How Sony Lost Its Mojo (And How It Plans To Get It Back)

How Sony Lost Its Mojo (And How It Plans To Get It Back)
SHARE
THIS



Two decades ago, Sony was king of global electronics until Apple came along and almost beat it to death. In this opinion piece, speaker, social researcher and author, Michael McQueen (pictured below), takes a look at the brand’s spectacular demise and its surprising resurrection…

The name ‘Sony’ was once synonymous with innovation. Back in the 1980s and 1990s, the Japanese electronics powerhouse was responsible for producing wonders such as the Trinitron, the Walkman, the world’s first CD player, the 3.5-inch floppy disk, and the first PlayStation and Blu-ray player. Although Sony looked the outward picture of business success in the late 1990s, storm clouds of trouble were already brewing behind the scenes.

Michael-McQueen

One of the key challenges was that as Sony had grown, the company had become fragmented to the point where their technologies and new products were not compatible with each other. None of the departments was able to agree on a single product approach, communicate with each other to swap ideas, or agree on a joint strategy.

By the mid 2000s, Apple had well and truly taken Sony’s mantle of innovation and leadership in the world’s music device market. But Sony was also being buffeted by headwinds on other sides too. Sony’s profitability was slipping fast and the company was losing its dominant grip on the world’s television market, having failed to anticipate the rise of flat-screen TVs.

Although Sony’s PlayStation range continued to flourish, it was a rare bright spot in what was quickly becoming a nightmare scenario. Between 2005 and 2012, Sony’s share price sank from $38 to $18 a share. In comparison, both Apple’s and Samsung’s share prices more than doubled over the same time period.

In non-financial terms, too, the mid to late 2000s were devastating for Sony. In 2002, for instance, Sony had been well ahead of Samsung in the Forbes list of the world’s largest 2000 companies. By 2005, however, these roles had been reversed, with Sony slipping to 123rd, while Samsung jumped to 62nd. By 2012, Samsung had risen to number 12 on the list, but Sony was now 477.

Despite this dramatic tailspin, denial was rampant at Sony in the mid 2000s. Although it was plainly obvious that the Japanese electronics giant was losing its competitive edge, Sony’s leadership chose to live in the past, repeatedly pointing to old sales figures and assuming that its current products would automatically reach the same levels its previous successful lines had.

As Sony entered 2013, things were looking grim. The company had suffered four consecutive years of losses and finished the previous year $6.4 billion in the red. Adding insult to injury, the company’s credit rating was dramatically downgraded.

In many ways, Sony typifies many of the dynamics seen in other one-time giants of innovation like Microsoft and Nokia. The dangers that bureaucracy, complexity and complacency pose to any business or brand cannot be overstated.

But there is light on the horizon for Sony.

In April 2012 new Sony CEO Kazuo Hirai identified that the company’s number one problem was its lack of speed in responding to marketplace events. To address this, Hirai got out his pruning shears. His first step was to end Sony’s decade-long marriage with Swedish mobile phone company Ericsson. Next to go were any Sony-owned non-core companies, including a chemical-products business and a unit that specialised in producing small and midsized LCD displays.  Hirai also trimmed Sony’s global workforce by roughly 10 000 employees  and streamlined manufacturing processes so that Sony’s TV business expenses were slashed by half. Even Sony’s profitable music-publishing arm looks likely to be sold off, with company leadership suggesting it no longer meshes with Sony’s other businesses.

Speaking of his resolve to revitalize Sony, Kazuo Hirai proclaimed, ‘There is no time but now for Sony to change. We can’t turn away from making painful decisions.’

Early indications are that Sony is getting it’s mojo back and in a big way. The company’s net profit in the second quarter of 2015 nearly tripled, reaching $685 million. Only time will tell, but early indications are that Sony may well be a powerful example of how businesses and brands lose momentum – and how to turn things around when this happens.

Michael McQueen is a bestselling author and multi award-winning business strategist. His most recent book Momentum: How to Build it, Keep it, or Get it Back (Wiley), is a must-read guide to achieving breakthrough growth, unstoppable vitality and sustained success. It is available in all good bookstores and online at www.MichaelMcQueen.net

Please login with linkedin to comment

Latest News

Why The “No” Campaign Is Just One Long Slippery Slope
  • Opinion

Why The “No” Campaign Is Just One Long Slippery Slope

Not exactly your typical marketing/media piece, but here playwright Ron Elisha (pictured below) explains the damage done by the “No” campaign and the now infamous skywriting on a recent blue-sky Sydney Sunday… My daughter is crying. It’s not that she’s fallen over and barked her knee. Nor is it the trauma of immunization, or the […]

Opinion

by B&T Magazine

B&T Magazine
QMS Goes West With ‘The Leeder’
  • Advertising
  • Media

QMS Goes West With ‘The Leeder’

QMS Media continues to expand its digital portfolio across Western Australia, switching on an iconic billboard in the heart of Perth. Following the launch of two new digital billboards in the major WA regional centres of Bunbury and Kalgoorlie in recent months, ‘The Leeder’ further delivers on QMS’ digital expansion strategy out west. Positioned at […]

PR Firm Text100 Wins NetApp Account For APAC
  • Marketing

PR Firm Text100 Wins NetApp Account For APAC

Global marketing communications agency Text100 has announced it been appointed by data management company NetApp to drive its brand transformation effort across the Asia-Pacific (APAC) region. Following local competitive pitches conducted across the region, Text100 has been appointed as the APAC lead agency out of Singapore, and as the local agency of record in Australia, […]

MFA Awards 2017 Winners Revealed!
  • Advertising
  • Marketing
  • Media

MFA Awards 2017 Winners Revealed!

