SONY

Sony (or the Sony Corporation) is a multinational corporation with headquarters situated in
the Minato District of Tokyo. As a global leader in consumer electronics. Sony Corporation is
a leading manufacturer of audio, video, imaging, game, communications, key device and
information technology products for the consumer and professional markets. With its
music, pictures, computer entertainment and online businesses Sony grossed an estimated
77 billion U.S. dollars in total revenue for the fiscal year of 2018.

Alongside the manufacturing and sales of professional and consumer electronic devices, the
Sony enterprise also comprises a music division, a motion picture film segment, as well as a
financial service segment. Sony’s biggest segment is its Game and Network Services with
around 17.5 billion U.S. dollars in annual revenue. In 2018, Sony/Columbia grossed around
1.3 billion U.S. dollars in box office revenue in the U.S and Canada alone. As of 2018, the
Sony Group employed about 117 thousand people with the majority of these employees
located in Japan.

Sony also produces a widely popular line of home video game consoles under the gaming
brand PlayStation. The combined lifetime sales of all PlayStation generations are estimated
at about 520 million units as of 2018. In 2017 alone, Sony sold 19 million units of its
PlayStation 4 gaming console. Its two main competitors in the gaming market are
Nintendo’s Wii and Microsoft’s Xbox.
  Sony’s Products and Services

Today the Sony corporation according to the annual report employs about 168,000 people
world-wide in more than five lines of business:
- The electronics business consists of audio, video, televisions, information and
communications devices, electronic components and other.
- Sony Computer Entertainment Inc. conducts the game console and software business.
- Sony Music Entertainment Inc. (SMEI) and Sony Music Entertainment (Japan) Inc. (SMEJ)
take care of the music business.
- Motion picture and television business is conducted mainly through Sony Pictures
Entertainment Inc. (SPE).
- Insurance business is handled mostly by Sony Life Insurance Co., Ltd. and Sony Assurance
Inc
- Other business includes leasing and credit card businesses, satellite distribution-related
businesses in Japan, development and operation of location-based entertainment
complexes.

 Sony’s Operations In Other Countries

Sony's electronics products and services are marketed throughout the world under the
trademark "Sony", which has been registered in 204 countries and territories. Its products
are marketed by sales subsidiaries and unaffiliated local distributors as well as direct sales
via the Internet, throughout the world. In addition to internationalising its production
operations, Sony has been promoting the transfer of research and development activities
and management functions overseas to bring its overseas operations into closer proximity
to local communities and markets.
  Sony’s International business Strategy

There are two types of International Strategy including:

A. Multi-domestic Strategy

- Product customized for each market

- Decentralized control - local decision making
- Effective when large differences exist between countries
- Advantages: product differentiation, local responsiveness, minimized political risk,
minimized exchange rate risk (http://www.quickmba.com/strategy/global/)

B. Global Strategy

- Product is the same in all countries.

- Centralized control - little decision-making authority on the local level
- Effective when differences between countries are small
- Advantages: cost, coordinated activities, faster product development

Sony pursued a global strategy which involved the following:

- Competing everywhere
- Appreciating that success demands a presence in almost every part of the world in order to
compete effectively
- Making the product the same for each market
- Centralised control
- Taking advantage of customer needs and wants across international borders
- Locating their value adding activities where they can achieve the greatest competitive
advantage
- Integrating and co-ordinating activities across borders
- A global strategy is effective when differences between countries are small and
competition is global. It has advantages in terms of: Economies of scale, Lower cost, Co-
ordination of activities, and faster product development
  Sony’s Entry In Other Countries

Sony’s entry into foreign markets appears to have followed the typical internationalization
process. The company initially obtained a license from a US company, Bell Lab, in order to
recreate the transistor technology in its radio. These products were produced with success
and first introduced to the local Japanese market. The products were then exported to
markets of similar consuming habits. Export of these goods occurred via a distributors and
then some time later through the company’s own subsidiaries. Factories were then
established in different markets, where products could be produced closer to the export
market and at a cost discount. The final stage of the FDI process occurred when Sony
embarked upon opening its own R&D and marketing facilities, enabling lasting market
presence and understanding of foreign markets.

