Restructuring / Turnaround Strategies Case Study

Sony Electronics: The Turnaround Strategy

Abstract:
Sony’s electronics division which accounted for the major share of Sony’s overall revenue was making losses during the last three years (from 2004). This was due to a decrease in revenues in the audio, video and the semiconductor products of the company. Sony faced challenges from companies across different product categories like Apple’s iPod and also from Sharp and Samsung in the LCD TV segment. Moreover, in August 2006, Dell announced a massive recall of Sony’s batteries fitted in its laptop computers. In a turnaround strategy, Sir Howard Stringer, the CEO of the company, closed the money-losing divisions and undertook diversification strategies through technological innovations. The case gives an insight into Sony’s history and the challenges that it faced from its major competitors. It also discusses the strategic initiatives taken by Sir Howard Stringer in order to turn the company around.

Pedagogical Objectives:

• To get a brief idea of Sony’s inception and growth
• To discuss the challenges faced by Sony from its competitors
• To analyse the strategic initiatives taken by its CEO, Sir Howard Stringer to bring the company back to its growth trajectory
• To debate whether Sony would be able to turnaround or not.

Keywords : Sony; Microsoft; Apple; Samsung; Sharp; Nokia; Walkman; LCD (liquid crystal display) TV; Plasma TV; Battery recall; Restructuring / Turnaround Strategies Case Study; Dell; Trinitron; Turnaround strategy; Playstation; Sir Howard Stringer