Presentation for Northwestern University Product Design & Development Management master's program.

1. Justin Zupnick
MPD 400 - Intro to Product Design & Development
The thinking that
killed the Walkman.

2. Justin Zupnick
MPD 400 - Intro to Product Design & Development
“Free and open minded” entrepreneurial
spirit flourished under Sony’s co-founders
Masaru Ibuka & Akio Morita (Solis, 2013;
Tabuchi, 2012)
Embrace the
mystery.
PLAY.
EXPERIMENT.
DEVELOP FOR
UNREALIZED MARKETS.

3. “Don’t you think a stereo cassette player that you
can listen to while walking around is a good idea?”
Sony co-founder & Honorary Chairman Masaru
Ibuka wanted to listen to music on his long flights
across the Pacific Ocean.
He asked one of his engineers for a playback-only
stereo device to be hacked together.
The Sony Walkman launched within 4 months
product development time.
(Sony, n.d.)(Martin, 2009)

4. Justin Zupnick
MPD 400 - Intro to Product Design & Development
The Walkman as innovation
Launched July 1, 1979.
Sold for ¥ 30,000 (~$150 USD at the time)
(History.com, 2009)
Photo source: http://www.theverge.com/2014/7/1/5861062/sony-walkman-at-35
(Chiesa, 2009)
Sales Target Actual
After 2 years 1.5 million 2 million
After 5 years 7 million 10 million

5. The fall.
According to the New York Times (Tabuchi, 2012), Sony lost $6.4b in 2012 and share prices
declined to where they stood during peak Walkman years around the mid 1980s.
Jan 2000 – Sept 2016 (-76%)
Retrieved via Google Finance on September 23, 2016
Justin Zupnick
MPD 400 - Intro to Product Design & Development

6. Reliability thinking creeping in.
• Increase # of models, colors, options
• Technological substitution
• Follow the competition
• Brand exhaustion
Justin Zupnick
MPD 400 - Intro to Product Design & Development

7. Justin Zupnick
MPD 400 - Intro to Product Design & Development
CEO Nobuyuki Idei’s brought in a “tatewari” leadership style,
creating a vertical hierarchy, splitting up departments.
Provided incentives for top, older engineers to leave in order
to recruit younger talent. They took jobs with the competition.
Stringer continued thinking in the short-term with more
organizational streamlining and cost cutting. (Solis, 2013)
dividing vertically, vertical split, top-to-
bottom sectioning, division into
sections, splitting lengthwise
Definition from JapanDict
(retrieved from web, 2016)
tatewari
縦割り
Nobuyuki Idei , CEO 1999-2005 Howard Stringer, CEO 2005-2012
Heuristic protection mushroomed.
Engineers avoided collaboration leading to focus on
hardware over software.
Managers kept information locked & sealed.
User experience displayed no sense of unification.
(Harlan 2012)

8. (Franzen, 2014)

9. Beginning to solve the “mystery”
• Focus on new products and technologies. Accept that the company does not
need the Walkman brand to continue.
• Entrepreneurs in Japan are currently experiencing a lack of inspiration and
avoiding risky ventures (Fifield, 2016). Now is the time to dedicate funds for
incubating internal startups that will begin exploring high-risk “mysteries.”
• Break down department divisions and open up knowledge base to encourage
intersectional thought and collaboration.
• Unify the user experience at both hardware and software levels.
Justin Zupnick
MPD 400 - Intro to Product Design & Development

10. References
Chiesa, V., & Frattini, F. (2011). Commercializing Technological Innovation:
Learning from Failures in High-Tech Markets*. Journal of Product Innovation
Management, 28(4), 437–454. http://doi.org/10.1111/j.1540-5885.2011.00818.x
Fifield, A. (2016, June 22). Japanese entrepreneurs face a special challenge:
The 'wife block' Retrieved September 24, 2016, from
https://www.washingtonpost.com/world/asia_pacific/japanese-entrepreneurs-
face-a-special-challenge-the-wife-block/2016/06/21/1df476ca-324c-11e6-ab9d-
1da2b0f24f93_story.html
Franzen, C. (2014, July 01). The history of the Walkman: 35 years of iconic
music players. Retrieved September 24, 2016, from
http://www.theverge.com/2014/7/1/5861062/sony-walkman-at-35
Harlan, C. (n.d.). As Apple and dominate, Japan's tech giants are in a free fall.
Retrieved September 24, 2016, from
https://www.washingtonpost.comSamsung /world/as-apple-and-samsung-
dominate-japans-tech-giants-are-in-a-free-fall/2012/09/28/04c6eb36-0944-
11e2-afff-d6c7f20a83bf_story.html
Martin, R. L. (2009). The design of business: Why design thinking is the next
competitive advantage.
Solis, B. (2013, December 5). The Rise and Fall of Sony, Panasonic, and
Sharp and How to Survive Digital Darwinism - Brian Solis. Retrieved
September 24, 2016, from http://www.briansolis.com/2013/12/the-rise-and-fall-
of-sony-panasonic-and-sharp-and-how-to-survive-digital-darwinism/
Sony Corp (ADR). Retrieved September 24, 2016, from Google Finance
https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=m
aximized&chdeh=0&chfdeh=0&chdet=1474693352979&chddm=1641784&chls
=IntervalBasedLine&q=NYSE:SNE&&fct=big&ei=1QjmV_nDBoH12Ab6vaz4Dg
Sony Corporation Global Headquarters. "Promoting Compact Cassettes
Worldwide." Sony History. N.p., n.d. Web. 23 Sept. 2016.
Tabuchi, H. (2012). How the tech parade passed Sony by. The New York
Times.
The first Sony Walkman goes on sale. (2009). Retrieved September 24, 2016,
from http://www.history.com/this-day-in-history/the-first-sony-walkman-goes-
on-sale
Justin Zupnick
MPD 400 - Intro to Product Design & Development