Sony Tries to Battle Its Way Back Up After a Huge Downfall Essays

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Executive Summary At the beginning of XXI century leading Japanese electronics manufacturer Sony Corporation faced operational and financial stagnation. Reported losses were huge even for such a big conglomerate as Sony, net income in 1999 fell to 121.83$ billion from 179$ billion in 1998 and following decrease continued till record 16.75$ billion in 2001. Shareholders worried as the stock price was falling down even though top management made some structural changes: assets were sold, work force was reduced by 17,000. Sony had the only choice to do some reformations in structure, strategy and innovative products because it was losing the war to its competitors in the market. Therefore, “Transformation 60” was launched as a restructuring…show more content…
Executive Summary At the beginning of XXI century leading Japanese electronics manufacturer Sony Corporation faced operational and financial stagnation. Reported losses were huge even for such a big conglomerate as Sony, net income in 1999 fell to 121.83$ billion from 179$ billion in 1998 and following decrease continued till record 16.75$ billion in 2001. Shareholders worried as the stock price was falling down even though top management made some structural changes: assets were sold, work force was reduced by 17,000. Sony had the only choice to do some reformations in structure, strategy and innovative products because it was losing the war to its competitors in the market. Therefore, “Transformation 60” was launched as a restructuring plan for further 3 years. However, issues were bigger than Sony predicted, neither of goals were achieved. Moreover, restructure planned to create divisionalized companies but instead just cut the connection inside. Planned convergence seemed to be leading to divergence while competitors were further developing power in the market. All the considered efforts to achieve 10% operational margin were ruined, while investors became impatient and pressured CEO. This dissatisfaction and fail of reformation led to resign of current CEO who was replaced by Welsh-born Howard Stringer, whose fame came from Hollywood where his restructuring plan resurrected movie market of Sony. Stringer stuck to its well-known policy of job cutting and replacement of
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