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Analysis and Case Study on Sony Corporation

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Added on  2020-05-08

Analysis and Case Study on Sony Corporation

   Added on 2020-05-08

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Quantitative Business Methods
Analysis and Case Study on Sony Corporation_1
IntroductionThe present report is developed for providing an analysis of the organizational changes inthe Sony Corporation responsible for its preset growth and success. This has been carried outthrough analyzing the case study of ‘Sony Corporation’ that has highlighted the strategiesadopted by the Sony for overcoming its declining profitability. The case study has provided ananalysis of the performance of the company since the few past years in order to provide anevaluation of its decisions. The report has provided an evaluation of the decisions that thecompany has taken for improving its growth and profitability.Analysis of Performance of Sony Corporation as per the Case StudySony Corporation, a leading Japanese multinational electronics company, has diversifiedbusiness including electronics, entertainment and financial services since its establishment. Thecompany since its establishment has undergone various structural changes for improving itsfinancial performance. The company attained an international recognition for its electronicproducts soon after its establishment in the year 1971 (Farrell, 2008). However, its financialperformance suffered a setback in the consecutive years due to the impact of foreign exchangerates and increasing competition in the global marketplace. The company’s financialperformance has been declining over the past few years. The company has recorded an operatingloss from the period 2010-2012 due to degrading performance of its business segments such asconsumer products and services and professional devices and solutions. The increasingcompetition from the global competitors such as Samsung, Canon and LG further impactednegatively its sales in the international market. The company recorded an operating loss of about¥456.7 billion in the year 2012 with a significant increase in the capital expenditure to about¥295.1 billion (Sony Corporation, 2012). The main reason for the declining sales of the company was attributed to its existingorganizational structure. The company was operating is several business segments and thus lostfocus on its major segments. The company operates in various divisions that are entertainment,insurance and chip manufacturing. The major operations of the company are focused on theelectronic products such as audio and video equipments, radio, television and many others. Assuch, the company is presently focusing on transforming its organizational structure for
Analysis and Case Study on Sony Corporation_2
overcoming its present business challenges. The CEO of the company has introduced a newmanagement structure ‘One Sony’ in the year 2012 for reinforcing and integrating its overallbusiness structure. This is done mainly to succeed in the global competitive marketplace byfocusing on the company’s core competencies and strengths. The company is estimated to recordan increase in the revenue by 5.2% on an annual basis with the transformation of itsorganizational structure (Sony Corporation, 2012). Evaluation of the Success Attained by the Decisions of Sony through Demonstration of theReasonsThe company was believed to have a downfall in its financial performance due to itsdiversified organizational structure with several business segments having their own mission andvision statement. Also, the negative impact of foreign exchange rates after the downturnexperienced by the economy of Japan due to Earthquake and floods in the year 2011 has alsoimpacted its performance to a large extent. The company with its existing organizationalstructure is not able to focus on a major business segment. The increasing competition in theexternal marketplace also had resulted in reducing the sales and income generation of thecompany. The CEO of Sony Corporation in order to overcome from the existing challenges hasimplemented new structural changes in its business segments for improving its competitiveposition and overcoming from the operating losses. The new organizational structure introducedby the management ‘One Sony’ focuses on reinforcing its diverse business segments so that itcan devise strategies for improving the performance of its major business units(SonyCorporation, 2012). The strategic shift of the company is intended to integrate its operational activities so thatit can focus on its core capabilities and competencies. The reorganization of the companystructure is believed to achieve the satisfaction of the customers through emphasising onelectronic products market and thus securing its competitive image (George, Frynas and Mellahi,2015). The company has also announced a strategic plan in the year 2012 for overcoming itspresent business challenges as follows:To strengthen its core business in the area of electronics productsTo undertake expansion in the emerging markets
Analysis and Case Study on Sony Corporation_3

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