You are on page 1of 21

Business News Analysis

Sony Corporation
Presented byNeha Upadhyay Subhash Reddy Satheesh Kumar

NEWS
Sony Suffers $5.7-bn Loss, Sees Turnaround Economic Times (11th May)

Sony posts a record loss, vows 2012 profit aggressive cost-cutting and top-tobottom reorganization. - Los Angeles Times (10th May)

SONY

Key People
Sir Howard Stringer (Chairman)
Kazuo Hirai (President & CEO) Ryji Chbachi (Vice Chairman)

Products
Electronics,

video games,
mass media,

broadcasting and cable,


music and entertainment

telecommunication,
digital distribution

Products

Services
Financial services, insurance, banking, credit finance &

advertising agency.

Current Status
Total sales drop 9.6 % Loss - $ 5.6 bn Previous year loss - $ 3.2 bn Sales drop in LCD, DG cam, PC & gaming

products 18.5 % which makes half of


sonys revenue

Current Status
Music business plunged to $ 5.4 bn from $ 5.7 bn. Operating profit reduced to $ 450 million from $475 million. Share price as on were 10th may 1203 yen touching 25 year low price.

SONYs Strategy
Kazuo Hirai, Sony's new chief executive, has promised to make "unavoidable, painful

choices" to fix or dispose of poorly performing


divisions telling "Sony will change. to

investors.
Cost cutting &

Restructuring

Cost Cutting

Restructuring
Act of reorganizing the Legal, Ownership, Operational, or

Other structures of a company for the


purpose of making it more profitable.

Steps Of Restructuring
1. enough liquidity to operate during implementation 2. produce accurate working capital forecasts 3. provide open and clear lines of communication with creditors

4. update detailed business plan and


considerations

Characteristics of restructuring
Cash management and cash generation during crisis Retention of corporate management sometimes "stay bonus" payments or equity grants

Characteristics of restructuring
Moving of operations such as manufacturing to lower-cost locations Reorganization of functions such as sales, marketing, and distribution Renegotiation of labor contracts to

reduce overhead
Refinancing of corporate debt to reduce interest

payments

Characteristics of restructuring
Sale of underutilized assets, Outsourcing of operations such as payroll and technical support A major public relations campaign to reposition the company with consumers Improving the efficiency and productivity through new investments, R&D and business engineering.

Restructuring In Sony
Sony to sell its full stake in LCD join venture with Samsung Electronics worth $940 million. Sony to outsource LCD panel. Sony acquired Ericsson's stake in Sony Ericsson in January 2012

Analysis
For the last three years, Sony has lost 399.3 billion yen ($5.1 billion) due to competition. In September 2000 Sony had a market capitalization of $100 billion; but by December 2011 it had plunged to $18 billion. In May 2012, Sony shares are valued at about $15 billion i.e. just 3 percent of rival Apple Inc.

You might also like