Sony Case Study Essay

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Sony Corporation – Restructuring Continues, Problems Remain

Sony in crisis again:
1. Obstacles: don’t question its business.
2. Reorganize the programs (financial performance and competitiveness of the company)
3. The attempts failed because of the silo culture.
4. Reducing business categories and products models.
5. Another reorganize of the program in 2009 (reduction in the employee and manufacturing sites) make all Sony parts to work together and move to innovation.
6. Did not give attention to the market research.

The restructuring efforts:
1. Another re-structuring in 1994 & 1996
2. Sony organized into 10 company structure  no improvement in the financial performance.
3. SWOT: another restructuring was in 1999 when Sony tried to exploit the opportunities offered by the Internet  PlayStation (p5)
4. New change in the top management of Sony.
5. The CEO suggest that Sony transform into a Broadband Network Solution company by launching a wide range of broadband products and services  did not get the expected results.
6. Analysts were of the opinion that the erosion in Sony’s profits was due to the expenses the company had incurred on implementing its many restructuring plans.
7. New idea of restructuring plan called “ Transformation 60” - 3 years plan- aimed to optimizing manufacturing infrastructure and reducing fixed costs by combining the operating divisions and shifting component sourcing to low cost markets like china. Reduce cost by:
Downsizing and consolidating the manufacturing, distribution and customer service facilities
Streamlining procurement.
7000 employees were laid off in Japan and 13,000 at other locations in world.
Several corporate and administrative functions which were overlapping were integrated.
8. This restructuring plan was not successful mainly because of the significant drop in sales in some products.
9. In 2005, Stringer became the CEO. He identified five main challenges for Sony: p6
1) Getting rid of its silo culture,
2) Attaining profitability across businesses
3) Making products in line with industry standard technologies.
4) Improving the competencies in software and service
5) Divesting the company of its non-strategic assets.
At the same year, Sony started to adopted the new organizational structure by reorganized the company into five business group: the electronics business, the games business group, the entertainment business group, the personal solutions business group, the personal solutions business group and the Sony financial holding group).
The results of this new structure:
Sony expected to achieve coordination across different areas including planning, technology, procurement, manufacturing, sales and marketing.
Eliminate product and design redundancies. along with this new strategy, Sony also announced an internal slogan called “Sony United”. This focused on promoting teamwork and cooperation and bringing together key resources.

The outcome:
1. One of Stringer’s first tasks was to revive Sony’s television business (flat panel televisions).
2. In 2006, nine factories were closed down and over 5700 jobs were eliminated.
3. To focus on the growth markets, Sony discontinued the manufacture of around 600 of the total 3000 products it manufactured.
4. Although the electronics business remained a problem, the sales of flat panel TV improved and so did the sales of PCs and camcorders.
5. Analysts were of the view that Stringer’s efforts had succeeded in putting the company back on the right track.
6. in 2007, Sony announced that to strengthen its product development capability and improve profitability in the electronics segment, some more changes had to be made in its organizational structure. The company established the B2B Solutions Business Group  aim to enhance its B2B business growth.
7. As a result of the joint venture with Samsung for making panels was one of the reasons for Sony doing well in the television market (B2B strategy).
8. In 2007, Stringer announced that
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