Sony Unveils New Corporate Strategy
Sep 22, 2005
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Sony today announced significant moves to strengthen its competitiveness by focusing on three core sectors: electronics, games and entertainment.

In particular, the Tokyo-based company says it will concentrate on the revitalization of its electronics business through further structural reforms and a well-defined growth strategy.

"Our target is for the Sony Group to achieve consolidated sales of over 8 trillion yen (approx. U.S. $71 billion) and an operating profit margin of 5 percent (electronics 4 percent) by the end of fiscal year 2007," said a Sony statement, adding that this was before restructuring and one time charges.

As a key part of this initiative, Sony significantly reorganized its electronics group today, placing centralized decision-making authority over key areas under the electronics CEO. See today's accompanying news item, Sony Maps Out Reorganization.

"This substantial change abolishes the company system and assures coordination and focus across newly defined business groups," Sony said. "Rigorous horizontal coordination in key areas - product planning, technology, procurement, manufacturing, and sales & marketing - will allow rapid and streamlined decision making across product lines. This will also permit uniform software development that will assure seamless interoperability between our products, eliminate design and product redundancies, and assure decisive and rational R&D planning and spending."

In addition, Sony expects structural reforms to achieve 200 billion yen (approx. U.S. $1.8 billion) in cost reductions by the end of fiscal year 2007. This includes rationalizing unprofitable businesses, reducing the number of product models, and consolidating manufacturing. Those moves are expected to reduce the group's global employee headcount to approximately 10,000.

Sony said it will also review real estate, stock holdings and certain non-core assets with a view to making disposals amounting to 120 billion yen (approx. U.S. $1.076 billion) by the end of fiscal year 2007.

Sony's electronics growth strategy will focus resources on HD products, mobile products and semiconductors/key component devices that can further differentiate its products from competitors.

A division to promote the development of Cell processor-related technology, products and applications will be created, reporting directly to Sony's CEO.

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