Report on Sonys Case Study

Major Question: Outline & A ; evaluate Sony ‘s strategic place at the terminal of the instance survey, including its direction alteration. What strategic alterations ( if any ) would you now recommend to Sony ‘s direction?

Minor Question: Analyse Sony ‘s resources, Capabilities & A ; Competencies as depicted in the instance, & A ; explain why it has grown successfully in the competitory consumer electronics industry. As an untypical Nipponese Corporation, Comment in the function played by Sony ‘s corporate Culture?

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This study is based on Sony Corporation. The study below is structured concentrating on the issues provided as inquiry for the Case survey in the seminar group. There is a brief History & A ; Culture followed by the SWOT Analysis & A ; Financial Analysis, followed by the direction alteration at Sony. Finally there are a few recommendation followed up with decision & A ; mentions. This instance survey was Robin John, from London South Bank University.

2. Recognition

We as a squad would wish to thank Robin John & A ; Dr. Leslie Gadman for their support and supplying first-class cognition about the subject, the instance survey and presentation feedback which has enabled us to present this study in acceptable signifier.


The Sony Corporation is now a $ 124 billion ( 2009 ) Company with about 180,500 employees ( 2008 ) . Sony was formed in 1946 by Masaru Ibuka & A ;

Akio Morita. It was ab initio know as Tokyo Tsushin Kogyo ; in English linguistic communication Tokyo Telecommunications Engineering Company. The name “ Sony ” was chosen as a scheme which would assist them to Globalize as the Co-Founder Morita had the vision to see early that there was a universe instead than pure Nipponese market for their Inventions. The first Sony-branded merchandise, the TR-55 transistor wireless, appeared in 1955 but the company name did n’t alter to Sony until January 1958.

The current Sony Corporation has a alone civilization which is steadfastly rooted in its history particularly in relationship to its two laminitiss, Ibuka and Morita. They both were masterminds above their concern endowments. Both gave penetrations and visions in what the company should do and how it should be made. Ibuka, particularly, gave changeless advice and suggestions to the applied scientists involved in undertakings from the earlier on transistor wirelesss to Walkmans. This created the umbrella scheme in which Sony operates under, where the top direction gives the general way in which the lower applied scientists actively learns, develops and improves on the vision/idea. Therefore, although there is a planned way, the existent merchandise development through launching is emergent with great flexibleness.

Although the research and development subdivision of Sony differs greatly from other companies with its great flexibleness, Sony, in its kernel is still a traditional Nipponese company in many ways. There is life-time employment, with strong norms and values which in bend create schemes through their actions. Status is given ( the crystal award ) alternatively of fillips ( non important sum ) for superior accomplishment. There is besides the strong senior status system such as the wise man and learner relationship that is typical of a Nipponese house. All this can be classified as the cultural school in which scheme formation is of corporate behavior. Corporate vision and emphasis on human resource, which is typical of many Nipponese, can be clearly seen in the mission statement “ Management Policies ” .

Sony Corp has retained good things of Nipponese Culture & A ; has n’t been loath to follow civilization which is non untypical Nipponese in nature, which has resulted in edifice these immense electronic giant & A ; prolong it for more than five decennaries, & A ; looks for a hereafter which is really bright.


Sony Corporation is considered one of the universe ‘s most successful companies, runing in the “ electronics, games, music, movies and fiscal services ” industry ( Hanson et al, 2001 ) . Sony is known for making “ merchandises that stimulate the senses and review the spirit ” ( Sony, 2007 ) . Efficaciously pull offing a combination of its resources, capablenesss and nucleus competences, has allowed Sony to make a strong sustainable competitory advantage.

Appraisal of Sony Corporation ‘s Resources and Capabilities

Sony Corporation is committed on its attempts to continuously develop original engineering that generates a high entreaty to the general public due to its quality and cost effectivity. Over the old ages, Sony Corporation has been able to construct a significant base meant to hike the company ‘s designing and fabrication capablenesss. This enables the company to convey to markets genuinely original and more significantly nomadic devices that are moderately priced. The research and development squad of Sony Corporation besides plays a important function in the accomplishment of this effort. The company besides believes that doing a positive impact in the society through their quality merchandises is the really kernel of being a maker.

Sony Corporation ‘s Competitive Advantage

Economies of Scale and Scope in fabrication and research and development originating from its legion installations situated in Japan, the United States and other states worldwide.

Unique Quality Technology owing to heavy accent on research

Sony Corporation ‘s committedness to research & A ; development activities has ever been one of its top schemes to stay competitory in the market.

Differentiated Merchandises

Through the production and selling of differentiated merchandises arising from their research and development activities, Sony Corporation is able to make its ain firm-specific advantages. The uninterrupted chase of research and development procedures enables Sony Corporation to bring forth a steady watercourse of originally differentiated merchandises which makes it hard for rivals to happen replacements. Because of this differentiated attack, Sony Corporation is able to market their merchandises worldwide, which enables them in bend to maximise the returns on research and development outgos. Sony Corporation ‘s competitory advantages could be sustained provided the company would go on to concentrate on its nucleus competences. However, the company besides has to be cognizant of the latest technological.

