Sony Corporation was established in Tokyo, Japan in 1946 by Masuru Ibuka and Akio Morita. From 20 employees and the small capital of 190,000 yens in the early day, Sony has non-stop developed and become one of the leading manufacturers in electronics and entertainment products for cunsumers and professional markets. It is ranked as the 69th world largest corporation by the Fortune 500 with revenue of 78 billion dollars for the fiscal year ended March 31, 2010. With the worldwide basement in Japan, Europe, the United State and other area, Sony’s business operations vary from Sony Electronics, Sony Picture Entertainment, Sony Computer Entertainment, Sony Music Entertainment, Sony Ericsson and Sony Financial Holdings. Its major products include audio, video, television, information and communications, semiconductors and electronic components. As a semiconductor maker, Sony is among the Worldwide Top 20 Semiconductor Sales Leaders. The company’s previous slogan is “Like.no.other”. Its current slogan is “Make.believe”, which is the Sony’s commitment to inspire and empower their consumers.
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For more than 60 years, Sony has created a lot of products and technologies that help our lives more convenient, enjoyable and productive. With these achievements, Sony has gained a solid reputation for quality, reliability, innovation and stylish design). As a leading worldwide supplier in electronic and entertainment contents, with the vision is to create exciting new digital entertainment experiences for consumers by bringing together cutting-edge products with latest generation content and services, Sony is committed to developing products that truly satisfy customers and to enhance its reputation for innovation and excellence.
Sony now aims to enhance its strength in its wide range of business as well as maintain the leadership position. In order to achieve this, Sony is pursuing three corporate initiatives:
The Customer Viewpoint Initiative: this initiative aims to consider the customer perspective in viewing Sony, its products and services.
The Technology Nr. 1 Initiative: this focuses on the importance of reinforcing Sony’s cutting-edge technologies in target areas such as television, home video equipment, digital imaging equipment, Walkman… in oder to maximize the investment of resources.
The “Genba” Initiative: this is to strengthen frontline operations including design locations, manufacturing facilities and sales offices.
2. Critical success factors of Sony:
The success of Sony may well explained by three key factors. They are: innovation, global localization and the most important thing that brings in its huge success is the leadership.
2.1. Innovation:
In their consumers’ minds, Sony is regarded as one of the world’s greatest brands. Much of Sony’s brand equity is originated in its innovation. Innovation is one of the most important factors that differentiate Sony from its competitors and it has become a part of Sony’s mainstream culture.
Innovation is the process of creating new ideas and putting them into practice. It plays the major part in organizations which survive and grow upon developing new technology, products and services. Innovation only makes sense when it creates value. It must be an on-going and sustainable process rather than a “boom and bust” event. An innovative organization should have structure that supports the innovation. It emphasizes creativity through teamwork and cross-functional integration. As Akio Morita, the founder of Sony, said, “It is possible to have a good idea, a fine invention, but still miss the boat, so product planning, which means deciding how to use technology in a given market, demands creativity. And once you have good product it is important to use creativity in marketing it. Only with these 3 kinds of creativity – technology, product planning and marketing – can the public receive the benefit of a new technology”.
2.1.1. Creativity in technology:
In a dynamic and high competitive environment like the electronics industry, the invention of new products and technology is crucial. From the early days, Sony has consistently developed and introduced innovative products to the global market. These include: the first magnetic tape and tape recorder in 1950; the transistor radio in 1955; the world’s first all-transistor TV set in 1960; the world’s first color video cassette recorder in 1971; the Walkman personal stereo in 1979; the Compact Disc (CD) in 1982; the first 8mm camcorder in 1985; the Minidisk (MD) player in 1992; the PlayStation game system in 1995; Digital Mavica camera in 1997; Digital Versatile Disc (DVD) player in 1998; and the Network Walkman digital music player in 1999; the next generation high capacity optical disc “Blu-ray Disc” recorder in 2003 and the world’s first consumer use digital HD video camera recorder conforming to HDV standards in 2004. Most of these products have become the factor emergence worldwide and set up the global standards.
