Sony: Company of Electronics Report

Introduction

The main challenge of Sony’s senior management is to increase net profits of its products especially in the electronics industry. The case study shows that Sony’s market share had dropped because of the entrance of competitors. The reason for Sony’s unpopularity today is because the prices of its products are too high compared to products of its arch rivals like Panasonic and Samsung. Matsushita and Panasonic also offer the same quality products and are marketing them using cost –efficient plant production technology¹.

Body

Question 1

One of the main challenges of Sony’s senior management is to increase net profits. Increasing profits could be brought about by increasing sales. Also, the process of decreasing expenses would increase net profits. One way to increase sales is to produce high quality products. Another way to increase sales is to advertise in the newspapers, radio and television.

One of the challenges for Sony is to produce a product that retains the high quality known as Sony at a lower price. The products have to be sold at a lower price in order to increase its sales figures. The decreased market price would be reasonable enough even to the point of selling the new products at the same or similar market price as its competitors, Samsung and Panasonic².

Another challenge would be to create synergy in the organization. All the departments must meet in one big room. They have to discuss the procedures and policies so that the goals and responsibilities of one department could be reached with the help of the other departments within the Sony business organization. Also, each of the departments must have bond with the other departments in the organization. One department must reach to the other departments to ask how they can help their next door business neighbor. These will surely help the employees of the organization achieve their goals in lesser time. For, synergy meant that one department plus one department is equal to more than two departments in an organization³.

Further, another challenge that Sony must tackle is to produce a new product or service that would bring them back to their former no. one position in the electronics marketing pie. This can be achieved by organization if it makes a feasibility study. The feasibility study includes a survey of current and potential customers as to what electronics gadgets and accessories they would want to buy. This survey will be used by the all departments within Sony as a guide to making a new product that will literally bring them back to the top in the electronics market. The company must balance its resource to produce the product and market the product.

Another challenge is for Sony to regain its former glory as the most sought after electronics manufacturer. Sony is on the right track here with the successful launching of its new product that sells like hotcakes. This new product is the Sony Playstation 2 portable. It is an innovative product for it is a mobile video player and a game player. In addition, the Sony officers were right in sacking Idei because he was at the helm of Sony when they were bulldozed from the top sales position by Samsung and Panasonic. Sony’s Idei was forced to retrench many employees and close down some branches in order to reduce variable as well as fixed expenses. Idei also focused on new Semi –conductor plan to help increase sales. However, these did not bring dividends to the shareholders of Sony Corporation. He was rightfully replaced by Howard Singer from the United States. Singer was profitably successful in managing the Sony music products in the United States⁴.

To answer the above challenges, Sir Howard Singer, head of the U.S. Sony operations⁵ wants to return Sony back to its former glory with two key ingredients. These ingredients are the Blu –ray, the Cell chip or the Playstation 3. Sir Howard Singer will be forced to drastically decrease all variable expenses as well as the fixed ones if this Howard Singer strategy still fails to remove the clinging Samsung and Panasonic from their perched position on the electronics market pie.

There are origins of the challenges to Sony

First, the 1990s and the 2000s saw the Sony Company wallowing in difficult times. The year 2000 showed evidence that the Korean company, Samsung, was a strong competitor of Sony in the electronics market both here an abroad. Samsung sold their products at prices that were normally lower than the Sony products. Samsung gobbled up a large part of the Sony market pie. In the same manner, the American computer company, Apple, came up with its own electronic products like the Ipod that immediately gobbled increased the Sony electronics market. The Apple products sold like hotcakes⁶.

And, another origin is the marketing department’s objective to generate more sales commission from selling more Sony products. The marketing department requests the production department to increase the number of the Sony products in order for marketing department to increase sales commissions. A situation arises when The production department would not cooperate by production only its regular number of units. They would give out reasons to the marketing department persons like the department could only do so much because the production people cannot be forced to work harder without any additional incentive⁷.

