Sony Case Study Answers


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Sony is a leading manufacturer of audio, video, communications, and information technology products forthe consumer and professional markets. Its motion picture, television, computer entertainment, music andonline businesses make Sony one of the most comprehensive entertainment and technology companies inthe world



In 1979 Sony revolutionized the music i

ndustry with the world’s first portable personal music player,

known as the Walkman and later the Compact Disc format, which was another revolutionary product in itsown right, not long after the introduction of the Compact Disc, Sony launched the Discman series, aportable CD player.

The first major loss for Sony was in the early 80’s when they brought out Betamax for VCR’s to counterJVC’s VHS format. This was a big learning curve for Sony but later they found a market for Betacam that are

still widely used today in the filming industry.During 1985 Sony launched the Handycam which allowed consumers greater access to personalcamcorders.


products and revolutionary inventions were incorporated into nearly every aspect of our daily lives. More products would be introduced throughout the next several years that would continueto expand and shape the market as it is today.In 1994 we saw the launch of the Sony PlayStation, which became the most successful personalgaming console of all time. It is easy to see why Sony continues being the number one technology companyin the market. Their success has been based upon not only their ground-breaking technology, but also theirinnovative marketing strategies.Sony used to be a household name but their brand name is losing its credibility in this case study wehope to shed some light on these issues.

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Introduction Contd...

Analysts were not too impressed with the new plan, commenting that the plan did not present any formula for growth and it did not differ much from Sony's earlier restructuring plans. As Carlos Dimas of CLSA Asia-Pacific Markets commented, "His (Stringer's) business model is just a continuation of Idei's formula for growth, which meant he doesn't have a new business model. It's a business model that has been made obsolete by the digital era, and if the company is not able to change this model there is no way they will survive."5

Background Note

Sony was started in 1946 as Tokyo Tsuchin Kyogo by Mararu Ibuka and Akiro Morita (Morita)6 in war-ravaged Japan. Initially, the company had 20 employees and capital of ¥ 190,000. Since its inception, Sony focused on product innovation and high quality. Sony started off manufacturing telecommunications and measuring equipment and went on to manufacture transistor radios and tape recorders. The company decided to call itself Sony, as Morita felt that the name was in accordance with its global expansion plans. Sony set up a subsidiary in the US in 1960 and was listed on the New York stock exchange in 1970. It was the first company to set up manufacturing facilities in the US, in 1972.

Sony's products were always innovative. The company firmly believed that such products had a huge demand for them, and did not attach much importance to market research. Sony suffered a major setback in 1975 on account of the Betamax video cassette, to be used in its home video cassette recorder.

However, before the Betamax technology could establish itself in the market, it lost out to VHS, which was backed by top studios in Hollywood. This incident made Sony enter into the content development business, as it was of the view that the technology used was largely determined by the content owners. In 1988, the company acquired CBS records and renamed it as Sony Music Entertainment. In 1989, it acquired Columbia Pictures (which included Tristar) and renamed it as Sony Pictures (Refer Table II for details of Sony's Businesses). In 1968, Sony had introduced Trinitron Color TV, which was highly successful. Another highly successful product was the Walkman launched in 1979...

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