How Sony Lost Its Mojo (And How It Plans To Get It Back)
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.
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
Latest News
Kantar: AVOD Subscribers Double In 12 Months
Study finds Aussies happy to watch ads on their streaming services. Or, are they just putting the kettle on more often?
Val Morgan Digital Exceeds All Campaign Uplift Benchmarks Via A 12-Month Brand Metrics Study
Val Morgan announces it has exceeded all its campaign benchmarks. Still can't get under an hour for the City To Surf.
Australian Retirement Trust launches monster of a campaign, by M&C Saatchi and Bohemia
Get offered a seat on the bus today? Knees creak like an old pirate's galleon? This retirement ad may be of interest.
Print Audits To Discontinue As Audited Media Association Of Australia Pivots To Support Influencer Marketing
Is it just B&T or are audits in the media industry suddenly becoming murkier than Roxy's husband's tax returns?
News Corp Australia Launches 2024 National Education Advocacy Initiative With Expanded Program
News Corp set to shine a light on the nation's schools in new series, giving illegal bikie gangs a well-earned rest.
Decoding The Consumer Maze: Urban List Report Reveals How Modern Shoppers Spiral From Discovery To Purchase
Latest report unravels a shopper's journey from the joy of discovery through to a nasty letter from a debt collector.
Cosmo Returns To Australia!
Ever get the feeling we've weirdly warped back to 1988 at the moment? Confirm it with the relaunch of Cosmo in print.
People & Culture Consultancy Human Kind Collective Launches To Plug HR Gap For Media Agencies
Does the very mention of HR have you struggling to remember last year's Christmas party? Get the sweats with this news.
‘We Want To Be A Growth Partner, Not Just A Media Buyer Or Someone That Makes Ads’ – Bohemia Boss On Agency’s Ambition
B&T's chatting with Bohemia boss Paul ‘Hutch’ Hutchison. Although we do think 'the dagger' a far superior nickname.
Initiative’s Geoff Clarke: ‘Youth Hits Targets With Enthusiasm, Experience Hits The Targets You Can’t See’
Initiative’s CCO Geoff Clarke on the value of experience in agencies. Not to mention quoting lines from Pulp Fiction.
The Iconic Teams Up With 5 Aussie Athletes For Latest Campaign
Fashion label brings in the athletes for new campaign, many of whom appear to have prepped with re-runs of Zoolander.
Seven West Media Secures New Director Of News & Current Affairs
After a tumultuous few weeks, Seven unveils director of news & current affairs. And B&T never uses tumultuous lightly.
Seven Network Expands NSW Sales Team With Two New Group Business Directors
Seven ramps up its NSW sales team. Both of whom are well versed in pronouncing Manu Feildel's croque-monsieur.
New PR Subscription Changing The Game For Aussie Start Ups
Need better PR? You can now buy it via a monthly subscription. Price does not include a fascinator or Moet piccolos.
Paul Kent At Centre Of Fresh Scandal After Alleged Street Brawl
Do you long for the fights, gouges & testicle grabs of footy's glory years? So too, it appears, does Paul Kent.
DiDi Taps Disney’s Tim Farmer For Head Of Brand Marketing Role
Disney's Tim Farmer shifts over to rideshare company DiDi. Taking with him his Donald Duck coffee mug & mouse ears.
As Sure As Night Becomes Day, The End Of Third-Party Cookies Has Been Delayed
The question remains: what will we see first? The end of cookies, alien invasion or Jesus's second coming?
Fast 10: Scoundrel’s Tim Bullock Explains What Shane Warne & Salt-N-Pepa Have In Common
It's a Fast 10 with Scoundrel's Tim Bullock. Make it sound even faster by sucking on helium while reading it.
Outbrain Snatches Chris Oxley From Foxtel Media
Foxtel's Chris Oxley shifts over to Outbrain, but not before having his press photo taken in the wilds of the Daintree.
oOh!media & POLY Partner With Greening Australia For OOH Awareness Campaign
Like to quell the road rage with super cute pics of fluffy marsupials? This outdoor's just the ticket.
Are Media Cares For The Carers In Its Latest Social Change Campaign
Are Media calls on the government to add super payments to carers' payments. Remains silent on AUKUS, however.
In A Fragmented World, Engagement Is King
Today, B&T TV's talking fragmentation & engagement. But not in a down-on-one-knee sense of the word.
Kyle Sandilands On Advertising: “We Want Return Business. It’s No Good Just Taking Someone’s Money”
Kyle & Jackie O finally arrive on Melbourne radio. As yet, no sign of the monotonous and bitter AFL-NRL debate.
Sydney Comedy Festival: Taking The City & Social Media By Storm
Sydney Comedy Festival 2024 is live and ready to rumble, showing the best of international and homegrown talent at a host of venues around town. As usual, it’s hot on the heels of its big sister, the giant that is the Melbourne International Comedy Festival, picking up some acts as they continue on their own […]
Global Marketers Descend For AANA’s RESET For Growth
The Australian Association of National Advertisers (AANA) has announced the final epic lineup of local and global marketing powerhouses for RESET for Growth 2024. Lead image: Josh Faulks, chief executive officer, AANA Back in 2000, a woman with no business experience opened her first juice bar in Adelaide. The idea was brilliantly simple: make healthy […]
Is Meta’s New AI Chatbot Too Left-Wing?
Meta's chatbot accused of being left-wing after being caught wearing a Che Guevara T-shirt & listening to Billy Bragg.
TV Ratings (23/04/2024): Why Did No One Tell Angela That Farmer Wants A Wife Is Set On A Farm?
As wonderful as this headline is, let's face it, we all know an 'Angela', don't we?
PubMatic Unveils New AI Partnership To Turn Social Posts Into Ads For Any Digital Channel
Here's some nifty tech for turning social posts into ads. Assuming said posts aren't one-star character assassinations.
Intuit Mailchimp Makes A Splash With Its First Australian Brand Campaign
Ever laugh along at a gag you didn't get so as not to appear dumb? Get ready for more feigning with this new work.
GumGum’s Rob Hall: Advertisers Can No Longer “Rely On Binary Descriptions” Of Consumers
If anyone's got their finger on adtech's pulse, it's Rob Hall. He also avoids using the good paper in the office printer
Mastercard Nabs Florencia Aimo From Marriott International
Marriott International's Florencia Aimo jumps from the hotel business to the exploitative credit card one.
Bastion Agency Appoints Cheuk Chiang As New ANZ CEO
Cheuk Chiang takes the reins over at Bastion Agency. But not the rains down in Africa.
Spotlight On Sponsors: Major Sponsorship Wins After A Disappointing Week In Sport
B&T continuing our deep dive into local sport sponsorships & that's despite not a single offer of a free ticket as yet.
Macca’s Marketing Director, Samantha McLeod On Big Mac Chant: “What Was Once Old Is Now Cool Again”
Macca's using the power of nostalgia in latest Big Mac campaign. Well, only for those who've ever eaten one sober.
World Premiere Of Midnight Oil: The Hardest Line To Open Sydney Film Festival 2024
Oil's biopic to open Sydney Film Festival. Here's hoping Molly Meldrum will take his pants down at the premiere.
Entries Are Now Open For The 2024 Brandies, IntelligenceBank’s Annual Brand Marketing Awards
The Brandies are, of course, a prestigious marketing gong and not the mystery tipple favoured by nannas everywhere.