Sanyo's 'Think GAIA' Vision and Turnaround Efforts
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Case Details:
Case Code : BSTR251
Case Length : 21 Pages
Period : 2004-2006
Pub Date : 2007
Teaching Note :Not Available
Organization : Sanyo Electric Co. Ltd.
Industry : Electricals and Electronics
Countries : Worldwide
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Sanyo's Deteriorating State
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There had been an erosion in Sanyo's profitability in the home appliances and consumer electronics market since the 1990s and this was due to a combination of factors. First, even as Sanyo had grown in size and number of employees (as of 2004, it employed over 96,000 people worldwide) and come to secure more than half of its sales from overseas operations, it still lacked a proper global management structure to coordinate operations. The company's accounting system also had become outdated. Second, Sanyo's over 300 different business units around the world had focused on market share rather than on profitability. Third, the consumer electronics industry had become commoditized with prices falling rapidly, even as production costs were rising...
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The 'Think GAIA' Vision
GAIA is the name of the Greek goddess of Earth. The 'Think GAIA' vision was based on British scientist James Lovelock's theory that the land, the atmosphere, the oceans, and the living creatures functioned as if they were a single living organism (See Exhibit VII for 'The GAIA Hypothesis'). The 'Think GAIA' vision recognized Earth as a living planet where nature and all life were intimately interwoven. Taking its inspiration from this concept, Sanyo vowed to promote a harmonious balance between technology and the environment through all its future products...
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The Sanyo Evolution Project
The 'Think GAIA' vision was to be realized through a three-year implementation plan (2005-07), called the 'Sanyo Evolution Project' (Refer Exhibit IX for the Sanyo Evolution).
The project represented the commencement of full-scale efforts by Sanyo to surmount the problems faced by it and the beginning of a new phase of 'change' and 'evolution'.
The project comprised three components - Business Portfolio Reforms, Corporate DNA Evolution Plan, and the Financial Evolution Plan... |
Business Portfolio Reforms
"Business Portfolio Reforms" were further categorized into three areas. In the first area, called 'Business Portfolio Evolution,' Sanyo was to evaluate and revamp its business portfolio. Instead of the usual product categories, Sanyo was to reorganize its business under the six solution categories outlined under the Blue Planet, Genesis III, and Harmonious Society programs. The solution categories were: Ecological Co-existence Solutions, Recycling Solutions, Global Energy Solutions, Next-generation Commuter Solutions, Family Relationship Solutions, and LOHAS (Lifestyles of Health and Sustainability) Solutions...
Excerpts Contd...>>
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