Download - Sony Restructuring
RESTRUCTURING
PRESENTED BY:
AAKASH SINGHABDUL GAFOOR KHANABHIJEET MEHROTRAABHIJEET SAHAABHIMANYU KUMAR
ABOUT SONYIt was incorporated in 1946 named as
Tokyo Tsushin Kogyo Kabushiki Kaisha (Tokyo Telecommunications Engineering Corporation).
It was changed to Sony in 1960.
Focus on globalisation.
Introduction of Walkman in 1970s which was a huge success.
FIRST RESTRUCTURING (1994)
Reason for Restructuring:◦Recession in Japan economy.◦Stagnation in Electronics Industry.◦Opportunities in Televisions and
Technologies.◦8-company structure was
announced.
Aim was to improve company’s focus on high potential products and to adapt to the changing market demands.
Cont….Eight Companies:
◦Consumers Audio & Video Products Company
◦Recording Media & Energy Company.◦Broadcast Products Company.◦Business & Industrial Systems
Company.◦Infocom Products Company.◦Mobile Electronics Company.◦Components Company.◦Semiconductor Company.
AFTER RESTRUCTURINGAfter implementation of company structure,
changes were made in Sony’s management structure.
But financial performance declined in 1995 because of poor performance of Pictures group and unable to produce innovative products.
Losses incurred ¥ 293.36 bn.
Reorganized and created 10 company structure.
SECOND RESTRUCTURING (1996)
In January 1996 a new ten company
restructuring was announced replacing
the eight company restructure.
Under the new structure previous
consumer Audio & Video Co were split
into three parts namely Display
Company, Home AV Company, Personal
AV Company.
Cont….A new company Information technology
company was also created to focus on
Sony’s business interest in the PC & IT.
Infocom products & Mobile electronics
merged to create Personal & Mobile
communication co.
Components & Computer peripherals co,
Recording media & Energy co, Broadcast
Product co, Image & Sound
Communication co and Semiconductor
Co.
SALES PERFORMANCE
Year Electronics
Game Music Pictures
Insurance
Others
1995 3027 35 481 282 113 52
1996 3283 201 506 317 207 78
1997 3930 408 570 439 228 88
1998 4377 700 660 643 291 84
1999 4355 760 719 540 339 81
CAGR 8.55% 215% 10.5% 17% 31% 11.7%
Unified Dispersed Model In April 1999, Sony announced changes in its
organizational structures.
Sony’s key business division – Consumer Electronics
Division, Components Division, Music Division and the
Game Division were reorganized into network businesses.
This involved the reduction of ten divisional companies
into following network companies – Sony Computer
Entertainment, Broadcasting & Professional Co.
RESTRUCTURING IN 2001Sony announced another
restructuring in 2001.
Aimed to transform itself into Personal Broadband Network Solutions.
Aim was to become leading media and technology company.
IMPICATIONS OF RESTRUCTURING
Failure of Internet Compatible phones due to softwares.
This led to reduce the number of manufacturing facilities and shift some production activities out of Japan.
Failure due to engaging itself in semiconductors to financial services.
Cont….Analysts felt it was due to huge
spending on restructuring which every time resulted unsuccessful.
In 2001, losses incurred100 bn.
Competition to Sony in its core business.