Monday, October 18, 2010

Sony To restore dominance: Farewell Idei

Sony's new CEO hopes to revive its hegemony in the consumer electronics industry

The gradual loss of the global consumer electronics leader, the Japanese Sony Corporation's board had created an internal earthquake.

March 7, Sony ushered in 59 years

The most dramatic one personnel change, the appointment of a board of directors of Sony's U.S. entertainment business professional background head Howard Stringer to replace Nobuyuki Idei as chairman of the company's CEO, has also approved the former executive vice president Ryoji Chubachi Kunitake Ando's successor president.

In response to the executive changes, Sony's public statement is: "To further the electronic, entertainment and technology at the core of enterprise evolution, decided to establish a new senior management team."

Today, Sony has this evening than non. The company's forecast, as of March 31 fiscal year 2004 operating profit margin of only 1.5%, far behind the Samsung and Panasonic and other similar companies. Operating profit in the composition, as the foundation for the Sony e-business is dragging the hind legs. From the market performance, the Sony's flagship Walkman music player in the U.S. Apple Computer's popular iPod in front of the retreat; its television business, profit, also due to face many new competitors from price competition and shrinking, especially in tip such as plasma display technology, Sony lagged behind Pioneer and Hitachi; LCD TV field, Samsung, Sony gradually could not withstand the offensive.

Many people blame the decline of Sony's Nobuyuki Idei, the wrong decision, the U.S. "Business Week" selection in the 2003 five "worst manager" in which Idei faithfully.

"The board of directors of personnel changes mean that Sony has already led the company Idei out of the woods have lost confidence." Long-term concerns of consumer electronics consulting firm, general manager of Luo Qingqi Paller told "Business Week", television, audio, video, Sony, these achievements Myth of the product across the board decline, eventually led to personnel changes are very natural.

In 1999 Nobuyuki Idei as Sony's chairman after the official, Sony has been hoping to change the traditional image of the manufacturer, he stressed that Sony should embrace the Internet age, making the leader in the network society. Some critics have suggested that Sony so focused on games, entertainment, market development, the neglect of the electronic technology of this achievements in the areas of their leadership development efforts.

But Luo Qingqi do not share this view. "Unique technology, unique product, take the high road, of course, Sony's aristocratic status of achievement, but this successful model has been the product of the last century." He believes that since the 1990s, the world has undergone tremendous changes in electronic technology , due to capital market for technology incubation, technology resources to sustain the proliferation of advanced technology is no longer monopolized by large companies.

"Sony has not have to maintain its technological monopoly conditions, Idei is to adapt to the changing economic environment and adjust strategies." Luo Qingqi that Nobuyuki Idei, the strategy itself is correct, is ahead, "but the strategy on the Chao Qian does not guarantee win the market, the fundamental problem is the implementation of this strategy in the deviation. "

However, CCID Consulting's Consumer Electronics Division, a new general manager Xu pointed out that while Idei took office that the end product innovation has been the lack of space, but he has not abandoned the field of electronics that in the hands of cheese. However, the 1990s Yihou innovative electronic products greatly accelerate the pace of life become shorter and shorter, 鎴愭湰 dropping, Suoniqiaqia not adapted to this situation, still rely on its traditional competition between internal departments and excellent for engineers Jinxingjishu innovation, technical resources were ignored, not through the integration of technology resources inside and outside the rapid introduction of new products.

Secondly, Xu new that Sony did not promptly adjust the organizational structure, reducing production costs, resulting in Sony products are still expensive. Local production costs in Japan have more than 5 times higher than surrounding areas, but Sony in the transfer of production bases of slow, there are still 40% of the products in the domestic production.

Idei's confidence crisis began in 2003. Year in April, Sony announced that the company's fiscal year 2002 performance report. Which fiscal Q4 2002 sales down 12%, quarterly net loss of 111.1 billion yen (about 926 million U.S. dollars). To February 2004, Sony forecast operating profit last quarter fell 30% to the lowest 9 years, Sony executives more than a month of hard thinking, finally decided to company policy volte-face.

May 2004, Nobuyuki Idei, the Tokyo company's transformation plan published, vowed again to lead Sony's restructuring plan for the future 3 years put one trillion yen for the development of high-speed Internet services, chips and other technology. Then, Sony's goal is to complete the adjustment of business structure to ensure that the 2006 fiscal year, which represented the 60th anniversary of Daqing, its operating profit at least 10%. But Idei only support for a year.

Luo Qingqi that the high-level adjustment, the revitalization of Sony's electronics business will become one of the core tasks of the business income accounted for a quarter of 70% of Sony's total revenue, but operating profit of only 36% of the total operating profit. Entertainment also will be seen as the future direction. 63 new facilities were CEO grid is not only a master of turn around, and in particular aspects of good entertainment. He had completed a seemingly impossible task: to turn Sony's U.S. entertainment business, and to the Sony to fame.

But Xu also on the adjustment of new expressed concern about the future. "Sony has had years of groping transition, with little success because of the Sony empire is huge internal conflict of interest in innovation and difficult to coordinate." He believes that if only replace the management, did not accompany any change in the organization still difficult to change the management of Sony innovation and path dependence shape over the years.


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