However, not all products introduced into the market is successful as expected because a good technology is not enough, it must be convenient to the users as well. Nevertheless, Sony is not the one that easily steps back after the failure. Rather than that, it accepts the failure and draw the lessons. This spirit contributes to create more convenient and user-friendly products.
VAIO notebooks that raise the bar in both form and function; digital cameras that capture pictures on a floppy disk, CD-R or Memory Stick; a handheld device that lets you store and view photos as well as moving photo; MiniDisc recorders with a digital PC Link to marry high quality digital audio with downloadable music; DVD/CD multi-disc changers that playback both audio and video; digital network recorders that pause, rewind and fast-forward “live” television using a hard-disc drive; and Hi-Scan flat screen TVs that deliver near HDTV picture quality through Digital Reality Creation (DRC) circuitry.
2.1.2. Creativity in planning and production:
Creativity in planning and production means the ability to predict the future market in advance and design product for it. As Masaru Ibuka and Akio Morita aimed, they are products which people didn’t realize that they wanted and those they were delighted with once being introduced. The right product in the right time will lead the company to success.
This principle gives birth to creative products like transistor radio, Walkman, CD, DVD,…
2.1.3. Creativity in marketing:
Sony’s key capacity was not in breakthrough technologies but in commercializing new, well-designed and quality products considering a large consumer potential that its competitors neglected and then found creative ways to market these offerings.
This is represented in the clever ways of advertisement and careful measurement of each campaign’s effectiveness. Sony chooses favorable television channels like sports, series to advertise for its products. Moreover, it has its own channel called Sony TV channel which shows entertainment programs targeted at family audiences. This is one of the most popular urban Hindi-language channel in India.
Sony’s marketing strategies focus on conveying the benefits of its products to customers. Take Sony’s VCR for instance, its marketing plan uses the idea of a “time shift” to make customers realize that it’s no matter if they miss a favourite program because they now can record and watch it later with the VCR.
Besides, the company also supports its new product with fashionable designs and advertisment. Playstion, the most successful product in game history, owns its success to the design, which was a combination of squares and circles. Sony’s advertisements centers on newly released products. Therefore, the launching day of Playstation was set for more effective advertising copy. For example, Playstion 3…
Not only does Sony emphasize on product development but it concentrates on the employees as well. This is the root of Sony’s original products.
Intellectual capital is understood as the collective brainpower or shared knowledge of a workforce. When other resources such as materials, capitals,…become restricted, intellectual capital is more essential than ever. This considers human beings, or employees as the greatest assets of the organization. According to this, people are the ultimate foundations of organisation performance. Intellectual capital is the key to the organisation’s success. As Max Depree, the former CEO of Herman Miller said, investing in developing people means investing in the future.
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Understanding the role of people in organisations, Sony motivates and encourage personal development through on-the-job learning, along with accessing to various programs designed for different regional needs, including training for bussiness leaders and engineers, management skill improvement and enhancing the abilities and skills of individuals. Sony appreciate the individual’s desire to engage in new chalenges. Hence, it established a “Freedom and Open-mindedness” culture in which employees are inspired to grasp the opportunity in buiding their own careers. In this culture, people are free to create and exchange their ideas to introduce products which have never existed before, products which inspire their consumers as well as add value to the corporation. Engineers are organized into small innovative teams so that they can achieve better and faster communication within the teams. Moreover, Ibuka himself led several teams, which set the team’s spirit to the highest level.