The growth of Sony as a company and its technologies occurred within a process of
interaction between the US and Japan. As the company grew, Sony executives gained
knowledge from constant visits to the US, acquired the rights to produce transistors from
the US and found that North America provided a major market for its audio-visual products.
The adoption of the name Sony and the standardization of products such as the Walkman
were adopted with the aim of being a ‘global’ brand (du Gay, 1997)

Sony first embarked upon FDI via a wholly owned subsidiary in the US in 1960. However,
over the last 60 years it has engaged in Joint Ventures (JVs), Mergers and Acquisitions
(M&A) and Strategic Alliances. (E.G. Sony-Ericsson, Sony-Microsoft and Sony-Sharpe)

Throughout the 1980s two important developments indicate how Sony began actively
extending its presence as a global corporation. First, the company aimed to operate in all
markets across the world, to reach as many potential consumers as possible. Second, the
company aimed to reorganize processes of production in such a way so that they would not
be limited to the constraints of the nation state. In such a case, a particular concern was
how the effectiveness and international competitiveness of Japanese companies were
constrained by the value of the Japanese YEN. This meant that goods produced in Japan
were more expensive when exported and in competition with those in other parts of the
world. (du Gay, 1997)
To pursue these aims, Sony adopted a strategy of globalisation that involved moving their
manufacturing and marketing operations to different locations around the world and setting
up ‘local’ operations in different locations around the world. (du Gay, 1997)

One of Sony’s motives for moving its manufacturing operations was a straight-forward
attempt to follow its competitors and reduce labour costs. For example, the first Walkman’s
were manufactured and assembled in Japan so that the company’s management could be
close to operations and make any necessary modifications, once up and running and not
requiring so many modifications, additional assembly factories were established in Malaysia
and Taiwan. (du Gay, 1997)

The gradual move came to move operations so that they could respond directly to local
conditions. For example, Teletext was developed onsite in the UK and Triniton TV was
developed locally in France. (du Gay, 1997)

An additional practical consideration was that by establishing and presenting themselves as

a local company, Sony could use various national and pan regional rules and regulations to
gain the most appropriate and cost effective environment to manufacture and produce its
products. The company could exploit cheap labour in Malaysia, take advantage of grants
there were available to attract new electronic industries in the UK. (du Gay, 1997)

In the 1980s – 1990s, Sony began to rapidly expand into Europe. (See Appendix A- history
timeline). Sony was vigorous in its international expansion. The company chose to expand
into similar markets, such as US and Europe. These markets had large populations, high
incomes per capita and a consumer culture. Therefore, the other two TRIAD regions were
good markets to promote and sell Sony products.

The company’s strategy is to be present in its market of distribution and therefore it

established a number of factories to develop and distribute its products. The objective is to
understand the local market and consumer demands. Sony has a strategy of introducing its
products first to its local market (Japan), testing consumer preferences and then introduces
these products to its international markets.
The adoption of the name Sony (in 1957) was also an attempt to communicate the brand
and its products to the market. Sony was able to do this over a significant period of time.
Sony learnt significantly from technological, productivity and efficiency improvements this
was a stimulant for its international trade and the international product life cycle. (Vernon,
1966)

Today, Sony has developed a strategy to not only create technology but to control the
content that goes into them. Therefore Sony has embarked upon a number of M&As. First
with a 50/50 JV with CBS, which Sony eventually bought outright and also a venture with
Columbia Tristar Pictures, MGM, BMI and a number of media companies. Sony has also
embarked upon JVs with software companies such as Microsoft. The company’s strategy is
to be present across all levels of the entertainment industry.

 Sony’s Operations in India

Sony India is one of the most recognized consumer electronics brand in the country, with a
reputation for new age technology, digital concepts and excellent after sales service. In
India, Sony has its footprint across all major towns and cities in the country through a
distribution network comprising of over 20,000 dealers and distributors, more than 300
exclusive Sony outlets and 25 branch locations. Sony India also has a strong service presence
across the country with 365 service outlets. Manned by customer friendly and informed
sales persons, Sony’s exclusive stores ‘Sony Center’ are fast becoming the most visible face
of the company in India. A distinctive feature of Sony’s service is its highly motivated and
well-trained staff that provides the kind of attentive and sensitive service that is rare today.

Sony is committed to ensuring that both the products and the marketing activities employed
truly make a difference to people’s lifestyles and offer them new dimensions of enjoyment.
Relentless commitment to quality, continuous dedication to customer satisfaction and
unparalleled standards of service is what differentiates us from countless competitors and
reflects a true image of all that is Sony.
 Sony’s Stock Holding in India