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Juan
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I. VIEW POINT:
The companywas established in 1946 as TokyoTsushin Kogyo by Masaru Ibuka And AkioMorita.
Sony counted on Management geniuses such asIbuka, Morita, and Ohga for inspiration.
Nobuyuki Idei appointed a CEO in 1999 to 2005.
Gill will recommend solutions to the problem.
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II. TIME CONTEXT:
It was in March 2001 when Nobuyuki Idei andhis management team announced a new
structure.The new Global Hub would focus on overallmanagement strategy and would provide aunified global vision for the company.
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III. STATEMENT OF PROBLEMS:
MAIN PROBLEM:
Complete restructure of organizational system.
Sonysproblem in its diversity.
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CAUSES OF THE PROBLEM:
Skilled people left the company due to
insecurity. Lack of trust by investors.
No Innovation
To much focus on internet and
communication which left the electronicbusiness with few innovative products.
Its no longer clear what Sony really is allabout.
Sony did not invest in engineers.
Overconfident.
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IV. STATEMENT OF OBJECTIVES:
The long term objective of the company isto take back its first position in the marketin the in the electronic.
Short term objective would be to survive inthe tough environment
Sony should look to produce new productrather than upgrading the old ones.
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V. AREAS OF CONSIDERATION:
THREAT: Too many competitors in this industry
Competitors have new innovative products
and services Customer switching to the lower price
Investors shown NO interest
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OPPORTUNITIES:
Increasing differentiation of its products
for compensating its high pricesAn unfulfilled Customer needs
Creating new prices
Effort to search for cost-reductionopportunities
Arrival of new technology
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WEAKNESS:
Undifferentiated products with higher prices than
competitors Lack of innovation
To much product diversification
Inability to keep the talent
Missing some skills and talents Poor organizational structure
Poor leadership
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STRENGTH: Its long experience in the electronic
industry
High quality processes and procedures
Reputation
Proven skills in Key areas
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VI. ALTERNATIVE COURSES OF ACTION:
1. Increasing differentiation of the product byinnovation.
Advantages:
-able to retain the strong reputation
- New product will attract consumer
Disadvantages: -Higher research cost
-Not being sure of exact result of the innovation oncustomer demand
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2. Management must show trust with theiremployees.
Advantages:
- it will attract new talents as well as themiddle age people who brought greatnessto sony
Disadvantages: -
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3. Complete focus on Electronic, gaming andentertainment business.
Advantages:
-people will know what is sony all about
Disadvantage:
There will be less focus on the internet andcommunication and financial services whicheventually decline and company may suffersome loss
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VII. Strategy Formulation (Recommendation):
According to the advantages and disadvantagesof the alternatives, main factors for choosingthe best alternatives are: Innovation, cost,product image, organizational structure.
Therefore at1. Product development strategy- I recommend
sony to come with a unique product which givenew meaning to the people.
2. Make Culture a Priority- Negativity and fearare knocking people off balance. Its time toregroup, refocus, and unite them to create a
winning culture and team environment.
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VIII. Action Plans:
1. Improve a R & D (Research and Development)group which able to produce innovative products.
2. Hire fresh graduate and talented people from the
world
3. Provide security scheme to the employee such aslate retirement, additional benefits for newinnovation.
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IX. Potential Problem:
In implementing our alternative strategies may or maynot face to some obstacles that are unpredictable oruncontrollable such as:
1. Unpredictable changes in economy
2. Declining disposable income and consumerpurchase power
3. Unpredictable political changes
4. Lack of skilled employees
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X. Contingency PlanTo overcome those potential problems ifhappen, company should always follow its
continuous researches for finding newopportunities in field of:
Innovative products
Cost reduction (cost of raw material , labor
cost, marketing cost and ...) strategiesBuild strong relationship with employees