Evaluation of Sony Corporation’s strategy

Sony have successfully created an incredible brand name previously, however, its legend seem to be falling apart recently. In fact, Sony’s net profit for the July-September quarter for 2006 falling 94% to 1.7 billion Yen, compared to 28.5 billion Yen for the same period last year (Benson, 8th Nov 2006). The major reasons for the declining profit are affected by the critical strategic issues faced by Sony which became a main drawback for them.

The first strategic issue faced by Sony was the inefficient manufacturing structures which decrease Sony’s quality that badly affects their reputation and caused a decline in product competitiveness. DeWit & Meyer (2004: p192) argue that “the essence of most uniquely Japanese management practice will be they productivity improvement, TQC (Total Quality Control) activities, QC (Quality Control) circles, or labour relation – can be reduced to one word: Kaizen”. They also argue that “the implication of TQC or CWQC (Company Wide Quality Control) in Japan have been that these concepts have helped Japanese Companies generate a process-oriented way of thinking and develop strategies that assure continuous improvement” (p192). However, in the case of Sony, they did not make any improvement or perform well in Kaizen or implement an efficient manufacturing structure that ensure high product quality which affect their product quality and caused a massive damage to the company. For example, there is the recall of 9.6 million Sony Laptop batteries which were liable to overheat and potentially burst into flames where Sony even failed to fully study the problem (Forbes.com, 2nd October 2006) and there are complaints from Japan’s consumer about PS3’s new system (Wonova.com, 15th Nov 2006) which will affect the compatibility and status of Sony badly.

The failure of Sony in effectively