Sony Corporation: Restructuring Continues, Problems

Remain

Kushan Samararathne 2016003103

Ruchira Edirisinghe 2016007012
Dinushika Madhubhashini 2016003101
B Amrith Thilan

1
 Introduction
Sony Corporation: restructuring continues, problems remain?!
From 2005- 2009 to Sony Groups strategic attempt was not aligned with Sonys Expected outcome

SAF criteria and techniques of evaluation

SUITABILITY
ACCEPTABILITY
FEASIBILITY
To achieve
cordination-
Revitalizing close products 8000 people layed off, 8/57 products closed,layoff 2009- A Company that Current Vision:Using our unlimited passion
UVP=Differenciat electronic buiness- (3000- outsource, close 16,000 employees,sofyware- 2014"Transformin inspires and for technology, content and services to
ion through remove 600),5700 jobs plants,reduce Techteam and manufa- Stinger g Sony"Corporate fulfills your deliver groundbreaking new excitement and
Innovation redundancies eliminated, B2B production Logistics-procument team resign strategy meeting curiosity entertainment, as only Sony can.

1946 2005 2006 2007 2008 2009 2012 2014 2016 2017
electronics President and chairman, Kazuo Current Mission:A company that inspires
business group, More power to Hirai take and fulfills your curiosity

2014-2017"Profit generation and

Leading global provider of investment for Growth"Coperate
Stinger CEO networked conumer Strategymeeting
electronics and 2
Lanch Bravia TV entertainment
 High Sunk cost
Brands
Threat of
new Marketing
entrance network
(LOW)

CHOICE Threat of
Bargaining new High sunk cost
Intensity of Bargaining
power of entrance Efficiency in production
competitive power of
suppliers (LOW) Patent and Gov Regulations
rivalry customers
(HIGH) (LOW) Risk
(LOW)

High no of Business brands

suppliers
Intensity Bargainin
Bargainin CHOICE
of g power of
g power of
competitiv customers
suppliers
e rivalry
Threat of (LOW) (HIGH)
(HIGH)
substitute
(HIGH)
CHOICE Long Lasting competitors
Live streaming music, and Internal componenets Competitors R&D
online download Lacking Unique
Low cost choice technological innovation
Threat of and diversity
substitute
(HIGH)
Hi Tec substitutes
Customer Loyalty? 3
Price high
 Political
Political
1. Political stability of bigger markets
1.
2. Political
Increasingstability of bigger
government markets
support for data
2. Increasing government
security & online business support for data
security & online
3. Government business
policies of Japan will affect
3. Government
Sony policies of Japan will affect
Sony

Legal Economy
1. ImprovingLegalpatent protection 1. High growth of developing markets
1. Increasing
2. Improving patent on
Regulations protection
e-waste 2. Economic stability of developed
3.
2. Increasing product regulation
Regulations on e-waste markets
3. Increasing product regulation 3. Increasing disposable incomes
4.Fluctuation in exchange rates

Environmental Social
1. Increasing emphasis on business 1. Increasing adoption of online gaming
sustainability 2. Improving wealth distribution
2. Increasing demand for 3. Current Generation is more technologically
environmentally friendly products . driven and welcomes new innovation
3. Global environment safety laws and
standards
changing consumer behavior

Technology
1. Increasing dependence on digital
Opportunities and technologies
2. High rate of adoption of mobile
constraints technologies
3. Technology gives it possible to spread
the innovation within seconds
Value Chain Analysis
The value chain describes the categories of activities within an organization which, together, create a
product or service. Managers need to understand which activities their organization undertakes are
especially important in creating that value and which are not.

