Mort and Baku considered themselves to be 'sonny boys'- a term which in early ass which connoted smart and presentable young men. Sony Corporation in 2012 consists of three core businesses, Electronics, Entertainment and Financial Services. In order to understand the phenomenal growth of Sony from sixties to nineties, one must study the role played by the co- founder Kaki Moratoria in the growth of Sony , he was as important to Sony as Steve Job was to Apple Expounder - Kaki Moratoria Kaki Moratoria founded the company with Baku in 1946. They were both Navy veterans.
They started with one vision to rebuild Japan after the war. Initial financing was provided by Kaki Amorist's family which was in ?Kaki] brewing business for 14 enervation. One of Sonny's first product was a transistor radio, produced in 1955. While the transistor was developed by Bell Labs and produced by Western Electric, it was Sony that first used it for a small pocket radio, in 1957, creating a new market space. Kaki Moratoria visited the U. S for selling their product and the various opportunities that existed in the American market made him fall in love with the country.
He was there to promote the brand so he refused big orders from retailers, like ?Sears], who insisted that their logo should appear on the transistor radio instead of Sonny's. Moratoria only took orders from distributors and retailer who allowed the brand ?SONY] inscribed on the transistor radio. He was first one in Japan to understand the importance of brand. At that time Japanese products were known as cheap imitations of American products. He changed everything for as long he lived. Case study - Sony 2012 Baku looked after production while marketing was handled by Kaki Moratoria.
Transistor radio success was followed by first transistor television and tape recorder. Response for Sony products in American market was extremely encouraging. Kaki Moratoria convinced Baku to look after production in Japan and he shifted to USA with his family in 1963 to capture the global opportunities and make Sony a global brand name. This was a brilliant move by the master strategist. In 1970, he got Sony listed in the New York stock exchange. Later Sony acquired CBS Record Inc. And renamed the company Sony Music Holdings.
In late sass's Sony also acquired Columbia Pictures and renamed it as ?Sony Pictures Entertainment Inch Acquisition of Columbia Pictures by Sony shocked the American businessman and politicians. This started raze in business schools of USA to study Japanese style of management. Kaki Moratoria transformed Sony in his life time as number # 1 electronics company of the world. Sony was rated number #1 brand of the world ahead of Coca Cola and General Electric by the American consumers in a survey in year 1998. He diversified Sony into music, movies and games.
The most successful electronic product ?Walking was his personal innovation. In Mid eighties Sony launched Walkway which was the most successful product ever in the history of electronics and made Sony most popular brand all over the world. The world had Just fallen in love with Sony products and were willing to pay premium price.. In 1994 Sony launched the Palpitation (later AS one). This successful console was succeeded by the Palpitation 2 in 2000, and Palpitation 3 in 2006. The Palpitation 2 has become the most successful video game console of all time.
It has sold a total of over 140 million units. Kaki Moratoria died in 1999 because of pneumonia and Sony lost its transformational leader Case Study - Sony 2012 Page 4 Sony Corporation - Current Performance Sony is now operating in absolutely changed global environment . The leading brand f electronics is loosing market share to Samsung , LAG and Apple Inc. And other electronic companies coming from Taiwan and China. While other electronics companies have flourished, Sonny's fortunes have suffered. Leading competitor Samsung shares have soared 72 percent since early 2000.
At the time of Kaki Amorist's death share price of Sony Corporation was quoted at $ 136 per share in 1999 and now in July 2012, share of Sony is quoted at Just $ 13. 10 almost more than 90% of the value lost ? Analysts called this happening "Sony Shock". Board of Directors of Sony desperately tried to change what was happening to Sony. In 2005, top management placed Welsh born American ?Howard Stringer] as the divisions . Stringer was in charge of the American operations and worked in the company for a long time to understand the culture of the company. Howard Stringer was not able to change the company.
Only losses accumulated while Samsung, LAG and Apple became more and more strong Color television was the core strength of Sony Corporation. Tradition technology of picture tube with 25% better in color and brightness gave them competitive advantage in Andean sass's. When LCD was introduced, Sony did not embrace it hill Samsung and LAG Jumped on it. Sony has been loosing money for the last seven years in TV business. To get their market share back, Sony even entered into strategic alliance with Samsung to buy LCD from them. Sony has indeed been a big looser in LCD screen revolution.
Page 5 Sony has not been able to come with a hit product since play stations& 2. One analyst said that Sony has missed so many opportunities that it is difficult to count. Lack of strategies is the hallmark of Sony now. They were in the best position to make UMP player, they were in music as well as electronics business. Apple was the one which developed pod . Sony was in the best position to make smart phone, they were in computers and mobile phone business, but was RIM with Black Berry and Apple with phone that captured the market of smart phone with huge potential.
You cannot afford to miss such high value opportunities and remain at the top. One area where Sony has found some success ? is video games. Sony marketed its Palpitation 3 console, for example as an integrated entertainment system that serves as a hub in the living room, connecting the Internet and television. Palpitation 3 costs such more than rival models from Nintendo and Microsoft. Sony was also slow to move into the world of online games, giving Microsoft a head start. Sony has been fighting aggressively with Toshiba for new generation DVD format.
Finally Toshiba decided to withdraw from its HAD -format war and Blue-ray developed by Sony became the industry standard. A delay in developing the Blue-ray DVD player forced Sony to push back its release dates may times. Now finally Blue -ray is available and this format is doing well. Culture of empowerment and independence which was promoted by the legendry under Kaki Moratoria resulted in lot of bad politics and infighting because lot of divisional heads wanted to be Chief Executive of the corporation after his demise. Page 6 Board decided to bring a foreign national to stop in fighting and politics.
It did not achieved that objective. Quality has been competitive advantage of Sony but in current recession times products from low cost countries are putting the global giant Sony into tremendous pressure. Sales for the fiscal year ended March 31, 2012 were 6,493. 2 billion yen, a decrease of 9. 6 percent compared to the previous fiscal year (?year-on-yearly). Sales decreased mainly in the Consumer Products and Services segment, primarily due to unfavorable foreign exchange rates, the impact of the Great East Japan Earthquake and the Floods, and the deterioration in market conditions in developed countries.
This was reported in the annual accounts but share holders thought otherwise, consensus existed in the shareholders that Samsung and Apple have inflicted double impact on the Sony by their better strategies in all the areas of operations. On February 15, 2012, Sony acquired Telecommunications ELM Erection's (?Ericson) 50 percent equity interest in Sony Ericson Mobile Communications ABA (?Sony Ericson), which changed its name to Sony Mobile Communications. Cost of manufacturing increased by 3% in the current year putting more pressure on the already reduced margins.