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Sony Corporation-Restructuring Continues, Problems Remain Case Study

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Updated: Aug 4th, 2021

Defining the current strategy of Sony

Sony Corporation has been undergoing rough corporate experiences forcing it to restructure its business operations and strategies. Evidently, the organization has been through numerous challenges since 1990s despite its efforts to recover. Nonetheless, the recent reformation strategies introduced by Howard Stringer (worked as the CEO and president of the corporation) have allowed Sony to revitalize its business operations despite the constant challenges experienced by the corporation.

Firstly, the company announced a prominent reorganization strategy that was to reface its managerial systems, departmental operations, marketing structures, and production strategies (Indul 2010, p. 1). It is important to agree that the organization needed such changes hence could not hesitate to enact them in order to remain relevant in the electronics industry.

It also strived to enhance its market visibility and revitalize its global presence. The organization needed new products, new production structures, managerial reforms, a break from obsolete silo cultures, and other dominant business provisions that could augment its competitive advantages against its rivals.

The first strategy was to reduce its business categories and cut down on its product models. This was to revitalize its electronic business by putting more efforts on the most selling products while withdrawing non-performing commodities from the market as well as in its production structures. The company equally intended to proceed with profitable business categories witnessed by its move to drop some of its corporate departments.

Another evident strategy is to eliminate redundancies and overlaps noticeable in its business processes. Additionally, proper management of resources and their diversion to high performing dealings namely HD products, mobile commodities, semiconductors, appliances, and others are among the prospected strategies to help in propelling Sony to the brighter future in the realms of business (Indul 2010, p. 3). Another prospected strategy is to unite the organization by integrated all in departments together for a unified business operations.

Initially, the company operated in different departments namely electronics, entertainment services, financial services, and others. Each department operated autonomously, a phenomenon named as a silo culture. The current strategy is to break the silo culture and integrate all the business departments as indicated earlier. In fact, Stringer promoted a new slogan named Sony United in order to enhance the cross-company integration.

Operating together as a team is the main strategy of the company. This will help in the reorganization processes prospected for its various departments. Reducing the number of its employees to a reasonable percentage while closing down some of the non-performing business structures could help.

Additionally, the company opted to reduce the number of its suppliers from 2500 to 1200 in order to induce effectiveness as it only works with performers (Indul 2010, p. 1). Precisely, the intention of Sony is to enhance its performance, competitiveness, competitive advantages, market share, and revitalize its business operations.

Evaluating the strategy being adopted by Sony to regain its lost market share

Notably, a strategy considers the aspects of change. Thus, whatever Sony is currently pursuing is in conformity with its desires to change its present business models so as to gain remarkable competitiveness in the concerned industry. It is important to agree that the current Sony’s efforts to reorganize its business operation are helpful and can aid its desires to regain the lost market share.

Evidently, there is a stringent competition in the electronics industry hence forcing every organization to strategize appropriately in the realms of business.

The archaic business models can no longer help following the emergence of new market demands, technology, globalizations, and competition among other pertinent factors. It is from this consideration that the Sony’s move to reorganize its business trends is important and time bound. It is advisable for any business to restructure its business models in order to match the new market demands as indicated earlier.

This is a supportive consideration in various contexts. Evidently, Sony cannot regain its lost market share if it continues with its old business models and operational activities. The organization requires promising overhauls in all its structures ranging from management to product models as mentioned earlier.

This will help the organization to compete favorably and respond to business challenges and dynamic market demands with promptness. Additionally, using visionary leaders like Howard Stringer is important in enforcing the desired business changes. It is from strategic leadership that the company will regain its lost competitiveness and market visibility (Indul 2010, p. 8).

Although the company faces numerous challenges in this context, it is still possible that Sony can perform wonderfully in the market. This is possible through introduction of novel and competitive products, appropriate business strategies, and customer focus. Ability to enact viable marketing concepts can equally help in this context.

Critically, the moves by the company to restructure its business models are quite decisive when scrutinized critically. The business has the mandate to enact the required prospective in the realms of constructive models. Additionally, it is evident that the company is embracing the virtues of change in its systems. Change is an evitable phenomenon, which must be ratified whenever its time comes.

Another important consideration in this context is the integration of the organization’s departments in order to consolidate its operations and match the current business demands with promptness. Similarly, this is a critical move as proposed by Howard Stringer in the business context. Allowing the company to operate uniformly and share common organization’s objectives is considerably important. Actually, the Sony United slogan (introduced by Stringer) is a credible strategy worth adoption by the organization.