Sony Corporation ‘s Resources: Resources refer to “ factors that a company owns controls and utilizations for the intent of making value ” ( Hill et al, 2007 ) . Sony ‘s legion touchable and intangible resources help to find its typical competence, therefore taking to keeping a competitory advantage.

When placing Sony ‘s resources, both its tangible and intangible assets are included. “ Tangible resources include assets that are fiscal in nature, or have physical belongingss ” ( Hill et al, 2007 ) . In 2007, Sony recorded a gross revenues and runing hard currency flow of $ 70,303 million, an addition of 10.5 per centum from 2006 ( Sony United, 2007 ) , as portion of its fiscal resources. Land, edifices, machinery, and equipment are besides portion of Sony ‘s touchable resources, and are deserving about $ 14 million ( Sony United, 2007 ) .

“ Intangible resources include those non-physical assets that the company uses to bring forth goods or supply services, or expects to bring forth future productive benefits ” ( Hill et al, 2007 ) . The Sony trade name is considered “ one of the universe ‘s most recognizable and trusted trade names ” and was “ ranked 21st in the Business Week/Interbred list of the World ‘s 100 Most Valuable Brands with an estimated value of US $ 14 billion ” ( Singh et al, 2005 ) . The Sony trade name is associated with “ superior quality, invention and manner ” ( Sony United, 2007 ) , in the heads of its clients.

5. Sony ‘s SWOT Analysis.


Development of new engineering

Turning tendency & A ; client base ( Focus on BRIC Nations )

Target consistent profitableness in nucleus hardware concerns ( Television, game and digital imagination )

Diversify in game bring forthing for its hardware.

Listen to Voice of Customer.

Easy – to – usage merchandises.


New replacement merchandises emerging

Price competition.

Economic force per unit area.

Losing the laterality in cardinal merchandise classs. ( Television, P.S, D.I )

Due to hapless fiscal public presentation could hold less money for R & A ; D.


Strong gross revenues & A ; selling capablenesss

Business location or merchandise exclusivity

High quality merchandise

Excellent client service

Cost advantage ( Discount )

Good distribution web


Weak fiscal public presentation ( Low Profitability – Low ROCE )

Missing a client point of view

Merchandises with many characteristic but hard to utilize.

Lack of hit merchandises

Development of similar merchandises

Patent job in the whole Industry.



Millions of Hankering


Millions of Hankering

Entire Electronically Business

3,930,292 ( 69.4 % )

5,032,920 ( 65.1 % )


570,119 ( 10.1 % )

50,541 ( 0.6 % )


438,551 ( 7.7 % )

717,513 ( 9.3 % )


227,920 ( 4 % )

523,307 ( 6.8 % )


408,335 ( 7.2 % )

984,855 ( 12.7 % )


87,917 ( 1.6 % )

471,398 ( 5.5 % )

Entire Gross


7,729,993 ( +136.62 % )

6. Comparing Gross saless Revenue by Business

Area for 1997 & A ; 2009.





Gross saless


7,729,993 ( -12.87 % )

R & A ; D Expenses


497,297 ( -4.47 % )



171,300 ( -5.1 % )

Net income Margin

4.2 %

-1.3 %

R & A ; D to Gross saless

5.9 %

6.4 %

Current Ratio

1.25 clip

0.95 clip

Gearing Ratio

21.04 %

22.27 %

Tax return on Equity

16.4 %

-5.9 %


6.65 %

-2.13 %


Sony ‘s fiscal status is good but needs to be better for a full-blown Company like Sony which is in being since 1946 more than 6 decennaries. It is acceptable but should be a top precedence for the Management to do it better. Below mentioned are few observations:

Majority of its earning in electronic Industry.

Gaining from music has reduced well could be because of buccaneering issues or Late M.J ‘s bad public metropolis.

The best diversified merchandise is bet oning, so should look to diversify more in this country. ( Game MFG. )

Major job with SONY is its low profitableness.

Gearing ratio is 22.27 % which is good as has a range for future adoption if required.

R & A ; D has merely reduced by 4 %

ROCE & A ; Return for portion holders are major concern for SONY.

7. Manner of leading and direction

The leading manner of Akio Morita the co-founder of Sony Corporation included the ability to conceive of, design, implement and develop new merchandises, selling, trade name direction schemes and human resources accomplishment every bit good. Akio Morita resigned from the station of the Chairman, during which he positioned Sony as the universe ‘s most successful consumer electronics company. Sony was ranked 37 on the Fortune 500 planetary list. Under Morita ‘s leading, Sony developed many new merchandises and engineerings. One of the other cardinal success factors of Sony was Morita ‘s people accomplishments and his trust in his employees. Sony continued its tradition of offering advanced merchandises after Morita ‘s decease in 1999. Sony has been a modern Nipponese company as they have promoted immature Idei to President of Sony when he was 57 old ages little harmonizing to Nipponese criterion. It was under his leading that they have recovered from the 1995 crisis & A ; have posted the highest of all time net income. Idei besides launched Transformation 60 which was non of a much success. The chief intents of Transformation 60 were:

Reduce cost by 300 Billion Yen.

