Facts and Figures
Sony Corporation, one of the largest manufacturers of electronic products in Japan and worldwide, anticipates losses for the 2011-2012 fiscal year at $ 1 billion against the backdrop of strong yen, floods in Thailand, and declining sales in the US and Europe. The main business of Sony, the production of TVs and panels, has suffered losses for 4 years in a row. The reason for this is a decrease of customers’ interest in TVs and a fall in panel prices due to oversaturation of inventory stocks along with the growing competition with Korean Samsung Electronics and LG Electronics and Japanese Panasonic. In order to resist the losses, Sony announced the reorganization of its television business. Also, the corporation will take the additional efforts to turn its losses into profits by improving liquid-crystal display (LCD) panels’ efficiency.
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The article by Wakabayashi (2011) presents two figures regarding Sony’s profits and losses that are useful to understand its previous performance and predict further development. For example, one may observe that the net loss of Sony Corp., according to the results of the second quarter of 2011/12, amounted to 27 billion yen (about $ 350 million). According to the relevant data provided by Wakabayashi (2011), over the same period last year, the company registered the net profit of 31.1 billion yen (about $ 400 million). The sales of this Japanese manufacturer in the second quarter fell by 9.1 percent to 1.58 trillion yen ($ 20.45 billion) compared to 1.73 trillion yen ($ 22.14 billion) for the July-September period last year. Following the results of the current financial year, Sony Corp. predicts a net loss of 90 billion yen ($ 1.15 billion). The second figure, TV business operating profit / loss, focuses directly on the company’s operation since 2001. While the period from 2001 to 2004 may be characterized by the slight profits, the following years are marked by the growing losses. Therefore, it is possible to note a strong tendency of decline in Sony’s revenues from the TV industry.
Structure of the market and strategy of the firms
Speaking of the structure of the TV market, it is possible to mention a strong competition between such corporations as Sony, Samsung, LG, and Panasonic. Each of them experiences some losses in the identified market due to the global issues in the economy. However, it should be emphasized that some companies are more successful than others. For example, Samsung Electronics and LG Electronics were the pioneers in presenting LCD TVs, thus multiplying their profits and effectiveness on the market. In this connection, Sony was too late to succeed. In general, the mentioned companies tend to reorganize their manufactures to meet the customers’ expectations and anticipate them.
The strategy of Sony is to restructure and procure LCD TVs by collaborating with the joint venture of Samsung. Accordingly, the latter considers it beneficial to take the coordinated actions with Sony. In addition, it becomes evident for the readers of the article that Sony needs to ponder over addressing such issues as yen’s rise against euro and flooding in Thailand. It goes without saying that the mentioned issues cannot be controlled or prevented, yet the company should have a clear plan of action in case of such events to avoid severe negative consequences. As for Panasonic and LG, the article includes no details about their strategies except information regarding restructuring. Thus, the strategy of TV manufacturers focuses on struggling with the market challenges and increasing their profits through innovation and continuous improvement.
Wakabayashi, D 2011, ‘Sony predicts $ 1 billion loss amid TV IIIs’, The Wall Street Journal, Web.