SUCCESS STORY OF SONY

Mr Ibuka and Mr Morita 1996 - Sony 50th anniversary

According to the Concise Oxford English Dictionary, the word innovate means to change something established by introducing new methods, ideas or products. Masaru Ibuka, the founder of this company had these words to start the company, We started with a basic concept that we had to do something that no other company had done before. From these inauspicious beginnings sprang one of the worlds most innovative companies, with worldwide sales in fiscal 2006 of $63.9 billion (32.2 billion) (Business times online, 2007) From the beginning of this organization, the company wanted to be successful by being an innovative organization and so they adopted the following steps to do so: Create a strategic vision Establish innovation as a priority Create organizational structures that promote collaboration Establish process ideas to convert ideas to innovations Allocate resources effectively

Train workforce to be creative and innovative Measures and communicate results efficiently and effectively Recognize creative behavior Reward innovative results (notes by U.Mohan)

Now looking for practical factors which contributed to Sonys huge success as an innovative company In the early post-war period, Ibuka produced products with a very distinct, obvious need. These products did not need a complex marketing or distribution system. An inventors outlook. This is explained by a quotation from Ibuka. To do the job better than anybody else. To do something unique. This attitude helped the company to avoid existing competition from established companies. In 1952 Ibuka went to the United States to explore a possible market for his tape recorder the first major product of the company. While he was there, a US friend told him that Western Electric was ready to license its transistor patent. Ibuka investigated but when he heard the price was $25,000; he left the US knowing the price was too much. He was convinced the transistor would revolutionize electronics, though no one was able to say when and how. With his young engineers in mind, he revived their euphoria with a new project: the transistor radio. The next point was the clarity of its founding concept combining mechanical and electrical skills to produce unique products for new applications. This clear and broad concept attracted people and provided cohesion to their activities. (The Business Times Online, 2007) Innovation is the key determinant of economic development. The success factors are explained by mapping in terms of McKinseys 7-S framework, which are as follow:

SHARED VALUE Quality communication- Building small teams It kept its innovative teams small, which helped them in achieving better and faster communication with the teams STRATEGY Adopted long term horizon Analyzing alternative solution it undertook several parallel project towards a new innovation which then helped them in creating alternatives from which managers could choose the best option. STRUCTURE Involve employees/teams Sony ensured people from different teams coordinated, as it made sure that manufacturing participated on the development team. They rotated engineers into marketplace, into production and other aspects of operations. This helped in transferring technology, which was facilitated because of the broad perspective of the engineers. SYSTEM Setting key standards Sony set few key and stimulating standards for growth of the company, and give employees the freedom to work out for more specific goals and solutions, which helped Sony to keep a very high level of motivation for it employees. STYLE Ideal company It established itself as an ideal company which is free, pleasant and dynamic, where technical staff of sincere motivation can exercise their technology skills to the highest level which attracted talented staff and keep them motivated

Sonys culture Most important and the best factor for Sonys success is the acceptance of failure, as the used trial and error approach. However they would not allow repeated mistakes. STAFF Persistence and practice of hands-on management Both Ibuka (technical genius) and Morita (expertise in marketing and administrative areas) the two founder of the company, visited R&D labs and dealt with technologies. And were supportive to the R&D activities undertaken by their engineers, this then helped them to understand the innovative technologies. SKILLS Talent hunting The recruitment and placement of executive and engineers is given strategic importance, as they looked for talented and innovative people and not someone to just fill the job. EFFECTS OF INNOVATION ON MARKET SHARE OF SONY 1. KUANTAN: Sony Corp is confident of maintaining its 27% market share in the electronics products sector in Asia Pacific this year, said Sony Electronics Asia Pacific managing director Kazuo Nakai. He said despite the unfavorable global economic outlook due to the rising price of oil, the group was optimistic of achieving double-digit growth this year. (The star, 2008)
2.

DFC Intelligence sent us the forecast for console games market

for the next 5 years. Looking at the market trends from Sonys most optimistic point of view, DFC Intelligence predicts the revenues for game consoles (hardware only) to grow till 2009, where it will almost top $20 bn, and fall afterwards. In the best-

case scenario Sony can hope to reach 53% market share, leaving Nintendo and Microsoft with roughly quarter of the market each.

Data Source: ZDNet Research, 2005 3.

