Sony Essay

855 Words Apr 21st, 2014 4 Pages
1. Why did the contraction of the U.S. And Japanese economies and the rise in the value of Yen hurt Sony's exports from Japan ?

The strong rise in the value of Yen and the contraction of US economy resulted in a sharp drop in exports from Japan. The decline in exports was primarily due to a lower demand for consumer electronic products in US due to the slowing US economy, as well as the strong rise in the value of Yen relative to US dollars or Euros making the exports more expensive or less affordable for foreign countries. As exporters saw their sales and profits declining, they started cutting operating costs and slashing orders from their suppliers thus creating a ripple effect in the Japanese economy affecting both production and
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The most immediate impact of the weaker yen is that it makes Sony's exports more competitive and cheaper thus boosting profits of major exporters. A weaker Yen can also reinvigorate the economy and fight deflation by creating a strong demand for products in both domestic and foreign markets as well as could encourage Sony to investment in technology and R&D to be more competitive in the global market place. However a weaker yen could make imports into Japan more expensive.

3. What were Sony's business results and challenges for 2013? How has the value of the yen affected these?

Sony's business results for FY 2013 has been disappointing as it revised its October projection of a 30 billion yen profit to a 110 billion yen or about 1.1 billion loss. Five out of Sony's 9 business divisions reported losses. The only segments that performed well were the smart phones, gaming and life insurance endeavors. Sony has been in a major restructuring phase for the past couple of years with a series of divestitures within some of the peripheral operations. Sony is continuing overhaul some of its core businesses after failing to turnaround two of its most troubled consumer electronics business, by selling its Vaio branded PC unit and spinning off its television business into a separate subsidiary to focus on highly specialized TVs while scaling back output of cheaper models.

However during the first quarter of this year, the story was a little

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