PDF [4833KB] - Sony
PDF [4833KB] - Sony
PDF [4833KB] - Sony
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Continuing to be one<br />
of the world’s leading<br />
consumer brands<br />
– Nobuyuki Idei, Chairman<br />
By successfully executing “Transformation<br />
60,” <strong>Sony</strong> is enacting bold reforms that will<br />
create new value and generate growth<br />
What is your assessment of the current<br />
operating environment, and what are<br />
<strong>Sony</strong>’s primary goals in this environment?<br />
The markets <strong>Sony</strong> is involved in are undergoing<br />
dramatic changes. In the consumer electronics<br />
industry, we are witnessing rapid<br />
advances in cutting-edge technologies in such<br />
areas as networks and semiconductors. The<br />
industry has been further thrust into an age<br />
of mega-competition by the entry of new<br />
participants from other industries and strong<br />
economic growth in countries such as China,<br />
India and Russia. The needs of customers are<br />
becoming more diverse than ever, and advances<br />
in network technologies are creating<br />
new ways to enjoy music, movies and other<br />
content. The pace of change will only continue<br />
to accelerate.<br />
<strong>Sony</strong> has been a fountain of groundbreaking<br />
ideas since its inception in 1946. The transistor<br />
radio, the Trinitron color television and<br />
Walkman are just a few of our many innovations<br />
that have altered people’s lifestyles. <strong>Sony</strong>’s<br />
hallmark has always been its ability to identify<br />
trends sparked by changes in the times and in<br />
customer needs, and to use that insight to<br />
create innovative products and services. Some<br />
people believe that today’s remarkable pace<br />
of change makes this a time of chaos. At<br />
<strong>Sony</strong>, however, we believe this is a time of<br />
unlimited possibilities and opportunities.<br />
In this environment, it is vital that we initiate<br />
reforms in order to remain a youthful, energetic<br />
company for the 21st century. This is why we<br />
formulated a group-wide mid-term corporate<br />
strategy called “Transformation 60” (TR60),<br />
scheduled for completion in 2006, <strong>Sony</strong>’s 60th<br />
anniversary. Our objective is to position <strong>Sony</strong> as<br />
a truly global company with an operating framework<br />
capable of withstanding dramatic shifts in<br />
business conditions. This will allow us to remain<br />
one of the world’s leading consumer brands.<br />
<strong>Sony</strong>’s aim is to continue to be a leading<br />
consumer brand and evolve as a 21stcentury<br />
global company<br />
To this end, <strong>Sony</strong> is implementing dramatic<br />
structural reforms and a growth strategy<br />
based on the convergence of management<br />
resources<br />
Can you explain TR60 in more detail?<br />
TR60 can be thought of as having two central<br />
pillars. One is a structural reform to enhance<br />
our operational profitability. The other is a<br />
growth strategy.<br />
The first pillar is designed to enhance the<br />
profit structure of our businesses. We are<br />
doing this by cutting fixed costs through the<br />
downsizing of our workforce and the consolidation<br />
of our manufacturing, distribution and<br />
customer service facilities. We are also endeavoring<br />
to reduce variable costs by reassessing<br />
our strategy for the procurement of production<br />
materials.<br />
The second pillar, our growth strategy, positions<br />
home electronics, mobile electronics and<br />
entertainment content as core businesses and<br />
focuses on the convergence and centralization of<br />
management resources within the <strong>Sony</strong> Group.<br />
In the home electronics category, we believe<br />
that the role of the television as the centerpiece<br />
of the living room will be enhanced by its<br />
increasing ability to be linked up with other<br />
electronics devices and access a wide range of<br />
content. In the mobile electronics category, we<br />
plan to accelerate the convergence of mobile<br />
handset communication functions and audiovisual<br />
functions, such as those found in video<br />
cameras and digital still cameras, in a manner<br />
similar to that in which functions have already<br />
been added to cellular phones.<br />
Concurrently, <strong>Sony</strong> is making substantial<br />
investments in key components such as semiconductors<br />
that we believe are strategically<br />
important. By increasing the proportion of<br />
key components produced internally, we plan<br />
to increase the proportion of added value<br />
captured by our finished products. We believe<br />
that this will further enhance the differentiation<br />
of our products from those of our competitors.<br />
An additional goal is to maximize<br />
operating efficiency by leveraging information<br />
systems to strengthen both our demand and<br />
supply chain management operations.<br />
Our convergence strategy for the entertainment<br />
business is equally important. We plan to<br />
capitalize on our entertainment assets in<br />
music, pictures and games to increase the<br />
value of our content. At the same time, we will<br />
accelerate the convergence of entertainment<br />
content and electronics products, building a<br />
new business model that is suited to the network<br />
era. Through these activities, we intend<br />
to generate further growth in our entertainment<br />
business, positioning us even more firmly<br />
as a global media and content company.<br />
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