It will enhance teamwork and collaboration between different business sectors as the organization strives to recapture its lost market share. This objective cannot be attained solitarily hence indicating the need for consolidating the entire business components under a centralized management and business norms.

Additionally, Stringer’s vision with the company is elaborate and effective despite the recently noticed challenges (Indul 2010, p. 1). Such strategies have allowed the company to reorganize its business trends and operational mechanisms with the intent of controlling its various components.

Additionally, the ability to unite the organization helps substantially when viewed from the business context. This is an imperative provision when considered critically. It is the mandate of various organizations to understand the nature of their businesses and the vitality of other rivals so as to strategize considerably.

Appropriate business strategies are demanded in various contexts. Precisely, the move by the organization to consolidate its business components and centralize their management is important. It will enhance teamwork and other operational mandates as indicated earlier. From this context, ability centralize management and enhance competitiveness will obviously help Sony regain its lost market share.

Constructive managerial strategies will ensure that the company remains customer focused, produces commodities that address the needs of the targeted customers, and prospects future changes in the market trends. This will allow the company to remain focused in its business endeavors.

Evidently, in order to revitalize its electronics business and remain competitive within the industry, Sony must enact various business strategies as witnessed in its recent endeavors. As indicated before, these moves are intended to regain the aspects of business and other probable business considerations. It is important to reorganize various components of the organization in order to enhance its relevancy and business focus amongst other factors.

Evidently, Sony also intended to reduce its business categories and drop other product models. This was to happen with the intent of focusing more on the profitable products with the available resources. It is worthless to run numerous business categories with massive losses in return.

This has forced Sony to drop some of its archaic products and focus fully on the selling ones. This could allow the company to regain faster in the realms of market growth and other considerable components. Hence, this is a critical move when evaluated critically. It means that the company is ready to focus on the changing customer demands rather than clinging on the obsolete business models. Previously, devastating business approaches led to the plunge of Sony.

When the company launched its Bravia flat screen TV and other new entertainment and network product models, it picked up tremendously in the market (Indul 2010, p. 4). This allowed the company to recognize the importance of being customer focused rather than embracing traditional status quo while market trends are significantly changing. It is important to recognize such trends in the realms of business operations and other considerable factors in the same trends.

Additionally, the need to reduce the number of employees within the business and closedown other business premises could help in lessening unnecessary costs. This was an important strategy when evaluated critically. It is crucial to realize the importance of that move in enhancing the aspects of profitability while reducing unconstructive business costs and unworthy operational burdens. Critically, introduction of new business trends is quite important in various aspects.

It shows that the company is committed in its endeavors and plans to regain its lost market share despite the stringent competition witnessed within the industry. Sony has been known for quality products and it still mandates to provide such products to its customers. Additionally, the brand name it had initially built is considerable in various contexts.

This had promoted its business operations globally despite the rivalry it received from various firms including Samsung and LG among others. It is important to realize such business trends and strategize cautiously so as to regain the previous competitiveness in the marketplace.

The entire strategies were meant to enhance profitability for the company by reducing cost and enhancing sales. Precisely, all the efforts and strategies by Sony are considerable in regaining its lost market share. They tend to restructure the company in order to render it relevant in the current market trends.

The theory/concept that the current strategy of Sony was based on

The strategy used by Sony in its endeavor to restructure its business operations for profitability can be based on the classical strategic theory (Mazzucato 2002, P. 8). Mazzucato (2002, P. 8) indicates that there are 4 concepts/perspectives on strategy. The classical theory indicates that the concerned manager has the entire control over the business operations.

This is evident in the allocation of both internal and external resources. Additionally, the very manager can manipulate the internal structures of the firm with the intent of accomplishing desired business objectives. In this regard, the strategic efforts are guided by rationality, opportunism, and self-interest as evident in the Sony’s strategic case.

For example, it is important to agree that the current move by Sony to revitalize its operation have been steered by Howard Stringer. Stringer managed to impose his business ideas in the reform processes embraced by Sony. All his proposals to unite the company, reduce costs, and increase profitability have been embraced with precision.

It is from this argument that the company attains its witnessed reformation strategies. The ability to address exact customer demands and restructure the company to meet the dynamic market trends is of a massive consideration (Mazzucato 2002, P. 8-9). Precisely, the company embraces classical concepts in its change prospects and strives to enact it with precision.

From the history of Sony (as provided in the case), all its previous CEOs have been introducing their operation models and business strategies, a fact that supports the aspects of classical concepts/theories indicated previously.

