Blu-Ray and HD DVD: Betamax - VHS 'Format Wars' Redux?

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Case Details:

Case Code : BSTR230
Case Length : 21 Pages
Period : 1975-2006
Organization : SONY Corp.
Pub Date : 2005
Teaching Note : Available
Countries : USA
Industry : Electricals and 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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Background Note

Masaru Ibuka (Ibuka), an engineer, and Akio Morita (Morita), a physicist, established a company called Tokyo Tsushin Kogyo K.K in Tokyo in 1946. The company started with an investment of 190,000 and initially employed 20 employees. It undertook repairs of electrical equipment and also attempted to build new products.

In the early 1950s, Ibuka convinced Bell Labs9 to license their transistor technology to his company. The result was that in May 1954, Japan's first transistor was launched. In 1958, the company was renamed as Sony. The company later went on to introduce several breakthrough products in consumer electronics. Some of them were the Trinitron Color Television in 1968, the color video cassette in 1971, the Betamax VCR (video cassette recorder), the world's first home video system, in 1975, the Walkman in 1979, the electronic camera in 1981, the world's first CD Player in 1982, the first consumer camcorder in 1983, the 3.5 inch micro floppy disk in 1983, 8mm video in 1988, the first digital VTR (video tape recorder) in 1985, and the Memory Stick in 1988.

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Apart from the technological breakthroughs, Sony also expanded globally. In 1960, Sony Corporation of America was formed. In 1968, Sony UK Limited was established.

Sony even established manufacturing facilities in the two countries. It set up a factory in San Diego, USA, in 1972 and another in Bridgend, UK, to cater to the UK and other European markets in 1974. Sony also made several acquisitions over the years.

In 1988, it purchased CBS Records Group, a music label from CBS, which became Sony Music Entertainment. In 1989, it acquired Columbia Pictures Entertainment, a film and television production company, to form Sony Pictures Entertainment. In 2002, Sony acquired Aiwa Corp., a consumer electronics company.

In 2004, it merged Sony Music Entertainment with BMG to form Sony BMG Music Entertainment.

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9] Bell Labs was the main research and development division of US Telecommunications Company American Telephone and Telegraph Company (AT&T).


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