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Case Code : BSTR063
Case Length : 19 Pages
Period : 1994 - 2003
Organization : Sony Corp
Pub Date : 2003
Teaching Note : Available
Countries : Japan
Industry : Consumer Electronics
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
On May 7, 1946, Masaru Ibuka (Ibuka) and Akio Morita (Morita)4 co-founded a company called Tokyo Tsushin Kogyo Kabushiki Kaisha (Tokyo Telecommunications Engineering Corporation) with an initial capital of ¥190,000 in the city of Nagoya, Japan.
They gave importance to product innovation and decided to offer innovative, high-quality products to their consumers. The founders introduced many new products like the magnetic tape recorder, the 'pocketable radio,' and more. By the 1960s, the company had established itself in Japan and changed its name to Sony Corporation. During the 1960s, the company focused on globalization and entered the US and European markets. In the 1970s, Sony also set up manufacturing units in the US and Europe. During this period, Sony developed and introduced the Walkman, which was a huge success. It significantly boosted Sony's sales during the 1980s. By the mid-1980s, Sony's consumer products were marketed in Europe through subsidiaries in the UK, Germany and France.
In 1989, Norio Ohga (Ohga) took over as the chairman & CEO of Sony from Morita. Under Ohga, Sony began to place greater emphasis on process innovations that improved efficiency and controlled product costs.
By 1994, Sony's businesses were organized into three broad divisions - Electronics, Entertainment and Insurance and Finance (Refer Table II). Each business division was in turn split into product groups.
The electronics business division was split into four product groups, which produced a wide variety of products. The entertainment division, which consisted of the music group and the pictures group, made music videos and motion pictures.
The finance division consisted of Sony's life insurance and finance business. The company's growth was propelled by the launch of innovative products and by its foray into the music and films business.