Sony and future startegy

1. SYMBASCAPE - SONY
MBA EX (2013-15)
ABHISHEK RANJAN (36402)
ANIRUDDHA LOKRE (36404)
MANISH HIRVE (36416)
NILESH GOKHALE (36420)
SARVESH KOLHATKAR (36429)

3. Brief History
 The Origins of the SONY Brand:
The Sony name was created by combining "SONUS," the original Latin for "SONIC," meaning sound, with "SONNY," denoting small size, or a
youthful boy. It was chosen for its simple pronunciation that is the same in any language.
 In May’46, Tokyo Tsushin Kogyo K.K. (Tokyo Telecommunications Engineering Corporation), also known as Totsuko, established in
Nihonbashi, with start-up capital of 1,90,000 Yen for the research and manufacture of telecommunications and measuring equipment.
 In Oct’47 Successful commercialization and sales launch of Sony's “power megaphone.” First Product.
 In Mar’50, Japan's first magnetite-coated, paper-based recording tape, “Soni-Tape” launched.
 In 1955, Decision made to use SONY logo on Totsuko products & listed over Tokyo Stock Exchange (TSE).
 In 1958, Company name changed to Sony Corporation & Sony listed on the TSE.
 In 1960, World's first direct-view portable TV, Started operations in America
 In 1961, Sony became the first Japanese company to offer shares in the United States in the form of American Depositary Receipts (ADRs)
on the OTC market of the New York Stock Exchange.
 From 1962-1982, Expansion it’s operations in UK, Switzerland, Spain, France & various countries' & launched Varity of products such as
cassette recorder, VCR, Walkman, TV’s, CD player etc.
 Between 1983-1987, High definition video system (HDVS), Portable CD player, Camcorder, launched.
 In 19688, CBS Records Inc., the records group of CBS, acquired. It was renamed Sony Music Entertainment Inc. in January 1991.
 In 1994-95, Established It’s India operations, “Digital Handycam”, first consumer-use digital video camcorder is, launched.

4. Brief History (Continued..)
 In 1996- 2000, Chine operations started, launched products such as “Cybershot”, Home-use PC “VAIO” series, personal IT television “Airboard”
 In Apr’2001, Sony Bank established in Japan.
 In 2003, Sales launch of the world's first next-generation high capacity optical disc “Blu-ray Disc” recorder.
 In 2005, Sales launch of new “BRAVIA” brand HDTV-compatible flat-screen TVs.
 In 2006, Sony and Samsung reach agreement on manufacturing 8th generation amorphous TFT LCD panels at their joint venture, S-LCD Corporation.
 In 2007, Sony relocates headquarters to new building called "Sony City." , World's first OLED TV released.
 In 2009, HDR-XR520V and HDR-500V Handycam---World's first camcorder with new back-illuminated CMOS image sensor --- released, Sony Group unveils new brand
message "make. believe“
 In 2010,
 Sony opens “Sony 3D Technology Center,” located at Sony Pictures Studios in Culver City, California.
 Sony introduces Sony Internet TV, powered by Google TV —he world's first television with Google TV platform.
 Sony introduces Sony Internet TV, powered by Google TV —he world's first television with Google TV platform.
 Sony launches new digital music service---"Music Unlimited powered by Qriocity™“
 In 2011-14, Started facing tough competition & also made losses in some business.
 In 2014, Sony sells off PC business.
 Now Sony is coming up with New company for Visual products as SONY VISUAL PRODUCTS.

5. Executive Summery
Market Drivers
Restraints
• 70%+ of total electronics spending is linked to consumers including many systems classified as IT,
Communications, and other sectors.
• High-capability, interlinked devices driving their segments • Phones, tablets, notebooks, automotive
infotainment and networking, wireless industrial and medical • Drive revenue, profit, and systems
innovation
• Consoles Offer an Unparalleled Gaming Experience Compared to Other Competing Devices Such as
Tablets and Even Smart TVs
• The Expanding Set of Features for Media Playback, Especially, Streaming Content, Access to Live TV,
and Cloud Gaming Services Provide Momentum to this Market.
• Online Subscription Based Services Offered by all Three Leading Vendors who offer New Games or
Multiplayer Games on a Continuous Basis May Further Drive Consumers to Hold on to their Current
Generation Consoles.
• The key market participants are shifting focus to BRIC countries and emerging markets such as Africa,
Indonesia, Egypt, and so on.
• • Multi-sphere convergence is driving the market toward technological evolution
• Competition from Competing Devices and Online Gaming Services Discourages Consumers from Spending on
Expensive Gaming Consoles.
• Pricing Continues to be a Challenge for Manufacturers as well as Consumers.
• Lack of License to Content in Different Countries can be a Deterrent to Growth, as Consumers Increasingly Use
Gaming Consoles for Media Playback Purposes

7. Executive Summery – Key business Issues
 Reform of electronics business structure.
 Comprehensive transformational initiatives - implementation in core business.
 New technology development and measures for new business creation leading
to growth.
 Reform business structure and consolidate operating profit.
 Sony’s main strategic problem lies in its numerous product lines that serve too
many parts of the entertainment value chain.
 The “empire ” strategy not only caused the company’s innovation and
operation to slow down, but also impaired their competitiveness in all of the
market segments they are engaged in .