Also, another origin of the challenges is the failure of Sony Corporation’s marketing department failure to innovatively and creatively stay ahead of the competition. The marketing department people did not focus their attention on brand development. Thus, their brand was sideswiped by overtaking electronics companies like Samsung of Korea and Panasonic of Japan. Likewise, the marketing department was sleeping on its laurels too much. The reason for the lack of the marketing department to focus on brand development and implementing innovative marketing strategies was because the mostly engineers and sales staff were too self –centered and not customer centered⁸

Question 2

A change in program at Sony would at least take three years to show results because adjustment is a difficult pill to swallow. There will be strong resistance in some pockets in the organization. They would try their utmost to force management to hold on to the old ways of doing things. These people fear that they may not be able to adjust to the new way of doing things within the time period given them. They prefer not to enter unfamiliar territory for fear that they are old dogs. For, old dogs do not learn new tricks. The management of the company has to give the members of the entire Sony workforce enough time to adjust and master the new way of working life. This new way is the production of new products and using the latest technology⁹.

Question 4

The main reason why changing the entertainment part of Sony based in the United States is different is because it focuses on the sale of film and music products. And, these two types of Sony products are doing well in terms of sales and net profits in the United States. On the other hand, the changing of the electronics part in Japan is not doing well because the organization style in Japan is inward focused whereas the U.S. organizational management style is outward focused. This means that the Japanese are not too focused on the selling aspect of the organization without listening to the public’s comments, suggestions and criticisms on what THEY want in a product.

On the other hand, the U.S. Sony division makes marketing a top priority in terms of accomplishing the overall organizational goal. They want to produce a product that TRULY caters to the wants, needs and caprices of the public. The Sony here is to increase net profits¹⁰.

In addition, the Sony managers in the United States are creating electronics products that are user friendly and pamper the discriminating tastes of the United States customers. On the other hand, the Japanese Engineers were mostly interested in improving their prowess to make products that had never been invented or improvised before by their competitors. In Short, the Japanese engineers were interested in producing a product their current and future customers would shun away from for one reason or another.

And, Generall0y, the Japanese engineers were too engrossed with applying their customs and traditions in the business world. They were trained to produce or create new high quality products that their customers would not want to buy.

The current situation shows that the company’s Tokyo headquarters’ consolidated income statement for all its products sold Japan, Europe, United States and internationally ion the electronic equipment, devices and instruments showed it generated total revenue of $89,601,281,000 for the year ended March 31, 2008. It also generated a net profit of $3,831,204,000 for the same time period. The net income for the current year was 247% higher than the prior year’s net income of only $1,073,788¹¹.

Conclusion

Question 3

Sony’s secret for its successful comeback is o the successful outsourcing of its human resource jobs in order to reduce costs. Cost reduction increases net profits. Boggi, Gibbons of Sony stated that “We want to give our Human Resource Partners and COE leaders all the tools they need to help the business make smart decisiong about the workforce and HR¹². ” For, the Sony Company is implementing the Japanese organizational theory of harmonization the work relationship among the company’s senior managers, factory workers, and shareholders in order to facilitate production efficiency. Sony employs the Japanese organizational theory of Keiretsu. It supports the multilateral relation –specific investments¹³.

Sony’s organizational plan was to produce products using modern technology. Sony’s different departments joined forces to make the magnetic videotape recorder and offered many innovative products for home¹⁴.

Sony’s new organizational theory that has brought it back to fighting form is the learning organization theory where the members of the entire organization are trained at creating, acquiring, transferring knowledge and reflecting new knowledge and insights¹⁵. Sony’s current success is its new product the PSP. This gadget could be used for playing games. It can also be used to sharpen one’s sleepy because the player will have to create one or more strategies to win the war. The gadget has also been known help aid the gadget owner to ensure that important data is being saved while waiting for a single action store important pictures.

It is very popular because the children and young adults can now play their favorite play station games while riding a bus, riding in one’s own car, or just studying inside the School library. The owner of the gadget could also use the larger memory space in the new to save music files or otherwise. Sony’s change plan has been very successful. For, the company’s new product the Play Station Portable or just simply PSP could be improved further in order to increase the company’s sales.

An increase in expenses to produce a product would surely result to an increase in sales. The new Sony program must be durable, not poisonous or unhealthy. Sony must strive to fill the company’s valuable customers’ need for electronic gadgets that are low -priced and very affordable. Likewise, Sony’s ventured into marketing new products that would fill the needs and wants of its current and prospective clients is a good strategy at the area where prospective clients could easily buy it is a good organizational and marketing strategy. The new organization –wide strategy includes the buying, manufacturing and selling of new products in the market that overshoots its goals or objectives as an organization.

