Restructuring Sony
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Case Details:
Case Code : BSTR063
Case Length : 19 Pages
Period : 1994 - 2003
Organization : Sony Corp
Pub Date : 2003
Teaching Note : Available
Countries : Japan
Industry : Consumer Electronics
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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EXCERPTS
Restructuring of Electronics Business (1994)
Under Ohga's leadership, Sony witnessed negligible growth in
sales during 1990 and 1994. Sales and operating revenues improved by only 2%
during that period.
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However, the net income and operating income registered a drastic fall of 87%
and 67% respectively.
Analysts felt that the stagnation in the electronics industry coupled with factors such as the recession in the Japanese economy and the appreciation of the yen against the dollar led to the deterioration in the company's performance. It was noticed that in the electronics business (Refer Table III), the revenues of the video and audio equipment businesses were coming down or were at best stagnant, while the television and 'Others' group were showing signs of improvement. The 'Others' group, which consisted of technology intensive products such as computer products, video games, semiconductors and telecom equipments, was performing very well and had a growth rate of nearly 40%...
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The Ten-Company Structure (1996)
In January 1996, a new ten-company structure was announced,
replacing the previous eight company structure (Refer Table V).
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Under the new structure, the previous Consumer
Audio & Video (A&V) company was split into three new companies - The
Display Company, the Home AV Company and the Personal AV Company. A new company, the Information Technology Company, was created to focus on Sony's business interests in the PC and IT industry. The Infocom Products Company and the Mobile Electronics Company were merged to create the Personal & Mobile Communications Company. The other companies formed were the Components & Computer Peripherals Company (formerly called the Components Company), the Recording Media & Energy Company, the Broadcast Products Company, the Image & Sound Communications Company (formerly called the Business & Industrial Systems Company) and the Semiconductor Company... |
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