8. FUTURE
By 2050 autonomous humanoid would be
built which will win against human world
champion under the official regulation of
FIFA

9. Company Overview
Introduction
Sony founded on May 7th 1946 In
Tokyo, Japan. Revenue of 7.99T Yen.
Sony Corporation,
 Sony Pictures Entertainment
 Sony Computer Entertainment,
 Sony BMG Music Entertainment,
 Sony Mobile communications
 Sony Financial Holdings.

11. Institutional shareholders

12. Share of Sony's sales by segment in the 2013
and 2014 fiscal year
21.34%
13.01%
15.3%
10.85%
9.7%
7.71%
12.82%
6.59%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
Mobile Products & Communications
Financial Services
Home Entertainment & Sound
Pictures
Imaging Products & Solutions
Devices
Game
Music
Share of sales

13. Sony's revenue worldwide by segment fiscal
years 2012 to 2014 (in billion U.S. dollars)
5.85
13.38
15.83
8.2
10.72
9.65
12.06
10.58
11.35
6.18
7.8 8.05
7.16
7.77
7.2
9.65
9.03
7.717.57 7.52
9.51
4.16
4.7 4.89
0
2
4
6
8
10
12
14
16
18
2012 2013 2014
RevenueinbillionU.S.dollars
Mobile Products & Communications Financial Services
Home Entertainment & Sound Pictures
Imaging Products & Solutions Devices
Game Music
5.85
13.38
15.83
8.2
10.72
9.6512.06
10.58
11.35
6.18
7.8
8.05
7.16
7.77
7.2
9.65
9.03 7.71
7.57
7.52
9.51
4.16
4.7
4.89
0
10
20
30
40
50
60
70
80
2012 2013 2014
RevenueinbillionU.S.dollars
Mobile Products & Communications
Financial Services
Home Entertainment & Sound
Pictures
Imaging Products & Solutions
Devices
Game
Music

14. Example: Gaming
Market ShareUnit sales

15. PEER Analysis
(currency JPY)

16. Serious problems faced by SONY
 On the 26th April 2011, SONY announced that personal information had been
compromised on their Internet service delivery networks, the 'PlayStation
Network (PSN)'as well as image and music distribution service 'Qriocity'.
 A total number of 77 million users had their personal information such as user
name, ID and online password stolen.
 On 2nd May 2011, a second security breach happened with Other network
(SOE), and the compromised figure of data loss hit 24.6 million users, of which
12.3 million had their credit card information stolen.
 Shortly after, a third incident involving the loss of 2,500 users' names and
addresses took place, with the source of the leakage coming from the
electronics arm of SONY.
 Three security breaches in short time, collectively amounted to an
unprecedented figure of more than 100 million users having had their personal
information stolen. A world record of sorts in the history of data loss incidents.

17. What went Wrong
 Sony failed to ride some of the biggest waves of technological innovation in recent
decades: digitalization, a shift toward software and the importance of the Internet.
 Every sphere where the company competed from hardware to software to
communications to content, was turned topsy-turvy by disruptive new technology and
unforeseen rivals.
 With its catalog of music and foundation in electronics, Sony had the tools to create a
version of the iPod long before Apple introduced it in 2001.
 Lower-cost manufacturers from South Korea, China and elsewhere, meanwhile, are
increasingly undercutting Sony.
 Sony’s recent leaders have had trouble using authority over the sprawling company.
 Sony remains dominated by proud, territorial engineers who often shun cooperation. For
many of them, cost-cutting is the enemy of creativity — a legacy of Sony’s co-founders,
Mr. Morita and Masaru Ibuka, who tried to foster a culture of independence.

18. What went wrong continued……
 The company still makes a confusing catalog of gadgets that overlap or
even cannibalize one another.
 Sony makes too many models, and for none of them can they say, ‘This
contains our best, most cutting-edge technology, Apple, on the other
hand, makes one amazing phone in just two colors and says, ‘This is the
best’.

19. Financial Perspective
Strategic goals
Objectives Measures Target Initiative
Improve cost
structure
Actual cost Reduced By 3
bn
Reduce the
component
suppliers.
Revenue Growth Sales Volume Regain lost
sales revenue
Expand the
market for the
core products .
Performance Scorecard
Customer Perspective
Strategic goals
Objectives Measures Target Initiative
Provide
quality
products
Enhanced
software and
hardware
Advanced
speed, Battery
life, Create
more
applications
Engineer more
efficient
methodologies
Customer
Service
Customer
satisfaction
survey
90% Customer
satisfaction
Employ more
customer support
staff to improve
response time.
Internal Process Perspective
Strategic goals
Objectives Measures Target Initiative
Continue
developing
unique
innovative
products
Products in
industry
Develop a new
product every
year.
Release a new
product
version with
upgraded
software.
Environment
Friendly
Green house
gas elimination
from the
factory and
power
consumption
Reduce 30 %
Consumption
Reduce
Electricity use
and use
another
sources to
power the
factory.
Learning and growth
Strategic goals
Objectives Measures Target Initiative
Optimizati
on of
Employee
resources
Employees
hired to
output ratio
Decrease labour
cost by 5% but
maintain o/p
Better train
employees to
perform more.
Nurturing
engineerin
g and
managem
ent talent
Number of
employees
that rose
through the
sony carrier
chain
95% of top
management
and Eng team
MVP and other
acknowledge
ment awards
Sony Corporation
Vison and Mission