It also includes the improvement of the current assets in order to improve the products wants and needs and physical appearance like. The company must produce new products with the customer’s preferences in mind in order to take advantage of a captured market. Conclusively, Sony has been successful in the new implementation of their change policies as evidenced by the success of its PSP gadgets. Their success was brought about by synchronizing and synergizing all the departments within the organization in a production and marketing super machine that would increase profits and roses.

Works Cited

Dosi, Giovanni, David J. Teece, and Josef Chytry, eds. 1998. Technology, Organization, and Competitiveness: Perspectives on Industrial and Corporate Change. Oxford: Oxford University Press.

Gilson, Ronald J., and Mark J. Roe. 1993. Understanding the Japanese Keiretsu: Overlaps between Corporate Governance and Industrial Organization. Yale Law Journal 102, no. 4: 871-906.

Goh, Swee C. 1998. Toward a Learning Organization: The Strategic Building Blocks. SAM Advanced Management Journal 63, no. 2: 15+.

Kirton, M. J. 2003. Adaption-Innovation: In the Context of Diversity and Change. New York: Routledge.

Lai, Lawrence W.C., and Ben T. Yu. 2003. The Power of Supply and Demand: Thinking Tools and Case Studies for Students and Professionals. Hong Kong: Hong Kong University Press.

Mathieson, Rick. 2005. Branding Unbound: The Future of Advertising, Sales, and the Brand Experience in the Wireless Age. New York: AMACOM. Web.

Mckell, Lynn J., and Kenneth B. Mckell. 1994. High-End Audio for Multimedia Environments. T H E Journal (Technological Horizons In Education) 22, no. 2: 83+.

Barbara Czarniawska. 1999. Writing Management: Organization Theory as a Literary Genre. Oxford: Oxford University Press.

Pfeffer, Jeffrey. 1997. New Directions for Organization Theory: Problems and Prospects. New York: Oxford University Press.

Buskirk, Bruce D., and Allan C. Reddy. 1997. “2 High-Tech Consumers and Business-To-Business Markets”. In The Emerging High-Tech Consumer: A Market Profile and Marketing Strategy Implications, ed. Reddy, Allan C.:7-23. Westport, CT: Quorum Books.

Sony Corporation Income Statement. 2008. Web.

Footnotes

1. Jeffrey Pfeffer, New Directions for Organization Theory: Problems and Prospects (New York: Oxford University Press, 1997) 4.
2. Lawrence W.C. Lai, and Ben T. Yu, The Power of Supply and Demand: Thinking Tools and Case Studies for Students and Professionals (Hong Kong: Hong Kong University Press, 2003) 53.
3. Esther Thorson, and Jeri Moore, eds., Synergy of Persuasive Voices Synergy of Persuasive Voices (Mahwah, NJ: Lawrence Erlbaum Associates, 1996) 10.
4. Rick Mathieson, Branding Unbound: The Future of Advertising, Sales, and the Brand Experience in the Wireless Age (New York: AMACOM, 2005) 7.
5. Alfred D. Chandler, Peter Hagstrom, and Orjan Sölvell, eds., The Dynamic Firm: The Role of Technology, Strategy, Organization, and Regions (Oxford, England: Oxford University Press, 1999) 345.
6. Lynn J. Mckell, and Kenneth B. Mckell, “High-End Audio for Multimedia Environments,” T H E Journal (Technological Horizons In Education) 22.2 (1994).
7. Barbara Czarniawska, Writing Management: Organization Theory as a Literary Genre (Oxford: Oxford University Press, 1999) 2.
8. Tony Barrow, and Julian Newby, Inside the Music Business (London: Routledge, 1999) 21.
9. M. J. Kirton, Adaption-Innovation: In the Context of Diversity and Change (New York: Routledge, 2003).
10. Tony Barrow, and Julian Newby, Inside the Music Business (London: Routledge, 1999) 21.
11. ()
12. William G. Stopper, “Achieving Post-Outsourcing Success,” Human Resource Planning 28.2 (2005).
13. Ronald J. Gilson, and Mark J. Roe, “Understanding the Japanese Keiretsu: Overlaps between Corporate Governance and Industrial Organization,” Yale Law Journal 102.4 (1993).
14. Giovanni Dosi, David J. Teece, and Josef Chytry, eds., Technology, Organization, and Competitiveness: Perspectives on Industrial and Corporate Change (Oxford: Oxford University Press, 1998) 240.
15. Swee C. Goh, “Toward a Learning Organization: The Strategic Building Blocks,” SAM Advanced Management Journal 63.2 (1998).