Decrease work force by 20000.

Achieve net income border of 10 % March 06.

By the early twenty-first century, Sony was confronting several jobs due to the lag in the planetary economic system, but so they recovered good under the leading of Sir Howard Stringer who was made the CEO & A ; Chairman of the Sony Corporation. A Non Nipponese to senior direction place was non a typical Nipponese civilization but has given them the coveted consequence.

So as a whole Sony Corporation has ever been under a good senior direction for all the old ages.

8. Recommendation

Building of Scheme: Sony as a much international company with major subdivisions in Europe and the United States and stocks listed in 23 stock exchanges, the Nipponese cultural school scheme is non sufficient. Becoming a mature company, the scheme should besides alter to more net income orientated. There should besides be greater accent on market portion, particularly in Japan where Sony ‘s market is shriveling. Strategy should be aimed at greater control and communicating between director and workers, particularly the applied scientists in the R & A ; D Department.

Diversification: One way which is possible is concentrating more on electronic cognize how in non-consumer concern. Presently, the purchaser has much more choosing power and competition is ferocious. The rivals are besides able to copy the merchandise in a much shorter clip. To make larger net income borders, Sony should concentrate on the concern sector and industries, providing high engineering equipment and parts. This would do full usage of the R & A ; D Department. Although the Sony name is frequently related to expensive, high-profit terminal of the market, the organisation should besides spread out its merchandise scope by offering lower priced, simpler featured merchandises that would vie caput on with others. With the lower priced line, Sony can besides increase its market portions in both abroad and Nipponese markets.

Alliance and Cooperation: Sony should seek to go a leader alternatively of a rebel. The difference is great, the leader, besides a great pioneer, should besides be a great coordinator. Internally, the different R & A ; D groups should collaborate more. The merchandise line should besides be made more compatible with one another, i.e. no more secret undertakings. Merchandises should be made with higher added value and longer life instead than doing frequent theoretical account alterations. This is besides a displacement from a manufacturer-orientated outlook to a consumer-orientated outlook, which is a manner to salvage natural resources. The brand-line compatibility besides builds trade name trueness for consumers.

Cost Film editing: Cost film editing is of import because R & A ; D plays an built-in portion in the success of Sony and can non be cut drastically although it gobbles up 10 % of gross revenues. Therefore, the lone manner to better net income borders is to cut cost. Sony is non to the full doing usage of other lower cost countries in the universe, particularly Asiatic states such as Malaysia, Thailand and the Philippines etc. By puting up mills in these states, Sony can take advantage of their inexpensive labor and besides acquire a head start in their budding consumer markets.

Merchandises should be refined alternatively of reinvented so that there would be less set up cost and greater mechanization could be achieved. This could besides be seen as a long term scheme.

Integration of production, design and selling: In many ways, planing and developing of a merchandise is separate from the production and selling. R & A ; D should listen more to what the consumer demands and so introduce alternatively of ever making new merchandise for markets. With great freedom, the planing squad should besides take on greater duty in doing the merchandise tantrum to the current production form and selling purposes. They should besides be made more responsible to the net income and loss of the peculiar merchandise. Empowering these three offprint groups creates struggle, but it besides brings these separate efficient groups together accomplishing synergism.

Execution: Internally, scheme should be reviewed get downing with regenerating the corporate ends. It should incorporate together both the Nipponese work ethic and its western opposite numbers. This is possible, because Sony is a transnational corporation with employees and clients in many different states. This involves composing the importance of net incomes and its duty to stockholders in the statement. Integration of the company, the designing, production and selling should be encouraged, with increased communicating between each group and the direction playing as affair and counsel. The direction should be supplying the organisation with specific ends and schemes for the short and long term. These alterations are intended to equilibrate concern Vs technology. Puting up confederations with fellow electronic makers / rival is important to common benefit so should be pursued every bit shortly as possible.

9. Decision.

The reputed trade name name is one the Sony ‘s strength, but on the other manus, many rivals start to see Sony as their mark and chief rival, which will bring down assorted menaces against Sony. Sony besides needs to concentrates on bettering itself.A They collect “ Voice of Customer ( VOC ) ” , which straight reflect the responses, outlooks or suggestions from end-users. It could be observed that Sony is positively covering with its rivals, through larning from failure and looking for room to farther better. Such scheme helps minimise the chances that their clients would turn to other rivals. It aims at retaining its present clients and maintaining their Number 1 market place.

Sony made full attempts to back up the environment from 1989. Sony is utilizing bluish ocean scheme on the concern. Toward this terminal, Sony has sponsored many bundle redesign undertakings and committed to sing the environment, non merely to make environmentally-friendly design but besides to cut down stuff usage. Due to this heartfelt client service, high-quality, dependable merchandises that Sony ‘s clients can utilize with assurance. At the terminal of this instance survey Sony is non in a really strong strategic place but it is besides non in a really bad strategic place. The place of Sony is in between.

The decision is that alteration is needed in Sony. However, even with strategically and construction alteration, the Sony spirit of “ Technovation ” ( technological Invention ) should stay integral because that is what made Sony grow and would do it remain strong.

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