INTERNATIONAL BUSINESS

SALONI NANDA BBA 4519/09 SHUBHI SINGH BBA 4530/09

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COMPANY AT A GLANCE
Founded : May 7, 1946

Headquarters : Konan, Minato-ku, Tokyo, Japan Chairman, CEO and President : Howard Stringer Vice Chairman : Employees : Ryoji Chubachi 167,900 (as of March 2011)
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FACTS ABOUT SONY

Multinational conglomerate corporation headquartered in Mintao (Japan)

One of leading manufacturers of electronics, video, communications, video game consoles and information technology products for the consumer and proffesional markets;

Sony is among the Worldwide Top 20 Semiconductor Sales Leaders

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SONY OPERATIONS WORLDWIDE

Areas of Operation

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Affiliated Companies (Japan)

Sony Bank Inc. Sony Broadband Solutions Corporation Sony Broadcast Media Co., Ltd Sony Chemical & Information Device Corporation Sony Computer Entertainment Inc. Sony Computer Science Laboratories, Inc., Sony Digital Network Applications Inc. Sony Disc & Digital Solutions Inc. Sony Music Entertainment (Japan) Inc.

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Affiliated Companies (Outside Japan)

Sony de Mexico S.A. de C.V. Sony Deutschland G.m.b.H. Sony Device Technology (Thailand) Co., Ltd. Sony Electronics Asia Pacific Pte Ltd. Sony Electronics Inc. Sony (China) Limited Sony Electronics (Singapore) Pte. Ltd. Sony Korea Corporation Sony Corporation of Hong Kong Ltd. Sony Latin America Inc. Sony Magnetic Products Inc. of America Sony Malaysia Sdn. Bhd. Sony Corporation of Hong Kong Ltd. Sony Corporation of Panama, S. A.

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MOST POPULAR SONY PRODUCTS

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Evolution of Famous SONY Products (Television)

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Evolution of Famous SONY Products Audio)

(Personal

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List Of Acquisition by SONY Corporation

Number Acquisition date Company Business Country Value (USD) Used as / Integrated with

21 20 19

March 2, 2010 February 10, 2010

Media Molecule iCyt Mission Technology

Video Game

UK

Sony Computer Entertai

flow cytometers USA

January 28, 2010 Convergent Media Systems Corporation Video IntegrationUSA

18

July 2, 2008 September 20, 2007 September 20, 2007 May 15, 2007 May 30, 2007 August 23, 2006

Gracenote

Media Management USA

U$260,000,000

17 16 15 14 13 12

Bigbig Studios Evolution Studios

Video Game Video Game

UK UK USA

Sony Computer Entertai

Sony Computer Entertai

Sigil Games Online Inc Video Game Famous Music

Sony Online Entertainme

Music publishing USA

U$370,000,000 Sony/ATV U$65,000,000

Grouper Networks Video On Demand USA Video Game USA

/ Crackle 23/1

January 25, 2006 Zipper Interactive

Sony Computer Entertai

CONTINUED..
11 December 7, 2005 September 27, 2002 August 7, 2002 July 9, 2002 Guerrilla Games Video Game NED

Sony Computer Ent

10 9 8 7 6

Aiwa Incognito Entertainment Acuff Rose

Electronics Video Games Music Publishing Video Game Video Game

JPN USA USA USA USA U$157,000,000

Sony Electronics

Sony Computer Ent Sony/ATV

January 22, 2001 Naughty Dog ? 2000 Eidetic Games

Sony Computer Ent Sony Bend

5 4 3 2 1

May 21, 1993 September 29, 1989 September 28, 1989 November 19, 1987

Psygnosis Limited

Video Game

USA U$200,000,000 U$3,400,000,000

SCE Studio Liverpo

Guber-Peters EntertainmentMovies/Television USA Company Columbia Pictures Entertainment Movies/Television USA CBS Record Group Music USA

Sony Pictures Ente

Sony Pictures Ente

4 23 U$2,000,000,000 /Sony Music Enterta / 12

N/A

February 4, 1982 Music Center Incorporated Professional audio USA

Sony Professional P

SONYS TRIPOD FOR SUCCESS

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PLANNING STRATEGIES

Step by step methodological approaches Find out potential capabilities & local distribution channels Brand name is a key factor in the international market Learning the cultures and attitudes of the intended market segment
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ORGANIZING STRATEGIES

A dedicated department formed to handle the affairs on international development Adaptability to the culture, styles, origins are vital to the growth of the company To identify the most appropriate individual for each task, when allocating human resources Proper training at the domestic markets
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LEADING STRATEGIES

Diagnosing, or gaining insight into the situation a manager is trying to influence Adapting individual behavior and resources to meet the needs of the situation Communicating in a way which others can understand and accept

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CONTROLLING STRATEGIES

Control over every stage of the process that is before, during and after Employees are trained to provide feedback to the mother company regularly Employees are trained to send their feedback to the company even though sometimes it is limited to one way communications
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PESTLE ANALYSIS

A.

POLITICAL FACTORS Japans current transition from single to double party system abstracts resulting implications for Japan-based multinational corporations

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B. ECONOMIC FACTORS

Reduction in disposable income Japan faces global pressure to cut public debt The effect of changes in currency exchange rates has been unfavorable for Sony

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C. SOCIAL FACTORS

Japan which accounts for 43% of sales ,it is an ageing population, with a median age of 44.8 years Loss of trust from customers following security attack & failure to notify immediately has tarnished Sony s brand image
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D. TECHNOLOGICAL FACTORS

Consumers are moving toward multi-functional devices The market for 3D related technologies is growing rapidly Industry-wide movement toward networked products & services and cloud computing.