B&T once again donned the tux, applied the Brut, and primed the liver for last night's MFA Awards in Sydney.

Concrete Playground Launches Voice-activated Nightlife Guide With Google Assistant
  • Media
  • Technology

Concrete Playground Launches Voice-activated Nightlife Guide With Google Assistant

Digital publisher Concrete Playground has unveiled a new app that helps Millennials plan their night out using voice control – the first of its kind to become available in Australia. Concrete Playground’s Guide to Tonight now works with Google Assistant, making it available on a range of Google devices and helping people to decide what […]

Digital Agency Inlight Secures Two Key Client Wins
  • Marketing
  • Technology

Digital Agency Inlight Secures Two Key Client Wins

Independent agency Inlight has announced it has won the digital account for Benetas, a not-for-profit aged care provider in Victoria. Following a competitive pitch process, Inlight was chosen to handle Benetas’ new website design, build and ongoing optimisation. Richard Barker, marketing manager at Benetas, said: “We wanted an agency that could be our true digital […]

AMI Awards 2017 Winners Revealed!
  • Marketing

AMI Awards 2017 Winners Revealed!

With almost 30 awards handed out, B&T predicts plenty of numb bottoms at last night's AMI Awards in Melbourne.

Clems Sydney CEO Andy Pontin Quits
  • Advertising

Clems Sydney CEO Andy Pontin Quits

Sure, B&T flashed the news of Andy Pontin quitting this morning. White lies aside, he's actually still got six months.

by B&T Magazine

B&T Magazine
Adobe MAXes Most Creatives In A Room Record
  • Advertising
  • Media

Adobe MAXes Most Creatives In A Room Record

B&T's journo is reporting live from the annual Adobe Summit in Vegas. Although, "reporting" is somewhat of a stretch.

Opinion

by David Hovenden

David Hovenden
Digital Women’s Network & The Australian College Of Marketing Unveil Latest Short Courses
  • Marketing

Digital Women’s Network & The Australian College Of Marketing Unveil Latest Short Courses

The Australian College of Marketing is collaborating with the Digital Women’s Network to bring new short courses aimed to provide the latest skills across all aspects of the Digital landscape, kicking off in Melbourne and Sydney in 2018. Course content will focus around various topics related to the digital marketing landscape. All courses will run […]

Man working at office desk, looking at computer and scratching head
  • Technology

Where Are Digital & Tech Skills & Salaries Headed?

The rapid pace of technological change in the digital sector is seeing demand for those with the right skill sets outstrip availability, both locally and globally. The individuals who have kept their skills up to date are being well-rewarded financially. Now, Digital + Technology Collective’s expanded annual Skills and Salary Survey will put some numbers and context […]

Disney & ESPN Unify Sales & Partnerships Teams
  • Advertising
  • Marketing
  • Media

Disney & ESPN Unify Sales & Partnerships Teams

Disney and ESPN have formed an even closer bond, announcing a new alignment of the two properties through their media sales and partnerships teams. Instead of entering through three doors, Disney ESPN Media Sales & Partnerships will give media buyers and marketers a refined, singular point of entry for Disney, ESPN Digital and Maker. Nik […]

by B&T Magazine

B&T Magazine
Sydney Start-up Muzaara Partners With Commission Factory To Turbocharge Digital Ad Spends
  • Advertising
  • Marketing

Sydney Start-up Muzaara Partners With Commission Factory To Turbocharge Digital Ad Spends

Sydney-based adtech start-up Muzaara has announced a new strategic partnership with performance marketing platform Commission Factory. Together, Muzaara and Commision Factory are providing SMEs with a secret weapon to skyrocket their online brand visibility and effectively manage and maximise their online advertising campaigns. This partnership will allow both online marketing companies and their impressive roster […]

Kellogg’s Creates AR Halloween Trick Or Treat Experience Via Shazam & Orchard
  • Campaigns
  • Marketing
  • Technology

Kellogg’s Creates AR Halloween Trick Or Treat Experience Via Shazam & Orchard

Breakfast cereal manufacturer Kellogg’s has joined forces with Shazam and digital agency Orchard to deliver a first-of-its-kind augmented reality (AR) Halloween Trick or Treat experience for families. The campaign, which leverages Shazam’s visual recognition platform and recently-launched AR platform, sees Kellogg’s pilot the replacement of physical gifts in cereal packs with a digital experience that […]

Kraft Heinz Appoints Cummins&Partners As New Creative Agency
  • Advertising

Kraft Heinz Appoints Cummins&Partners As New Creative Agency

Kraft Heinz today confirmed the appointment of Cummins&Partners as its new Creative agency after an extensive pitch process. They will be responsible for brand strategy and integrated creative across the expanding Kraft Heinz portfolio including Kraft, Heinz and Golden Circle. A Kraft Heinz spokesperson said: “After an exhaustive search involving a competitive pitch, we have made […]