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Sony Corp. (NYSE: SNE) has been on a financial tightrope for years now. Highly-regarded CEO Sir Howard Stringer continues to talk the Sony talk while ignoring the fact that his company's brand equity has finally become a commodity. Does the Sony brand really carry any weight in any product category any longer? Nope. Not in flat-screen televisions, not in portable music players and certainly not in just about anything else.As a result, the company recently posted the first annual fiscal loss in 14 years under Stringer's watch and the prospects are not getting any easier. Apple, Inc. (NASDAQ: AAPL) has made the iPod (and the entire multimedia ecosystem) as ubiquitous as Sony's Walkman product universe from three decades ago, and Sony's arrogance at thinking it's a top-of-mind brand has led to a huge decline. Where to go from here?
Similarly to Motorola, Inc. (NYSE: MOT), Sony has not had a hit product in years. It's cranking out uninspiring commodity electronics products, but so are rivals old and new. The PlayStation 3 has been a hit from a sales perspective, but not from a profit perspective. .
Can Stringer revive Sony by reinventing the company through somehow magically combining its hardware and entertainment divisions more than it has in the past? He's deluding himself if that's the only strategy. Again, why would anyone buy anything Sony? Outside of its software content for video games (and the gaming consoles themselves), there's little reason to buy Sony over any other brand in any category. Stringer can still talk, but he's not walking -- and the plank is waiting.
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Reader Comments (Page 1 of 1)
7-01-2009 @ 5:45PM
Iridium said...
The problem is that you have a media man running a consumer electronics corporation. Stringer has no clue how to run a real company that has to produce a product for profit.
Sony diversified outside of its core demographic and in doing so lost it's core market. It is what happened to GE, Microsoft, Nike, and to GM.
When you neglect your history and expand your company into sectors it has no business operating in, you will eventually fail.
7-02-2009 @ 5:48AM
Someone said...
It's not just Stringer who placed the company at it's current position, ( he's only Sony's president since April 2009 ), it's the old Japanese labour culture too.
Stringer know he has to change that, and cultural habits are hard to change.
I think Stringer has a better understanding what consumers want on how to place the right people on the right positions, but you won't see much results of his efforts until mid 2010.