Sony set poised to emulate Samsung
By Cho Mu-hyun
TOKYO ― From the perspective of Sony’s new chief executive, which company does he want to emulate to reinvigorate the reeling technology giant? Many would be enlisted and Korea’s Samsung Electronics seems to be on his envy list.
Recently appointed Sony Group CEO Kazuo Hirai said Thursday that the company will not give up making innovations, citing Samsung’s product as an example, while saving its faltering television industry.
His mindset is understandable. Sony was forced to downsize its TV unit as its former bread-and-butter industry is quickly losing ground against Korean players like Samsung ― it is poised to cut 10,000 jobs from around 170,000 total employees amid five consecutive years of losses.
In addition, Samsung has successfully nurtured new cash cows including mobile phones, something Sony has not been able to do.
“Samsung’s smart phone is doing really well in the mobile area” Hirai said during a press meeting. “We will continue to make innovations while stressing the importance of a creative mind.”
He stated that a creative mind was the core of Sony and its most important asset and he planned to “bolster creative minds” to raise its technological appeal with fresh ideas.
On television, the new CEO said that he planned to turn around the business to profitability by early 2014 by drastically cutting costs. He expects the measure will make the sector cost-efficient and lead to profit.
He mentioned that he has “revamped” engineers, and hinted on a major investment to develop a new television product to boost recognition and sales.
Through bridging the gap between workers and management, Sony also plans to streamline its management structure so as to accelerate the process from decision to execution.
“Sony will change. Sony’s employees and I stand together to make these goals a reality,” Hirai said while promising a collective effort by Sony and its subsidiaries for change.
The CEO’s announcement of its strategy to stay relevant in the fast-paced technology comes amid a week filled with negative news for a corporation aiming to take its next step forward.
Sony’s forecasts for the latest fiscal year has steeply worsened this week. The outfit is expected to announce next month a record $6.4 billion loss for the year to end-March.
His predecessor Howard Stringer brought much attention as the first foreigner to take helm of the sinking ship that continued to struggle during his six years tenure despite the radical change in leadership.
The result was massive layoffs.
The only strategy Sony deployed since the accumulating deficits was trimming businesses in decline or making cuts to increase profitability. But cutting costs is a short term solution.
Sony declared a return to operating profit in this business year, but it is yet to reveal a more active way to resolve its crisis.
Panasonic and other Japanese TV makers are on the same road, and business pundits across the globe are declaring a defeat of Japan by other emerging young bucks in the market.
Some made comments on what could be seen as a band aid solution. “What we have been doing until now was merely putting some remedy on an open wound,” said a top executive of Sony, who requested anonymity. “But the recent downsizing can be said to be a major operation to give a strong push Sony needs to move forward.”
The executive noted Hirai’s decision of shedding jobs can be seen as a decisive declaration to make changes, while there will be some sleep time before the result of the ``operation’’ starts to show.
He also stated that the low profit margin in televisions is hiding the steady performances in other areas such as entertainment, sound and equipment. He is confident that ultimately, the television industry will recuperate to reaffirm its mainstay status of Sony.
The new CEO has led the group’s entertainment industry throughout his two-decade time as a firebrand within the corporation, most notably PlayStation. His reportedly deep understanding of both software and hardware through the video console brand contrasts strongly with his American predecessor who was deemed to lack experience in television products by experts here.
“We hope his background will bring a synergy affect between the now dichotomous entertainment, content industry and electronics,” said the executive. “His assets are creativity, the spirit of Sony, which will bolster the corporation.”