Time Context: End of the fiscal year in March 2000
Viewpoint: Marketing Analyst
March, 2000 - Sony Corporation began to redesign itself as a forward-looking company in the network era of the 21st century.
Consolidated net sales in the given fiscal year: 6,687 billion yen
Operating income: 241 billion yen
Sony's market capitalization: 9.1 trillion yen
4th among the Japanese companies listed on the Tokyo Stock Exchange as of May 18 2001 (Top 3 companies- NTT Docomo, Toyota, and NTT)
On June 29, 2000 Sony appointed a new management team consisted of Nobuyuki Edei, Chairman and CEO, Kunitake Ando, President and COO, and Teruhisa Tokunaga, CFO.
History and Background
Strengths and Weaknesses
Critical Elements of the Product or Service featured in the case
_HISTORY AND BACKGROUND_
Sony was established in 1946 by Masaru Ibuka and Akio Morita as "Tokyo Tsushin Kogyo" which was then changed to Sony Corporation in 1958. Both Ibuka and Morita were keenly aware of the need to differentiate themselves from larger, more established competitors to avoid direct competition with them. The two had the goal to continuously develop innovative and "cutting edge" products.
Since the beginning, the Sony Corporation strove to create innovative products that had strong commercial appeal. Ibuka and Morita instilled the understanding that through distinctive research and development (R&D) and products, it would be possible for the company to offer new forms of lifestyle and enjoyment.
In the early days of Sony, because of failure to get assistance from some of Japan's largest global trading companies (GTCs) in selling Sony's transistor radios abroad, Sony chose to compete on its own through two main avenues: (1) on the basis of technological innovation, and (2) by pushing aggressively into overseas markets. While competitors centred its attention to domestic operations, Sony concentrated on American market for consumer electronic products and became one of the first Japanese firms to open an office in the U.S. in 1960 and one of the first to list its shares on the New York Stock Exchange in 1961. Sony completed its world network formation, Sony opened offices in other countries.
The superiority of Sony's Trinitron technology in 1968 helped the colour television market to expand and enjoyed a longer lead-time than the usual 18 months before competitors entered since technology was not released to other companies
Sony had its success and failure. Examples are Sony's Walkman and Video Cassette Recorder. Walkman was a combination of a small playback-only cassette tape player and lightweight headphones which made it an immediate success. Sony's Betamax format for the video cassette recorder lost out to Matsushita's and JVC's VHS format.
Such changes in organizational culture are inevitable for a company that seeks to operate internationally. For Sony, the challenges of staying globally competitive have indeed become more difficult to deal with. The need to be profitable and the fear of failure has made Sony vigilant in its attempt to reorganize the company's worldwide operations. The consequence of such changes has had a profound effect on Sony's organizational culture. The once family like atmosphere of the past will prove difficult if not impossible to maintain. The vast majority of Sony's worldwide employees are not Japanese.
They have not been part of the company's cultural network and history. Today, Sony is steadily transforming itself into a transnational media corporation where more and more emphasis is being given to the value of local autonomy and individual performance.
_STRENGTHS AND WEAKNESSES_
Sony has built a brand. This is highlighted by the fact that the company is known for its good reputation and high-quality products.
The company is synonymous with technological excellence and has a rich heritage of technological...
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