Sony Corporation: An Evolution of Technology

The electronics industry is marked by intense growth and nearly constant change. In order to
survive in this industry, firms need to establish and maintain strategies that will allow them to
cope with the changing nature of the industry while meeting the high expectations of its
customers. Firms lacking such strategies will find themselves behind the learning curve and
extremely inept at serving their customers or challenging competitors in the electronics
industry. Sony Corporation is one such firm in this industry that has made significant strides in
technological advancements and has formulated strategies to meet the needs of the industry
more effectively than its competition. With product interests in audio, video, television,
information and communication, semiconductors and electronic components, as well as
amassing a worldwide staff of 167,900 and consolidated sales and operating revenue of
7,214,000 yen, Sony is definitely poised for success.

A History of Technology
It all started in May of 1946 when Tokyo Tsushin Kogyo K.K. (Tokyo Telecommunications
Engineering Corporation), also known as Totsuko, was established in Nihonbashi, Tokyo. They
possessed a beginning capital amount of 190,000 yen to be used for research and the eventual
manufacture of telecommunications and measuring equipment. During the 1950s, the world
witnessed the invention of magnetic tape as well as the first tape recorder. This period also
marked a change for the company as the decision was made to change its name to Sony
Corporation. The 1960s brought about the invention of the world's first ever portable television,
the launch of the Chromatron color television, and the establishment of Sony Corporation of
America in the United States. Throughout the next decade, Sony experienced continued growth
and its hard work was recognized in 1973, as the recipient of the first Emmy award ever given
to a Japanese company for its development of the Trinitron color television system. The 1980s
saw expansion of the Sony name with the introduction of the world's first ever Compact Disc
(CD) player, the compact design of the Handycam camcorder, and the acquisition of Columbia
Pictures Entertainment which was renamed Sony Pictures Entertainment in 1991. Sony
Computer Entertainment was established in 1993 to a growing computer industry desperate for
technological innovations. As Sony entered the new millennium, we witnessed advancements
in cellular phone technology with the creation of Sony Ericsson Mobile Communications. The
early twenty-first century has also been marked by advancements in video technology with the
introduction of the high-capacity optical disc “Blu-ray”. Technology is at the heart of
everything that Sony is involved with, and its continued presence has made a significant impact
on the electronics industry.

An Intentional Focus on Strategy

Strategy depends on a variety of factors, and putting together an effective strategy is an
insurmountable task for many firms. Sony has been successful as it has successfully planned
for its future growth and survived in its existing industries based on solid and well-structured
strategies. An astute knowledge of the strengths and weaknesses of your own company will be
useful in crafting an appropriate strategy to ensure success in your target industries. Being
aware of your competition is also an important characteristic of effective strategy, as evidenced
by the differing views of Sony and Samsung when it came to outsourcing versus building
televisions on their own. Sony had always believed in outsourcing production whereas
Samsung held true to manufacturing their products internally. According to Yoon Boo Keun,
president of Samsung's TV business, “Giving up manufacturing is tantamount to abandoning

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your brand." Sony, however, believes: “We would like to concentrate our resources on Sony-
unique applications," according to spokeswoman Sue Tanaka.
Sony has attacked the notion of strategy from several different fronts and has proven to be very flexible
and open to alternatives to its strategy formulation in order to achieve the goals set. One of the
methods Sony has used is the formation of strategic partnerships that allow it to capitalize on its own
strengths, as well as the strengths of other firms, to achieve synergy through the joint venture. This
strategy tactic was realized in the alliance of Sony and Google with regard to the cellular phone market.
By working together on this joint project, both Sony and Google were able to realize benefits of the
partnership that could have been difficult to achieve independently. According to Howard Stringer,
Chairman, president, and CEO of Sony Corporation: “The combination of Sony's industry-leading
product design, engineering and development expertise with the flexibility and growth potential of
Google's innovative, open-source Android platform will provide consumers with a world of new and
exciting Internet user experiences. Through this alliance, Sony will deliver new levels of connectivity
and Internet integration across our range of assets and product categories.” On the Google side of the
partnership, Eric Schmidt had this to share about their alliance with Sony: “We believe that open
systems lead to more innovation, value and choice for consumers, which is why we are so proud to
work with Sony to bring the power of the Android platform to more consumers around the world.”

