Sanyo's 'Think GAIA' Vision and Turnaround Efforts
|
Case Code: BSTR251 Case Length: 21 Pages Period: 2004-2006 Pub Date: 2007 Teaching Note: Not Available |
Price: Rs.400 Organization: Sanyo Electric Co. Ltd. Industry: Electricals and Electronics Countries: Worldwide Themes: Turnaround Strategies, Sustainability |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Sanyo's Deteriorating State
There had been an erosion in Sanyo's profitability in the home appliances and consumer electronics market since the 1990s and this was due to a combination of factors. First, even as Sanyo had grown in size and number of employees (as of 2004, it employed over 96,000 people worldwide) and come to secure more than half of its sales from overseas operations, it still lacked a proper global management structure to coordinate operations. The company's accounting system also had become outdated. Second, Sanyo's over 300 different business units around the world had focused on market share rather than on profitability. Third, the consumer electronics industry had become commoditized with prices falling rapidly, even as production costs were rising...
The 'Think GAIA' Vision
GAIA is the name of the Greek goddess of Earth. The 'Think GAIA' vision was based on British scientist James Lovelock's theory that the land, the atmosphere, the oceans, and the living creatures functioned as if they were a single living organism (See Exhibit VII for 'The GAIA Hypothesis'). The 'Think GAIA' vision recognized Earth as a living planet where nature and all life were intimately interwoven. Taking its inspiration from this concept, Sanyo vowed to promote a harmonious balance between technology and the environment through all its future products...
The Sanyo Evolution Project
The 'Think GAIA' vision was to be realized through a three-year implementation plan (2005-07), called the 'Sanyo Evolution Project' (Refer Exhibit IX for the Sanyo Evolution). The project represented the commencement of full-scale efforts by Sanyo to surmount the problems faced by it and the beginning of a new phase of 'change' and 'evolution'. The project comprised three components - Business Portfolio Reforms, Corporate DNA Evolution Plan, and the Financial Evolution Plan...
Business Portfolio Reforms
"Business Portfolio Reforms" were further categorized into three areas. In the first area, called 'Business Portfolio Evolution,' Sanyo was to evaluate and revamp its business portfolio. Instead of the usual product categories, Sanyo was to reorganize its business under the six solution categories outlined under the Blue Planet, Genesis III, and Harmonious Society programs. The solution categories were: Ecological Co-existence Solutions, Recycling Solutions, Global Energy Solutions, Next-generation Commuter Solutions, Family Relationship Solutions, and LOHAS (Lifestyles of Health and Sustainability) Solutions...
Corporate DNA Evolution Plan
The second component of the implementation plan was called the "Corporate DNA Evolution Plan" and was intended to transform Sanyo's corporate culture, organization structure, and management processes. It was also meant to reinforce corporate identity and create a strong centralized global headquarters to improve coordination and management of the company's business units across the world...
Financial Evolution Plan
In the third component of the implementation plan, called the "Financial Evolution Plan", Sanyo was to improve its financial position within three years by changing from a company that emphasized sales growth into one that focused on business value and profitability...
Implementing 'Think GAIA'
Based on the 'Business Portfolio Reforms', Sanyo reorganized its businesses. In November 2005, it brought out a 'Medium Term Management Plan' with the reforms that had to be carried out. The plan called for dividing Sanyo's businesses into core businesses and businesses needing structural reforms. Core businesses such as Power Solutions, HVAC products & Commercial Equipment and Personal Mobile Devices, where Sanyo was believed to have an edge over competitors, were to receive increased investments and managerial resources. The company aimed to achieve sales of 2 trillion yen from these core businesses by 2007...
Outlook
In November 2006, Sanyo cut an additional 2,200 jobs (2% of its workforce) from overseas and domestic operations. It also decided to further shift mobile phone manufacturing to overseas locations. Sanyo had already reduced the number of subsidiaries from 300 to 200. It planned to further reduce the number of subsidiaries by another 100 in the next three years. These reform measures were expected to cost 40 billion yen...
Exhibits
Exhibit I: The Sanyo Word-mark
Exhibit II: Worldwide Mobile Phone Market Shares (Q2 2006)
Exhibit III: Top Companies in the Digital Camera Market as of 2005
Exhibit IV: Sanyo's Solar Ark
Exhibit V: Sanyo's Business Divisions
Exhibit VI: Tomoya Nonaka
Exhibit VII: James Lovelock's Think Gaia Hypothesis
Exhibit VIII: Sanyo's Environment Policy and Action Plan
Exhibit IX: Corporate Declaration - Sanyo Evolution
Exhibit X: Sanyo's Business Strategies
Exhibit XI: Eneloop Battery
Exhibit XII: Sanyo's Financial Highlights
Buy this case study (Please select any one of the payment options)
| Price: Rs.400 |
Price: Rs.400 | PayPal (9 USD) |
