES ‘CCD-TR55’ LIGHTWEIGHT COMPACT SIZE SINGLE UNIT 8MM VIDEO

1989 NOV ACQUIRES COLUMBIA PICTURES

1990 DEC LAUNCHES ‘HD TRINITRON’, 36 INCH, COLOR HDTV FOR HOME USE

Page 4: A CASE STUDY ON SONY CORPORATION

YEAR MONTH EVENT

1991 OCT LAUNCHES ‘KIRARA BASSO’ SERIES WITH SUPER TRINITRON PICTURE TUBE

1992 NOV LAUNCHES MINIDISC SYSTEM

1993 OCT LAUNCHES ‘DIGITAL BETACAM’ SYSTEM, BROADCAST USE, COMPONENT DIGITAL VCR

1993 NOV FOUNDS SONY COMPUTER ENTERTAINMENT

1994 DECEMBER

LAUNCHES PLAYSTATION I

1996 MAY 50TH ANNIVERSARY OF SONY CORPORATION

TIMELINE (CONTD.) [1]:

REFERENCE [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

Page 5: A CASE STUDY ON SONY CORPORATION

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, HDTV RELATED EQUIPMENT, PERSONAL LCD MONITORS, PROFESSIONAL USE MONITORS AND PROJECTORS

INFORMATION: VAIO PERSONAL COMPUTERS, COMPUTER PERIPHERALS

ELECTRONIC COMPONENTS: SEMICONDUCTORS, LCDs, CRTs, OPTICAL PICKUPS, BATTERIES

Page 6: A CASE STUDY ON SONY CORPORATION

ORGANISATIONAL STRUCTURE AND CORE BUSINESSES: [1]

MUSIC: SONY MUSIC ENTERTAINMENT INC. (SMEI) AND SONY MUSIC ENTERTAINMENT (JAPAN). COLUMBIA RECORDS, EPIC RECORDS AND SONY CLASSICAL ARE SOME OF THE LABELS OWNED

FILM: SONY PICTURES ENTERTAINMENT. IT CONSISTS OF COLUMIBA TRISTAR MOTION PICTURE GROUP, COLUMBIA TRISTAR TELEVISION GROUP AND SONY PICTURES DIGITAL ENTERTAINMENT

GAMES: SONY COMPUTER ENTERTAINMENT. PLAYSTATION IS THEIR MAIN PRODUCT LINE HERE (PS4 LAUNCHED ON 15 NOVEMBER, 2013)

INSURANCE: FINANCIAL SERVICES, AUTOMOBILE AND LIFE INSURANCE.

Page 7: A CASE STUDY ON SONY CORPORATION

FINANCIAL PERFORMANCE [2]:

Jan-11 Jan-12 Jan-13 Jan-14

-500000

-400000

-300000

-200000

-100000

0

100000

200000

300000

Income and Revenue for SONY over last 4 years

Operating Income Income after tax Net Income

Page 8: A CASE STUDY ON SONY CORPORATION

CORE COMPETENCIES [3]: COLLECTIVE LEARNING IN THE ORGANISATION ESP. HOW TO CO-

ORDINATE DIVERSE PRODUCTION SKILLS AND INTEGRATE MULTIPLE STREAMS OF TECHNOLOGIES

SONY’S CAPACITY TO MINIATURIZE: TO BRING MINIATURIZATION TO PRODUCTS, SONY MUST ENSURE THAT TECHNOLOGISTS, ENGINEERS AND MARKETERS HAVE A SHARED UNDERSTANDING OF CUSTOMER NEEDS AND TECHNOLOGICAL POSSIBILITIES.

CONTROL OVER CORE PRODUCTS IS CRITICAL TO SHAPE THE EVOLUTION OF APPLICATIONS AND END MARKETS.

SONY REDUCED EMPHASIS ON VCRS WHERE SOUTH KOREANS WERE MORE SUCCESSFUL.

BETAMAX VIDEO RECORDING STANDARD WAS A DISASTER.

SPENT MORE EFFORT ON THE 8MM CAMCORDER WHERE IT WAS NUMBER 2 AFTER MATSUSHITA.REFERENCE [3]:

The Core Competence of a Corporation Prahalad and Hamel Harvar Business Review May-June 1990 (Also: HBR on Mc Kinsey Award Winners)

Page 9: A CASE STUDY ON SONY CORPORATION

BUSINESS PROCESSES 1: TIME PACING [4]

TIME PACING: A STRATEGY FOR COMPETING IN FAST CHANGING UNPREDICTABLE MARKETS BY SCHEDULING CHANGE AT PREDICTABLE TIME INTERVALS.

SINCE INTRODUCTION OF THE WALKMAN IN 1979, SONY HAS RELEASED KEY 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 TO SLOWER PACE.

KEEPS MODELS IN MARKET PLACE LONGER THAN COMPETITORS.

LAUNCHED THE WALKMAN SIMULTANEOUSLY IN EUROPE, USA AND JAPAN.

Reference [4]:Time Pacing –Eisenhardt and BrowneHarvard Business Review March-April 1998Also: HBR on Managing Uncertainity

Page 10: A CASE STUDY ON SONY CORPORATION

BUSINESS PROCESSES 2: MODULARITY [4]

MODULARITY ALLOWED SONY’S WALKMAN SERIES TO TIME PACE ON SCHEDULE.

