sony ppt

Business News Analysis

Sony Corporation

Presented by-Neha UpadhyaySubhash ReddySatheesh Kumar

NEWS

• Sony Suffers $5.7-bn Loss, Sees Turnaround – Economic Times (11th May)

• Sony posts a record loss, vows 2012 profit – aggressive cost-cutting and top-to-bottom reorganization.

- Los Angeles Times (10th May)

SONY

Key People

Sir Howard Stringer (Chairman)

Kazuo Hirai (President & CEO)

Ryōji Chūbachi (Vice Chairman)

Products

Electronics,

video games,

mass media,

broadcasting and cable,

music and entertainment

telecommunication,

digital distribution

Products

Services Financial services,

insurance,

banking,

credit finance &

advertising agency.

Current Status

Total sales drop – 9.6 %

Loss - $ 5.6 bn

Previous year loss - $ 3.2 bn

Sales drop in LCD, DG cam, PC & gaming

products – 18.5 % which makes half of

sony’s revenue

Current Status

Music business plunged to $ 5.4 bn from $

5.7 bn.

Operating profit reduced to $ 450 million

from $475 million.

Share price as on were 10th may ¥1203

yen touching 25 year low price.

SONY’s StrategyKazuo Hirai, Sony's new chief executive, has

promised to make "unavoidable, painful

choices" to fix or dispose of poorly performing

divisions telling "Sony will change.“ to

investors.

Cost cutting &

Restructuring

Cost Cutting

Restructuring

Act of reorganizing the

• Legal,

• Ownership,

• Operational, or

• Other structures of a company for the

purpose of making it more profitable.

Steps Of Restructuring

1. enough liquidity to operate during

implementation

2. produce accurate working capital forecasts

3. provide open and clear lines of

communication with creditors

4. update detailed business plan and

considerations

Characteristics of restructuring

• Cash management and cash generation

during crisis

• Retention of corporate management

sometimes "stay bonus" payments or

equity grants

Characteristics of restructuring

• Moving of operations such as manufacturing to

lower-cost locations

• Reorganization of functions such as sales,

marketing, and distribution

• Renegotiation of labor contracts to

reduce overhead

• Refinancing of corporate debt to reduce interest

payments

Characteristics of restructuring

• Sale of underutilized assets,

• Outsourcing of operations such as payroll and

technical support

• A major public relations campaign to reposition the

company with consumers

• Improving the efficiency and productivity through new

investments, R&D and business engineering.

Restructuring In Sony

• Sony to sell its full stake in LCD join

venture with Samsung Electronics worth

$940 million.

• Sony to outsource LCD panel.

• Sony acquired Ericsson's stake in Sony

Ericsson in January 2012

Analysis• For the last three years, Sony has lost

399.3 billion yen ($5.1 billion) due to competition.

• In September 2000 Sony had a market capitalization of $100 billion; but by December 2011 it had plunged to $18 billion.

• In May 2012, Sony shares are valued at about $15 billion i.e. just 3 percent of rival Apple Inc.