Critically discussing the feasibility of applying Porter’s diamond model on Sony’s case

Notably, it is possible to apply the Porter’s diamond model on the Sony’s case following its viability and capability to discern the aspects of competitiveness that Sony strives to achieve. This is an important consideration in the business context and in the realms of business growth. According to Porter, a given firm’s competitiveness depends on the performance of other rival organizations in the same industry (Walker 2003, P. 177).

This is an important consideration since it also unveils why some industries are quite competitive compared to others in a similar region. The entire business prospects currently assumed by Sony conform to the principles of Porter’s diamond model when considered critically. It is important to revitalize the business operations of any given firm with respect to the business’ supremacy. Precisely, it is possible to apply the Porter’s principles in the Sony’s context with precision.

There are theories that determine how a company can become quite competitive in a given industry. Evidently, Sony has been a very competitive organization in its endeavors following the strong brand name it had established before. The quality of its products has equally contributed to this phenomenon despite the recent challenges. Applying the Potter’s model in this context can actually illuminate the entire business aspects of Sony in the realms of vitality and other considerable factors.

Potter’s ideologies are classifiable into various factors that can be applied in the assessment of a firm’s competitiveness. This is also relevant in the Sony’s case as indicated earlier. The first consideration is the demand conditions for the firm’s products or services (Potter 2010, P. 1).

Sony enjoys a massive demand for its products from clients globally. Its products are known all over the world having established a strong brand name. This has rendered the company quite competitive despite the stringent completion from LG and Samsung among other companies. Although its products have registered sluggish sales in the recent past, the company still enjoys a considerable demand for its products indicating how it is still quite competitive.

This is a considerable provision in the business contexts and global limelight (Walker 2003, P. 177). Frequently, buyers can induce a given company to introduce and embrace the aspects of new technologies in its systems, production capabilities, and products. This will allow the company to advance and enhance its competitiveness against other contenders in the same industry.

Contextually, when Sony had not introduced Bravia LCD TV sets, the market demanded them. Other companies like Samsung and LG had introduced such technologies.

When the company introduced the products, its competitiveness increased with Bravia registering massive sales globally. It is important to consider market demands and conform appropriately in order to gain the desired competitiveness and develop considerable competitive advantages. This demonstrates the possibility in establishing Porter’s diamond model on Sony’s case.

Another considerable component of the Potter’s model, which can be applied on the Sony’s context, is the factor conditions referring to human capitals, assets, infrastructures, and other vital resources that the organization possesses. Evidently, Sony has enough resources that it can utilize in the electronics industry to remain competitive and customer focused.

The ability to attain the required resources within an industry contributes considerably to the competitiveness indicated in such circumstances. This is an important provision when considered critically. Contextually, factor conditions are prominent determinants of competitiveness within a given firm. Sony has enough factor conditions that are helpful in its business endeavors as well as its prospected reforms.

Another important aspect in this context is the massive business capital that Sony possesses. The company can fund its research and development sectors in order to emerge with competitive commodities within the market. This is an important provision when considered critically especially in the business context. Actually, the aspects of resources make it possible to apply Porter’s diamond model on Sony’s case.

Concurrently, another determinant of competitiveness in this context is organization’s business strategies, its structures, and competition within the concerned industry (Potter 2010, P. 1). Contextually, Sony has formulated stringent business strategies meant to reform its operations with effectiveness. The proposed structure of the business will enhance its competitiveness in the realms of management, customer focus, ratification of technology, and profitability.

The organization strives to grasp a considerable market share despite the aspects of rivalry evident in the electronics industry. The way Sony was commenced and managed is a critical component of competitiveness discussed in this context. The initial objectives, missions, and vision of the company contribute massively to its competitiveness despite the challenges currently noticed in Sony.

According to Potter’s diamond model, another determinant applicable in the Sony’s context is the business eventualities or chance events. These are factors that the company can hardly control. Nonetheless, they can either augment a company’s competitiveness or contributes considerably to its loss.

For example, the recent global economic crisis affected numerous business with Sony included. In such a circumstance, Sony can do nothing but to adjust its business operations so as to remain competitive in the market. Additionally, the company can come with novel products at cheaper prices hence increasing its competitiveness within the market. Concurrently, supportive industries and government policies can dictate the competitiveness of a given firm (Walker 2003, P. 177).

Reference List

Indul, P. 2010, Sony corporation-Restructuring Continues, problems remain, IBS Center for Management and Research, Andhra Pradesh, India.

Mazzucato, M. 2002, Strategy for business: a reader, SAGE, London, UK.

Potter, M. 2010, What is Michael Porter’s Diamond Model?. Web.

Walker, G. 2003, Modern competitive strategy, McGraw-Hill, Massachusetts, US.

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