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Competitive Advantage Case Study

Case Title:

Sony: Sir Howard Stringer's Strategic Choices

Publication Year : 2006

Authors: H. Ramaseshan, Sumit Kumar Chaudhuri

Industry: Home Appliances and Personal Care Products

Region:UK Japan

Case Code: CCA0026

Teaching Note: Not Available

Structured Assignment: Not Available

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Since the late 1990s, Sony Corporation, known for its pioneering products like the Walkman, the compact disc and the PlayStation, had been witnessing fierce competition from companies like Apple Computer, Matsushita Electric, Sharp and Samsung. Further, due to several unrelated diversifications, Sony's shares lost two-thirds of their value since 2000. Despite several cost-cutting measures initiated by the former chairman, Nobuku Idei, Sony failed to contain declining sales and operating losses. In June 2005, Sir Howard Stringer, the then chairman of Sony America, was appointed as the new chairman of Sony Corporation (the first ever non-Japanese to be Sony's CEO) and was handed over the mantle to steer the company out of the financial crisis.

Pedagogical Objectives:

  • To analyse the reasons behind the decline of Sony from a global consumer electronics behemoth to trail behind other competitors like Samsung, LG and Apple
  • To discuss the cost-cutting and restructuring strategies at Sony and why they failed to turn Sony around
  • To debate on the strategies announced by Sir Howard Stringer and whether they would enable Sony to regain its leadership in the global market

Keywords : Consumer electronics; Walkman; Restructuring / Turnaround Strategies Case Study; Compact disc; Mobile communication; Global TV market; Digital camera; Cost restructuring; Supply chain management; Internet ready devices; Silo organisational structure; Product interoperability; Structural re-organisation; Group convergence strategy; Middleware; Profit structure

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