INTRODUCTION

Background

Sony Corporation traced its roots to the Tokyo Tsushin Kogyo (The Tokyo Telecommunications Engineering Corporation) or ‘Totsuko’, established on 7 May 1946 by Masaru Ibuka, an engineer, and Akio Morita, an innovator.  They started a company whose main aim was ‘to create a stable work environment where engineers who had a deep and profound appreciation for technology could realize their societal mission and work to their heart’s content (http://www.sony.net/SonyInfo/CorporateInfo/History/prosp

ectus.html).’

In 2002, Japan-based Sony Corporation was the world's largest consumer electronics company, a significant player in the media industry and the fastest growing computer and communication equipment maker. The 'Sony' brand was one of the world's most recognisable and trusted brands - thanks to half a century of relentless innovation, bringing an array of trend-setting electronics products into the market. Sony ranked 21st in the BusinessWeek/Interbrand list of World's 100 Most Valuable Brands with an estimated value of US$14 billion (http://www.finfacts.com/brands.htm) - and the first among its industry peers.

In 1999, for the third year in a row, Sony was recognised as one of the world's 100 Best Managed companies by Industry Week magazine (http://news.sel.sony.com/corporateinfo

/overview/). The Trinitron, the Walkman, the Betamax, the Camcorder, the Compact Disc, the MiniDisc, the PlayStation and the robot dog Aibo were some of the Sony innovations that had created all new markets of their own.

"It's a Sony" - the company tagline for its electronic audio and video products, was a stamp of quality, cutting edge technology and reliability.

The company also had a strong media industry presence, with its record label boasting artists such as Michael Jackson, Bruce Springsteen, Jennifer Lopez and Celine Dion. The film making division was behind blockbusters such as Spiderman, Men in Black, Air Force One, Charlie's Angels, Stuart Little and many hit television shows syndicated to various TV and cable channels around the world. The success of the PlayStation had made Sony the leader in the console gaming market. Sony was also the world's fastest growing personal computer maker (CNET News.com), albeit still ranking eighth in worldwide market share, with its VAIO brand of personal computers and CLIE line of handhelds fast threatening larger players like HP-Compaq and Dell.

Having a presence in semiconductors, electronic components, mobile phones and even robots, Sony was well positioned to compete in the emerging world of 'total digital convergence' - a vision of the future where multifunctional devices could seamlessly talk to each other, and multimedia content was ubiquitous through these networks. But in this uncertain future world of technology-driven digital entertainment, Sony, like its competitors, wasn't too sure of what exactly constituted the winning formula.

Sony's Products

In 1950, Sony produced the 'G-Type', Japan's first tape recorder followed by the 'P-Type' - its portable version. 'TR-55', Japan's first transistor radio, was launched in 1955, followed by the world's first pocket transistor radio in 1957. In 1960, Sony launched the world's first direct-view transistor television, and in 1963, the world's first VCR. In 1968, the legendary 'Trinitron' colour-TV set the industry standards of picture quality and design. In 1975, Sony brought the theatre home by launching 'Betamax' - the world's first home-VCR. In 1979, Sony launched the 'Walkman' - the world's first personal audio tape player - to a skeptical market. But the product made history by starting a revolution of personal audio products. The term 'Walkman' has even been included in the Oxford English Dictionary since 1986. In 1982, Sony pioneered the Compact Disc, in association with Philips.

Apart from these innovations, Sony also launched the Digital Audio Tape, the home use ‘Handycam’ video camera, the MiniDisc, flat-panel and high definition TVs (HDTV) and digital cameras. Sony also played a key role in the development of the Digital Versatile Disc or DVD. The market leading ‘PlayStation’ game console was launched in 1994. In the late 1990s, Sony entered the computer market by launching its ‘VAIO’ line of multimedia-capable PCs in 1996, and ‘CLIE’ series of handheld computers in 2000. In 1999, it launched the world’s first entertainment robot, the dog-like ‘Aibo’, which became a runaway success. Sony engineers were also working on intelligent humanoid robots, following the success of Aibo.

DATA AND INFORMATION GATHERING METHODS USED

Primary data was collected from various sources which included the Internet as well as magazines like The Economist, Newsweek and Fortune. An attempt was made to interview staff of Sony Corporation based in Sunway Damansara but had been futile. Nevertheless, enough was collected for analysis.

ANALYSIS OF INFORMATION AND DATA

Data collected included information on the structure and competitiveness of the market as well as the industry where Sony operated, not just in Japan but in US and Europe as well.

The history, corporate info and other pages at the Sony’s website provided substantial information to analyse the economic objectives of Sony.

Through articles in The Economist, Newsweek and Fortune magazines as well as websites found on the Internet, the approaches adopted by Sony to improve its profit through increase of its consumers’ demand could be identified and examined.

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Based on all information and data gathered, the economic performance of Sony over the last decade could be analysed.

DISCUSSION OF FINDINGS AND SUGGESTIONS

Strategies

Technical innovation and marketing superiority had been the two central pillars of the Sony establishment. These were put in place by the founders. Ibuka was a visionary, adept at imagining applications of emerging technologies to everyday life. Morita searched for new markets and growth opportunities.

When Nobuyuki Idei became CEO of Sony in 1995, he started to remake the company for the network age. He transformed the company that made ...

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