Sony makes compensation based on work contributions. In addition, Sony evaluate its employees performance periodly by its managers, through open and blunt discussions. It implements reward system to motivate employees to pursue greater chalenges and achievements such as Sony MVP award, which honours individuals who have applied specialized technology and knowledge to add value for Sony, DE (Distinguished Engineer) which acknowledge engineers who have played instrumental roles in the development of Sony…
Like other Japanese corporates, Sony commits a life-long career to its employees. This helps employees feel safety and devote their best to the company. However, its criteria is to find a truly employees, not a person to fill the job. Sony’s purpose is to create a company where everyone feels happy to work. Right from new employees training, recruits are told to voluntarily chosen Sony, this is their responsibility and they have to create happiness themselves
Global localization:
From the beginning, while other company focused on the local market, Sony recognises that it should regard the whole world as its marketplace and was careful not to restrict its activities to Japan alone. Sony understood the value of the global brand from its inception. It was after Morita’s first trip to the United State in 1958 that the company name was changed from Tokyo Tsushin Kogyo to the one that was easier to pronounce and recognize – Sony. The name Sony was used to show that in spite of being a very small company, it was consisted of young people who have the energy and passion toward unlimitted creation. The changing company’s name demonstrates the global mindset of its founders.
In the 1950s, Sony expanded the corporation abroad and this set the base to explore new potentials in movie, music, finance and other areas. This makes Sony become ahead of its competitors. Its expansion was carried out through the strategy called “global localization”. The purpose of this strategy is to make Sony a truly global company which kept developing products in Japan while conducting manufacturing among plants in Europe, the United State and Asia. These plants were supported by a large numbers of Japanese managers and engineers to ensure the quality. People become so familiar with Sony that some Western consumers never realize that Sony is a Japanese company.
Leadership:
The most important factor that leads to the success of Sony is its style of leadership. In an organisation, the leader is the most important person, he is the one who determines whether the corporation is success or not.
Right from the lauching ceremony, Ibuka gave speech which set the vision of company to do something that other competitors couldn’t and that nobody had ever done before rather than wasting brains and technologies in imitiating others. This principle is the root of the innovation of Sony and set up its culture as “Freedom and open-mindedness”.
Akio Morita is known with his ability in imagining, designing, implementing and innovating new products as well as marketing, brand management strategies and human skills. Under Morita’s time, Sony consistently innovated new products and technology. Without Morita, the world would never know about the Walkman personal stereo or video cassette recorder… He was also a true marketing pioneer who implemented to make Sony a household name all over the world. The brand name awareness shows obviously when Morita turned down the offer of 100,000 radios from Bulova because theit condition was that all the radios had to be under their name.
Morita’s skills with human expressed through his view and trust in employees. His concept was that anybody had creative ability, but very few people know how to use it, so a leader should motivate and encourage his employees to promote their creativity. He considered developing a healthy relationship with his employees and creating a family-like feeling within the corporation the most important mission for a Japanese manager. Also, he believed that money was not the greatest motivation for people to work. Instead, people worked mostly for their satisfation. No one can’t make mistake. Thus, mistake is acceptable; however, it should be the lesson to learn from and make sure not to make the same mistake twice.
Noro Ohga, the former CEO of Sony, was responsible for bringing Sony into the mordern age and implementing it with a unique sense of style through product planning, stylish design and creativity marketing. Under his time from 1982 to 1995, Sony was expanded from an electronics company to a comprehensive entertainment company with the establishment of the music, pictures and gamming businesses. Sony Music Entertaiment and Sony Pictures Entertainment are two of the world’s largest entertainment producers. Also through Ohga’s perseverance, Playstation, one of the most success game in history, was launched. This event marked Sony as the most successful game manufacturer ever.
The current Chairman and CEO, Nobuyuki Idei, as well as the current President and COO Kunitake Ando are in charged of continue what Sony’s former learders did to maintain and enhance the value of Sony.
Conclusion:
Throughout its history, Sony has shown a capability to capture the imagination and enhance people’s lives. The oganization has been at the cutting edge of technology for over a half century and had a great influence on the way people live. Over the years, Sony’s products have been perceived as smart, unique, good performance and outstanding design. Starting business as a Japanese company, Sony didn’t follow the traditional ways of the industry. Instead, it chose its own way: creating what haven’t existed before, expanded the brand worldwide from the early time, widened the business to other areas. Sony has built up a brand of innovation and quality. This is backed up by innovative teams and an excellent leadership. All of these combine to transform Sony from a tiny, local company into a giant worldwide. In a turbulent marketplace like the 21st century, these factors are still necessary to build a sucessful business.
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