BASED ON HOW DIFFERENT CUSTOMER GROUPS USE THE WALKMAN, 6 MODELS DESIGNED: PLAYBACK ONLY, PLAYBACK AND RECORD, PLAYBACK AND TUNER, PROFESSIONAL PLAYBACK, PROFESSIONAL PLAYBACK AND RECORD AND SPORTS.

STANDARD DESIGN ELEMENTS SUCH AS COLOR, STYLING AND COMPONENTS LIKE BATTERIES WERE ADDED.

DEPENDING ON THE COMPETITIVE DYNAMICS IN THE MARKET, THE COMPANY COULD CHOOSE BETWEEN FASTER BUT PARTIAL RE-DESIGN OR A SLOWER BUT COMPLETE RE-DESIGN.

Reference [4]:Time Pacing –Eisenhardt and BrowneHarvard Business Review March-April 1998Also: HBR on Managing Uncertainity

Page 11: A CASE STUDY ON SONY CORPORATION

BUSINESS PROCESSES 3: CO-EVOLUTION AND PATCHING [5]

CO-EVOLUTION IS THE METHOD OF MAKING SYNERGIES IN BUSINESSES WORK TOGETHER.

SONY SCORED A HIT IN 1990S WITH ‘MEN IN BLACK’. AROUND SAME TIME, DISNEY CAME OUT WITH ‘LION KING’. THEY BOTH FOLLOWED VERY DIFFERENT STRATEGIES TO MARKETING.

DISNEY USED SYNERGIES IN RETAIL AND SOLD LION KING THEMED MERCHANDISE.

SONY’S MANAGERS WERE NOT ABLE TO PATCH THE BUSINESS ACROSS TO THE RETAIL SIDE LIKE DISNEY.

SONY’S WALKMAN PRODUCTS DEPEND ON MEDIA CONTENT, BUT CUSTOMERS ARE UNWILLING TO LISTEN TO SONY-PRODUCED MUSIC JUST BECAUSE THEY HAVE A WALKMAN.

LONG DISTANCE RELATIONSHIPS BETWEEN MANAGERS FROM TOKYO TO NEW YORK WERE DIFFICULT.

Reference [5]: Co-evolving: At Last A Way To Make Synergies Work-Eisenhardt, Galvani Jan-Feb 2000: Harvard Business ReviewAlso: HBR on Organisational Learning

Page 12: A CASE STUDY ON SONY CORPORATION

BUSINESS PROCESSES 5: BRANDING [6]

SONY BRAND HOLDS CLEAR ADVANTAGE IN PRODUCT SUPERIORITY AND MATCHES COMPETITORS LEVEL OF SERVICE.

SONY USES A TOP DOWN APPROACH TO BRANDING. THEY BEGIN WITH A GLOBAL BRAND STRATEGY AND COUNTRY STRATEGIES FOLLOW FROM THAT.

THE COUNTRY BRAND TEAM HAS THE BURDEN TO JUSTIFY ANY DEPARTURES FROM THE GLOBAL BRAND STRATEGY.

BRAND CHAMPION: A SENIOR EXECUTIVE OR A CEO WHO SERVES AS THE BRANDS PRIMARY ADVOCATE.

A BRAND CHAMPION HAS CREDIBILITY AND RESPECT.

LOGO OF SONY STANDS FOR HIGH LEVEL OF COMPETENCE, QUALITY AND CARE FOR DETAIL SHARED BY ALL THE PRODUCTS THAT ARE SOLD WITH THE SONY NAME.

Reference [6]:The Lure of Global BrandingAaker and Joachimsthaler Nov-Dec 1999 Harvard Business ReviewAlso: HBR or Marketing

Page 13: A CASE STUDY ON SONY CORPORATION

BUSINESS PROCESSES 6: MANAGING THE VALUE CHAIN [7] SONY CORPORATION HAS ESTABLISHED MEGA STORES IN

CITIES SUCH AS CHICAGO, LONDON AND TOKYO.

SONY AUTHORISED SERVICE CENTERS AND SHOW ROOMS CAN BE SEEN IN MOST MAJOR CITIES IN INDIA.

1994 SONY ANNOUNCED MEASURES FOR LEAN MANUFACTURING.

NO NEW MAJOR INNOVATIONS ANNOUNCED. THIS MARKED A SIGNIFICANT SHIFT IN THE STRATEGY FOR SONY.

FOR RETAILING DVDS THROUGH BLOCKBUSTER, SONY DEVELOPED A REVENUE SHARING AGREEMENT WHERE IN THE DVDS ARE SOLD TO STORE OWNERS FOR A MEAGRE $3 AND 50% OF THE REVENUES ARE COLLECTED 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

Page 14: A CASE STUDY ON SONY CORPORATION

BUSINESS PROCESSES 6: SUPPLY CHAIN MANAGEMENT[8] WHEN MICROSOFT DECIDED TO ENTER THE VIDEO GAME MARKET, IT

CHOSE TO OURSOURCE HARDWARE PRODUCTION TO SINGAPORE BASED FLEXTRONICS IN EARLY 2001.

FLEXTRONICS OUTSOURCED MANUFACTURING TO HIGH WAGE AND HIGH 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 GAMING CONSOLE.

FLEXTRONICS SHIPPED ALL MANUFACTURING TO CHINA TO FURTHER CUT COSTS AND REDUCE THE OFFERED PRICE OF XBOX.

BY 2003, XBOX HAD ARRESTED 20% SHARE OF THE VIDEO GAME MARKET FROM PS2.

Reference [8]: The Triple A Supply Chain: Lu October 2004Harvard Business ReviewAlso: HBR on Supply Chain Management