From the "more good news for the PS3" feed comes a positive

forecast by the Yankee Group regarding the pricey console. The analyst group believes Sony will lead in next-gen market share by 44% in 2011, with Xbox 360 taking a close 40% share, followed by Wii with a wee little bitty 16% share. That's a safe projection

considering the PS2 sold a gazillion units this last generation. (Joystiq, 2006) 4. Sony India is eyeing 42% market share in the company is targeting sales of 5 lakh cameras in the fiscal 2009, an increase of more than 35% from expected sales of 3.7 lakh units in the current fiscal. "Sony has distinctly been the brand of choice for consumers. We predict that brand adoption will continue to increase in the next financial year as well. Thanks to the companys strong product line up with great products and unique technologies," said Sony India managing director Masaru Tamagawa at a conference. The company introduced 11 new models of still digital (1059)

digital cameras

category in the coming fiscal as against 37% currently. The

cameras

in the Capital on Wednesday. (The Economic Times, 2009)

Founder(s) Headquarters Area served

Masaru Ibuka Akio Morita Minato, Tokyo, Japan[1] Worldwide Sir Howard Stringer
[1]

Key people

(Chairman) & (CEO)

Ryoji Chubachi
(President) & (Electronics CEO)

Industry Products

Consumer electronics Entertainment Audio Video

Televisions Communications and Information Technology Semiconductors Electronic components Motion Picture Music Online Business PlayStation Services Market cap Revenue Financial services US$ 35Billion (2009)

US$ 100 Billion (2009)[2] US$ 10 Billion (2009)[citation needed] US$ 190 Billion (2009) 3trillion y US$ 30 Billion (2009)
180,500(as of 32 March 2008)[1]

Operating income US$4 Billion (2008)[3] Net income Total assets Total equity Employees

Data source: Wikipedia 2009 REFRENCES Notes given by the lecturer-chapter 3, Innovation Workshop The business times online (2007), [WWW], Available from: http://business.timesonline.co.uk/tol/business/industry_sect ors/technology/article1658056.ece [Accessed on 18 March] Wikipedia (2009),[WWW], Available from: http://en.wikipedia.org/wiki/Sony [Accessed on 18 March] The star, (2008), [WWW], Available from: http://biz.thestar.com.my/news/story.asp? file=/2008/7/18/business/21853771&sec=business [accessed on 18 march] ZDNet Research, (2005) [WWW], Available from: http://blogs.zdnet.com/ITFacts/?p=8313 [accessed on 18 march]

Joystiq (2006) [WWW], Available from: http://www.joystiq.com/2006/08/16/ps3-to-lead-in-marketshare-by-44-in-2011-says-yankee-group/ [accessed on 18 march]

The Economic Times (2009), [WWW], Available from: http://economictimes.indiatimes.com/News/News-ByIndustry/Cons-Products/Electronics/Sony-eyeing-42marketshare-in-digital-camerascategory/articleshow/4281913.cms [Accessed on 18 march] BIBLIOGRAPHY

Shu Shin Luh, Capstone, (2003), BUSINESS THE SONY WAY, Paris C.Brook Dobni (2008), The DNA Of Innovation, Journal Of Business Strategy,29(2):43-50 CNET (2009), [WWW], Available from: http://news.cnet.com/8301-17938_105-9912874-1.html [accessed on 18 march] (1278)

QUESTIONNAIRE
Name: Gender: Female Occupation: Service Others Age Group: Student Business ____________________________ Male

Below 18 & Above

18-25

25-40

40

Q.1) Overall, I rate the SONY brand ... Excellent Very poor Q.2) I would rate the after sales services of Sony as.. Excellent Very poor Q.3) The Value added services I got on the purchase of Sony were.. Excellent Very poor Q.4) I would rate the proximity of the locality of the show room.. Excellent Very poor Q.5) The Sony brand fulfills my status needs.. Strongly agree disagree Disagree Strongly disagree Q.6) I would like to recommend Sony to my friends.. Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Q.7) I think Sony charges appropriate price.. Strongly agree disagree Disagree Strongly agree disagree Disagree Strongly disagree Strongly disagree Agree Neither agree nor Q.8) I knew all features of Sony TV before purchase.. Agree Neither agree nor Agree Neither agree nor Good Average Poor Good Average Poor Good Average Poor Good Average Poor

Q.9) They should provide more models.. Strongly agree disagree Disagree Strongly agree disagree Disagree Strongly disagree Strongly disagree Agree Neither agree nor Q.10) Sonys brand name influences my purchase.. Agree Neither agree nor

Q.11) Did you know about SONY Products?

Bravia Cyber-Shot Vaio X-plod

( ( ( (

) ) ) )

Handycam Playstation Walkman Sony Ericsson

( ( ( (

) ) ) )

Q.12) Which product you have buyed in SONY or having interested to buy it? (Tick 3 product)

Bravia Cyber-Shot Vaio X-plod WEGA

( ( ( (

) ) ) ) ( )

Handycam Playstation Walkman Sony Ericsson Sony hi-fi

( ( ( (

) ) ) ) ( )

Q.13) Rank the factor that are influence you to purchase SONY products in the scale of

1 to 6, (1being the highest and 6 being the lowest)

Company brand name Product feature Services Any other (Please specify)

( ( (

) ) )

Promotion activities Price Influenced by others

( ( (

) ) )

........................ Q.14) When you prefer to buy Sony products?

Sales offer Any other (Please specify)

Discount offer

Q.15. View about Sony products? .... ( THANK YOU) (1643)