Sony Essay

Words: 848
Pages: 4

1. Why did the contraction of the U.S. And Japanese economies and the rise in the value of Yen hurt Sony's exports from Japan ?

The strong rise in the value of Yen and the contraction of US economy resulted in a sharp drop in exports from Japan. The decline in exports was primarily due to a lower demand for consumer electronic products in US due to the slowing US economy, as well as the strong rise in the value of Yen relative to US dollars or Euros making the exports more expensive or less affordable for foreign countries. As exporters saw their sales and profits declining, they started cutting operating costs and slashing orders from their suppliers thus creating a ripple effect in the Japanese economy affecting both production and
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Yen's fall made Sony's goods cheaper for foreign buyers which boosted sales and profits. This was a result of some aggressive measures unveiled by Japanese policy makers to spur growth in the economy which resulted in Japanese currency falling more than 20% relative to US dollars since November of 2012. The favorable impact of foreign exchange rates helped offset some of the decline in sales within the electronics segment due to the changing consumer demands. However Sony has been struggling with broad challenges to its profitability in the electronic business segment as the TV and personal computer sales has been shrinking for the past several years. Falling sales is primarily due to shrinking consumer demand for these products as the demand is shifting to mobiles devices from Apple and Samsung electronics and due to the highly volatile and competitive nature of the PC and consumer electronics industry.

Sony has several business segments in different industries and has many product categories within the electronics segment, which causes it to face a broad range of competitors ranging from large international companies to highly specialized entities that are focused on only a few businesses. Sony's diversified business portfolio hinder's its ability to commercialize in a timely manner new and competitive products that meets the needs of the market. Particularly the consumer electronics segment operate in intensely competitive markets characterized by changing