Part of Sony's success lies in its reliance on quality personnel committed to the corporate goals
of Sony Corporation. Its strategy regarding human resources is paramount to staying
competitive in such an ever-changing market fueled by rapid technological developments and
high expectations. Sony realizes the value of human capital and strives to maintain a
professional working relationship with its employees to insure they feel a part of the bigger
picture at Sony. One way in which this is addressed is through its stance on Employee-
Management Communication. According to this human resources strategy. “Sony places a high
priority on communication between management and individual employees. Since fiscal year
2005, Sony’s CEO, Howard Stringer, has made a point of visiting Sony sites around the world
to communicate directly with employees by holding town hall meetings and creating other
opportunities for dialogue.” The goal of these worldwide meeting is to help explain: “…
Structural reforms and other management policies directly to employees and seek their
understanding thereof, as well as to gain feedback from the front lines and promote dialogue on
technology, management and other themes, top executives continue to regularly visit sites
throughout Japan. Top executives also communicate with Sony Group employees by posting
messages on Sony’s intranet and seek feedback, thereby facilitating the sharing of information
and creating a sense of unity for the Sony Group as a whole.
Sony realizes that even having face-to-face meetings at their facilities around the globe does
not allow all of their employees an equitable manner in which to voice their concerns to
management and feel as though they are being heard. Therefore, Sony has also implemented a
series of Employee Opinion Surveys for employees in each of its regions. The results of these
surveys are deployed in action plans targeted at providing more comfortable workplace
environments for its employees. These surveys have addressed such issues as: workplace
culture in Japan; corporate strategy comprehension in North America; management evaluation
in Europe; work-life balance in China; awareness of management policies in Latin America;
and employee motivation in the Pan-Asian region.

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Keeping Up in the Technology Industry
Obviously Sony has been diligent in its pursuit of effective strategies that will enable it to be
successful. However, this doesn't mean that it can rest on its past successes in this industry
without constantly being aware of changes and opportunities within the marketplace. Sony
consistently invests its resources in research and development in order to maintain a
competitive edge in the marketplace. In fact, Sony looks not only to its existing products but
also in new markets where it can advance its position. Sony also realizes that it must contend
with its existing competitors in order to persuade the consumer to choose its product over that
of the competition. This strategy was displayed in its focus on the retail side of its distribution
where consumers were often opting for a cheaper priced television in lieu of purchasing Sony's
Bravia model. The company recognized that some consumers may be swayed at the point of
purchase even when the Bravia concept was effectively displayed in its advertising prior to
purchase. In addition to this tactic on its television market, Sony developed another campaign
meant to integrate its entertainment and electronics business under one campaign. The “make
believe" campaign includes a television advertisement that: “. . . shows a boy taking a 'magical
journey' through the Sony 'worlds' of products, music, film and games," and will also entail
digital, outdoor and print advertisements.

Looking Ahead
As Sony looks toward the future, there are no doubt opportunities as well as threats to the
company and the industry as a whole. It will need to hold true to its roots and purpose as de-
scribed by Howard Stringer, Chairman, CEO, and president of Sony Corporation: “At its core,
our brand stands for quality, creativity and the magic that can happen when our many diverse
employees come together for a common purpose. It also stands for integrity and ethical
business practices - doing the right thing for our people, our communities and the environment.
These qualities have been a fundamental part of our company since it was founded more than
60 years ago and continue to guide our activities today.” The future will definitely include
some challenging times for Sony, to which Stringer offers the following guidance, “We must
increase our speed to market with desirable and competitively priced products and services.”

CASE QUESTIONS
1. DISCUSSION - How would you rate Sony's ability to create and deploy their
strategies?
2. DISCUSSION - How does the industry in which Sony competes dictate the type of
strategy it must implement in order to be successful?
3. DISCUSSION - How might Sony plan for the future in the electronics industry? What
opportunities and threats do you see coming in Sony's future?
4. FURTHER RESEARCH - Research Sony's competitors and determine the advantages
and disadvantages they possess compared to Sony. How might they deal with these
disadvantages in order to be more competitive with Sony?

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