Sony Case Analysis

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Flaherty 1 Cameron Flaherty 10/27/14 BUS. 400 Sony Corporation – Is the sum greater than the parts? Sony, one of the most recognizable brands on the planet, was founded in Japan just after the end of World War 2. The company first began producing items that were in high demand after the war, such as radios and televisions. The company first began to diversify its offerings in the 1960s and 1970s when they expanded into the life insurance and entertainment industries. Slowly over the years, the name Sony became synonymous with high quality, technological superiority, and innovation. Although Sony has endured an enormous amount of success over the years, they have also fallen on rough times. Since 2006, the company’s Electronics segment has been operating at a loss, while their Entertainment division has seen notable increases in profit margin. Although they have been able to maintain their relevance across a number of different industries, I firmly believe that their time as a global conglomerate is coming to an end. Their Xperia and VAIO brands are struggling to maintain relevance in the mobile products and communications industry, while their television segment was being replaced by Korean newcomers Samsung and LG. In order to turn the company around financially, I believe that the management team at Sony needs to take the Jack Welch approach towards their conglomeration. If a certain business segment is underperforming, they need to either 1) allocate a reasonable R&D budget to help improve that particular segment, or 2) get out of that business segment altogether. If Sony were to pursue this course of action, they would not only notice a decrease in overall debt, but they would also be able to deliver the best product

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