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
TV Ratings (18/04/2024): I’m A Celebrity Wins Prime Time And Key Demos
Aussie viewers can be a harsh lot at times. Only days after Ellie Cole bled her heart out, she has been sent packing.
Effie&co Launches New ConnectAsia Division To Help Aussie Brands Market To Asian Consumers Overseas & At Home
Not provided is advice on using chopsticks and not spilling ramen down your shirt.
Cashrewards Sets Out Stall For New CMO
Thinking of applying for the Cashrewards CMO gig? Here are some insider tips that, yes, are tantamount to cheating.
‘I Ask For The TV Industry To Stand Up And Defend Itself’ – Seven Boss James Warburton Steps Down
The Seven supremo heads for the exits after five years. Here's hoping the Spotlight team organised the farewell bash.
Poh! Jamie! Adriano! Paramount ANZ reveals its tasty plans for this year’s MasterChef
It's your fan's guide to this year's MasterChef! Although no tips on how to pronounce crudités or use a un fait-tout.
Dentsu’s iProspect Partners With MOOD Tea Ahead Of May Campaign Launch
We love a Mood Tea here at B&T. Although we do store old screws and nails in the International Roast caterer's tin.
Opinion: When Culture Starts Eating Itself: Navigating The Age Of Self-eating Nostalgia
Born boss David Coupland asks is adland going through a nostalgia period? But please, no repeats of Best Of Red Faces.
Who’s Going To Cannes?! The TikTok Young Lions Winners!
It's Aussie adland's next gen! They're off to Cannes with high hopes of bringing back a Lion & a foot-long Toblerone.
Adobe Launches Express Mobile App With Firefly AI
Want to be the coolest kid at Friday staff drinks but forgot your retro Nikes? This new Adobe wizardry may do the trick.
ThinkNewsBrands & IMAA Extend News Publishing Education In Brisbane
Industry duo takes its publishing roadshow to Brisbane. Was disappointed no male attendees were wearing walk socks.
B&T Chats With Wavemaker’s Provocative Pioneers On Their Cross-Pacific Sojourn
B&T TV heads to Wavemaker's Sydney digs to interview two staffers from its New York & LA digs. If that makes sense?
HoMie & Champion Launch “Give One. Get One” Campaign Supporting Youth Homelessness Via Town Square
Much like the fête's prized chutney wears a blue winners sash, so too should this top initiative from HoMie & Champion.
Thinkerbell Takes Us Back To Summer In Latest Work For XXXX
This beer ad wants to take you back to summer! Just minus any chance of a shark attack on your morning bus commute.
Cannes Lions Unveils 2024 Programme Featuring Queen Latifah, Jay Shetty & P&G’s Mark Pritchard
Are you one of the lucky ducks heading to Cannes in June? Check out the headliner acts you'll be queueing hours to see.
Scroll Media Recruits Costa Panagos From Twitch
Costa Panagos set to bring South American flair to the Scroll offices. Assuming that he is, indeed, South American.
Year13, Microsoft & KPMG Australia Launch AI Course For Gen Zs
Born around the 2000s? Need to amp up your AI creds? This guide's for you (although it's not really that age specific).
General Motors Snares Heath Walker From Scania
Do you rage about oversized American cars on our roads? You need to bail up Heath Walker at parties & industry events.
VML Launches New “Envoyage” Brand For Flight Centre
VML unveils new brand for travel operator Flight Centre. Alas, no sign of those paid actors pretending to be pilots.
Subaru Places Media Account Up For Review
Subaru puts media up for review, as adland journos get set for mandatory "agency drives off with..." headline.
TV Ratings (17/04/2024): Contestants Faced With Harsh Realities As Alone Australia Heats Up (Or Cools Down)
Alone still doing the business for SBS. Overly long train journeys not doing the business, but they persist anyway.
Ben Fordham Loses Number One Spot As Ray Hadley Celebrates 156th Ratings Win
The radio numbers are in! Discover who's off for a boozy lunch today & who's waiting for the dreaded HR death knock.
Gourmet Ice Cream Brand Connoisseur Launches New “Thrill Your Senses” Iteration, Via SICKDOGWOLFMAN
Rattling the old "truth in advertising" adage comes this ice-cream spot full of noticeably thin people.
Paramount’s Global Sales Boss: ‘Australia’s Converged Model Is A Blueprint For How I’d Like All Of Our Markets To Be’
Paramount's global sales boss gives local sales ops the thumbs up. Didn't weigh-in on the Lisa Wilkinson debacle.
TikTok Starts Testing Its Instagram Rival In Australia
In exciting news for piano playing cats & brattish pranks in shopping centres, TikTok unveils its Insta rival plans.
Man Wrongly Named By Seven As Bondi Killer Hires Lawyers
Struggling to save for a house deposit? Why not get wrongly identified by Sunrise!
Smartsheet Appoints Indie Agency Sandbox Media To Its Media Account
Can't stand your colleagues? Like to dob them in when they miss a deadline? These work management platforms are ideal.
Boss Not Letting You Come To Cannes In Cairns? Use This Business Case To Convince Them!
Stingy boss won't spring for a ticket to Cairns? Add this to your persuasive argument repertoire. Or grovel.
Alt/shift/ Brisbane Builds Portfolio With Ausbuild Creative, PR, Content & Social Account Win
The Brisbane comms/PR agency lands constructor Ausbuild. Also hoping for a discount on its new glass conservatory.
Young Guns Versus The Old Guard: Who Adds More Value to Our Industry?
Cannes In Cairns poking this hornet's nest in a lively debate. Just so long as the oldies can get up the stairs.
70% Of Aussies Don’t Have Green Power Plans ENGIE Says In Major Brand Campaign Via HERO
Are you the notorious "light leaver on-er" in your flatshare? Quell any infighting with this green energy news.
PrettyGood Launches Offering Brand & Media Solutions For Australasian SMEs
B&T applauds the charitable nature of this new agency. Although we'd hate to see it impact any Chrissie present sends.
A Blunt End: Dolphins Medicinal Cannabis Sponsorship At Risk
Yes, it's another NRL drug story. Yet, thankfully it doesn't involve coke in Kuta during the off-season.
Slew Of New Creative Hires At Leo Burnett Australia
Ahhh, all black! The outfit of choice for agency creatives, David Jones staff and everyone in Melbourne.
Under Armour Unveils Local “Live in UA” Campaign
American apparel brand set for yet another tilt at the Aussie market, as Nike declares "we'll see about that".
Pepsi Launches New Look, Refreshing Classic Fashion Staples Via Special PR
Are you always the bridesmaid, never the bride, as the old saying goes? How do you think Pepsi feels?
Pure Blonde Returns To A Place Purer Than Yours In New Campaign Via The Monkeys
B&T's always been a huge fan of the 'drink yourself thinner' diet plan. So big thanks to Pure blonde, vodka & tequila.