20. SWOT
SWOT
Strengths
• Strong corporate brand identity.
• Successful Umbrella brand strategy.
• Diversified geographic base.
• Research and Development abilities in
sync with future trends
• Valuable physical assets, good intangible
assets, and low production costs in general
• Innovation quality and distribution network..
Weaknesses
• Sony has weak financial sheets(low sales,
losses in the past)
• Weak marketing
• narrow product line.
• Weak in price competition.
• Overconfident
Opportunities
• Path breaking devices, gadgets, electronics
gaming, appliances.
• Untapped emerging market penetration .
• Network initiatives
• Image sensing and growth drivers bolstering
such as music, pictures
Threats
• Strong competition, losses to company
• Commoditization's for mobiles, devices
• Price and differentiation wars loosing
edge
• Other high quality replacements with
innovations.

21. SWOT For LG Electronics
SWOT
Strengths
1. Wide range of products to serve all categories and a strong
focus on technology and quality
2. Effective localization of product offerings for growth markets like
India, Brazil, China
3. Brand offers sound rational appeal – good product features and
good value for money
4. Good after sales service and wide distribution network
5. Subsidiaries enjoy independence in decision making and
hence have flexibility in adapting to the local market
6. Sponsorship of sports and entertainment events enhances
visibility.
Weaknesses
1. Brand lacks influence in the opinionated segment of early
adopters especially in the social media environment
2. Brand has limited market share compared to market leaders
Opportunities
1. Fast growth of home appliances, electronics goods market in
emerging economies
2. Convert improved brand image and awareness in to market
share
3. Increase the already Wide product portfolio
Threats
1. Price war with close Korean competitors like Samsung can
disrupt growth in price sensitive markets
2. Highly competitive industry dynamics
3. Stagnant urban demand
4. Instances of false green claims can erode brand value and
consumer trust

22. Financial Targets
FY 14

23. Financial Targets
FY 14

24. Financial Performance Indices

25. Capital Market Indicators

26. Capital Market Indicators

28. Strategic Alliance Strategy
 Outsourcing alliance
 Distribution alliance
 Supplier alliances
These can be considered as strategic alliances within rivals
Example Sony Group will extend their alliance with Toshiba to manufacture high-
performance LSI by using 45-nanometer bulk process technology
Cutting-edge semiconductors are core devices for the PlayStation platforms.
Regarding image sensors, Sony established Sony Semiconductor Yamagata
Technology Center as a new manufacturing hub, using the semiconductor
manufacturing facilities at Tsuruoka plant.

29. Key strategic choices
 Significant reduction of panel procurement costs, and the reduction of fixed costs related
to design and R&D.
 Accelerated shift to high value-added models
 Business management that emphasizes profitability, without necessarily pursuing volume
 Business management that grants each business unit greater autonomy and mandates a
focus on shareholder value
 Clearly defined positioning of each business within a broader business portfolio
perspective
 Particular emphasis on profitability over volume, securing business unit autonomy with a
focus on shareholder value and providing a clearer definition of each business unit's
position within Sony's overall business.

30. Business Reform Strategy

31. Strategy Recommendations/Observations
 Sony is positioning Devices, Game, Pictures, and Music as the segments
that will drive its profit growth.
 Implement growth measures and engage in aggressive capital investment
in areas such as Devices, Game & Network Services, Pictures, and Music
with the aim of achieving both sales growth and profit expansion.
 In Devices, Sony needs to further bolster its competitive edge in the area
of CMOS image sensors by investing to increase production capacity and
enhance R&D.
 As businesses capable of contributing stable profit, Sony will prioritize the
generation of steady profit and positive cash flow for Imaging Products &
Solutions and Video & Sound.

32. Strategy Recommendations/Observations
 Target certain areas within each market that are unlikely to experience
commoditization by continuing to offer new, high value-added products.
 Capitalize on its existing technological expertise rather than engaging in
large-scale investments, and optimize fixed costs inventory control.
 Place highest priority on curtailing risk and securing profits in its operation
of TV &mobile communication businesses. Since both markets are
experiencing intense cost competition and commoditization, strive to
further increase the added value of its products by leveraging its in-house
technologies.
 Last and more important carefully select the territories and product areas it
targets, seek to limit its capital investment and establish a business
structure capable of securing stable profits.

33. Thank You