Infrastructure Disconnected and isolated from each other and the

Infrastructure New structure for better coordination and unity (2005)
market
Simpler Operations
HR Workforce reduction of over 16,000 (2009) Reduced Cost
Higher Profits
And a leaner
Technology Products
Technology Less focus
in on
lineR&D, Innovation
with industry and Invention
standards (2005)
organization
Procurement No clear attempt to obtain better sourcing to be
competitive

Operations
Operations
Operations
Reducing
Divesting
Focused
Closer of on
business
those 57
cost
categories
manufacturi
different
reductions
andngproduct
from sites
core
models
business
(2009)
(2005)
(2006)
 Cultural Web
Power Structure Control Systems
Complete power restructuring Reducing of employees
Limited power to Engineers resulted in cost cutting
More power to the Manufacturing companies
management were combined and closed
Financial control
Rituals &Routines
Communication improved Organizational Structure

More customer involvement

Appreciations were given to
The A flatter organization
employees Paradigm More responsibilities given to
Silo culture the management
More involvement of
management in each business
Symbols unit
Stories
The cost of the retired senior
managers were nor bared The gap between junior and
Group promotions resulted in senior managers were
promotions reduced
Awareness of the company
strategy was given to all
 Suitability:
Capabilities
Resources
Physical Resources
Patents and Intellectual property
Constraints Tacit Knowledge Strategy
Speed of Technology catching up-to Growth Strategy
innovation Competencies Diversification
products in line with industry High Quality drive brand
Competitive strategy
standard technologies, Leading technology(2005>)
2nd Life generation Increasing adoption Differentiati
of online gaming Assessing Competitive Advantage (VRIN ) on through
Fluctuation in exchange rates
Not using integrated business Innovation
Strategy Canvas

Sustainblity
Inimitable
model~ silo culture 6

Company non-strategic assets. Strategic BUT

Value
5

Rare
Capabilities

Non-
Opportunities
Patent protection Aligned to strategy 4
Changing consumer behavior Patents and
Integrated product line interlectual property 3

Increasing dependence on digital

Physical Resources 2
technologies
High Quality driven
High rate of adoption of mobile
brand 1
technologies
Innovative Image 0
Patents and interlectual Physical Resources High Quality driven Innovative Image
property brand
Universal Studios, Inc. WARNER BROS. ENTERTAINMENT INC. Walt Disney Pictures and Television

Sony Corporation PANASONIC CORPORATION Samsung CORPORATION

LG Electronics Inc. Apple Inc. Toshiba Corporation

Khoninklijke Philips N.V. Hitachi Ltd.

 Acceptability
Risk Return Reaction

Return on Equity
Return on Assets 15
Return on Invested Capital
10 20
4

3
Current Ratio 5 15 Debt to Equity Ratio
1.4 0 100.45
1.2
2 Quick Ratio
1 -5 5 0.4
1 0.8 0.35
0.8 -10 0 0.3
0.6 0 0.6
0.25
0.4 -15 0.4 -5 0.2
0.2 -1 0.2 0.15
-20 0 -10 0.1
0 -2
-25 0.05
-15
-3 0

-4
Earnings Per Share
400 Dividend Payout Ratio
300
Interest Coverage
40
50 35
200
40 30
10030 25
20
020
10 15
-100 0 10
5
-200-10
0
-300
-400
-500 8
 Feasibility
Key Question
Whether the proposed strategy could work in practice?

Methodology

1. Financial Feasibility

2. People Skills

2. Integrating resources
 Conclusion

Sony Corporation: restructuring continues, problems remain?!

From 2005- 2009 to Sony Groups strategic attempt was not aligned with Sonys Expected outcome

SAF criteria and techniques of evaluation

SUITABILITY
ACCEPTABILITY
FEASIBILITY
To achieve
cordination-
Revitalizing close products 8000 people layed off, 8/57 products closed,layoff 2009- A Company that Current Vision:Using our unlimited passion
UVP=Differenciat electronic buiness- (3000- outsource, close 16,000 employees,sofyware- 2014"Transformin inspires and for technology, content and services to
ion through remove 600),5700 jobs plants,reduce Techteam and manufa- Stinger g Sony"Corporate fulfills your deliver groundbreaking new excitement and
Innovation redundancies eliminated, B2B production Logistics-procument team resign strategy meeting curiosity entertainment, as only Sony can.

1946 2005 2006 2007 2008 2009 2012 2014 2016 2017
electronics President and chairman, Kazuo Current Mission:A company that inspires
business group, More power to Hirai take and fulfills your curiosity

2014-2017"Profit generation and

Leading global provider of investment for Growth"Coperate
Stinger CEO networked conumer Strategymeeting
electronics and 10
Lanch Bravia TV entertainment