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E. Legal Factors

Age and content restrictions from international regulatory bodies EU warnings over privacy issues following security breach on PSN network & Sony Online Entertainment properties US parties press for legislation of uniform national security and data breach standards for notification

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F. Environmental Factors

Some of Sonys manufacturing activities were suspended after recent tsunami , resulting in share price drop of 9% Regulations on the impact of electronic trash by Restriction of Hazardous Substances and Waste Electrical and Electronic Directive

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CORE COMPETENCIES

Economies of Scale and Scope in manufacturing and research and development arising from its numerous facilities situated in Japan, the United States and other countries worldwide. Unique Quality Technology owing to heavy emphasis on research Sony Corporations commitment to research & development activities has always been one of its top strategies to remain competitive in the market. Differentiated Products The continuous pursuit of research and development processes enables Sony Corporation to produce a steady stream of originally differentiated products which makes it difficult for competitors to find substitutes. Because of this differentiated approach, Sony Corporation is able to market their products worldwide, which enables them in turn to 4/23/1 2 maximize the returns on research and development expenditures.

PORTERS FIVE FORCE ANALYSIS CONSUMER ELECTRONICS INDUSTRY

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THREAT OF NEW ENTRANTS - LOW

Economies of Scale Product Differentiation Capital Requirements Switching Costs Technology, Know-how and Innovation Government Policy
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BARGAINING POWER OF BUYERS -HIGH

Products are fairly undifferentiated Buyers face few switching costs Online shopping has increased the bargaining power of buyers Buyers are price sensitive and demand high quality

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BARGAINING POWER OF SUPPLIERS - LOW

Big global supply chain management (Suppliers are not concentrated) Suppliers are forced to cut their prices or go out of business Direct negotiation with suppliers in order to encourage: Reliable supply Faster delivery Lower prices
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Many OEMs start to produce their own components inhouse

 Numerous and rather equally balanced competitors. Short product life-cycle High R & D costs Lack of differentiation or switching costs Imitation of technology Counterfeit products Low profit margins High exit barriers

RIVALRY AMONG EXISTING COMETITORS - HIGH

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THREAT OF SUBSTITUTE PRODUCTS

There

are few substitutes from other industries, if any. Most of them seem to be obsolete or have one foot out of door.

For example:

Digital Camera in the place of Film Camera Fax machines in place of overnight mail delivery
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BCG MATRIX OF SONY SUBSIDIARIES

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SWOT ANALYSIS
Strengths 1. valuable physical assets 2. a clear market advantage 3. priceless organizational assets 4. low production costs 5. resources 6. diversification Weaknesses 1. weak financial sheets 2. specific weak product launch Opportunities 1. software capabilities 2. upcoming festive season 3. joint venture with Blockbuster

Threats 1.industry sales drop 2. competitors 3. necessity for expensive 4/23 /12 technology

CASE STUDY :

RESTUCTURING OF SONY

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SONYS 1st LOSS First signs began in early 1990s Experienced a loss of 293.36b in 1995

REASONS: Unrelated diversification Innovation dearth Lack of brand evolution

RESTRUCTURING EFFORTS
8 restructuring efforts in 13 years Faced heavy restructuring costs adding to the fixed overheads These efforts failed to achieve the desired results & outcomes

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FIRST EFFORT -1994 Designed a 8 company structure

GOALS Creating a market-responsive company To clarify the scalar chains of the company RESULT Loss of 293.36b in 1995

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SECOND EFFORT -1996 Designed a Ten-company structure Goal was to bring the company back to Profits

RESULT Net Income decreased by 19.4% REASON Heavy decentralization Board room minimally involved in product decisions Unrelated diversifications

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THIRD EFFORT-1999 Internet based products were given priority

RESULT In 1999-2000, Net Income fell to 121.83b REASON Lack of consolidation of business groups

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FOURTH EFFORT -2000 Revamp of Top management

RESULT Net Income dropped to 16.75b from 121.83b REASON Dot com burst

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FIFTH EFFORT-2001 Transform SONY into Broadband Network solution company

RESULT Operating Profit declined by 40.3% in 2001-02 REASON Major and sudden shift in BUSINESS FOCUS

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SIXTH EFFORT -2003

TRANSFORMATION 60 introduced in Oct 2003 Cost of Restructuring $3.1b

GOALS Achieve Profit margin of 10% Reducing annual Fixed Costs by 330b Component Outsourcing RESULT Net loss of 6.8b during 2004 in Elec. Dev. Drop in Operating Income of Games Division by 48.67% Company Operating Income drop by 13% REASON

Drop in PS2 sales Drop in sales of VAIO Drop in sales of CRT Television Sets.
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SEVENTH EFFORT -2005

GOALS Identify the 5 main challenges facing the company Organizational Structure re-design RESULT Net Profit increased to 123b REASON Sony BRAVIA sales Reduction in Product & Design redundancies Focus on core competency
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EIGTH EFFORT-2007
Organizational Structure re-design Establishment of B2B Solutions Group

RESULT Estimated 6-fold increase in profits SONY shares rose to 5 year high Sales increased by 13% Operation Income of ED increased by 77% REASONS Sony BRAVIA sales JV with SAMSUNG New Product design and introduction

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NINTH EFFORT-2009 Focus on Electronics & Games business groups Forming 2 new business groups Consolidation of Operations in Japan MEASURES Infusing young blood into Top-management Reducing the number of suppliers from 2500 to 1200 Increasing R&D spending

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