Being Global with Sony Corporations

Sony Corporations is an International Company based in Tokyo, Japan. Sony states their purpose is to “Fill the world with emotion, through the power of creativity and technology.” (Purpose para. 1). Their values include; Dreams and Curiosity, Diversity, Integrity and Sincerity, and Sustainability. I chose Sony Corporations as my target international company, because they are known all around the world as a global figure for electronics, gaming, entertainment, financial markets, and much more. Based off my reading of Being Global: How to Think, Act, and Lead in a Transformed World, I found that Sony Corporations is a major global leader in its field. Authors of Being Global: How to Think, Act, and Lead in a Transformed World Angel Cabrera and Gregory Unruh (2012) stated, “Global leaders craft solution by bringing together people and resources across national, cultural, even organizational boundaries….Global leaders understand the cultural, social, or political differences that keep contributors apart and find ways to build, cultivate, and connect them despite sometimes because of, those differences.” (p.12). Seeing how one of Sony Corporations main values is Diversity, I can see how they have been able to incorporate Sony on a worldwide level.

SWOT Analysis

When performing a SWOT Analysis on Sony Corporations I was not surprised by the Strength, Weaknesses, Opportunities, or Threats that the Corporation is facing currently. Some strengths that I found during my SWOT Analysis was they have a strong brand, diversified business, and popular profitable products. Sony is a very popular brand, not only in the United States, but they are known all around the world. This allows Sony to attract a customer base, which makes it easier for them to offer new and current products. Greenspan (2017) found that “diversification limits market-based risks and improves the stability of Sony’s business.” (Sony Strengths (Internal Strategic Factors) para. 3) Popular profitable products are a strength because despite competitive rivalry from multiple different businesses, Sony can ensure profits.

An example of a popular profitable product would be Sony’s play station. Sony’s weaknesses, or “the internal strategic factors that limit or reduce the company’s performance.”, are lack of dominant mobile devices, vulnerability of databases and network, and imitability of some products. Sony Corporations mobile devices are faced with competition from other major companies such as Apple, Android, Google, and Samsung. Compared to these competitors, Sony’s mobile devices are small players in the market. In this technologically advancing world, with a high dependence on online services, Sony’s vulnerability of its databases and networks is increasing. This weakness not only concerns Sony, but also their customers in relations to data safety. Imitability of products is a weakness to Sony Corporation because anyone can imitate the company’s products. For example, the company’s cameras and home theater equipment can easily be imitated by outside competitors.

Some opportunities that can help Sony boost business growth and profit are to further business diversification, new product development, and rapid innovation. By building on the company’s existing competencies, Sony can begin to explore more opportunities in similar industries. Sony also has many opportunities to cultivate new products to generate new income. Author on Big Think Dominic Basulto (2011) explains Rapid innovation as “Technology is transforming innovation at its core, allowing companies to test new ideas at speeds-and prices-that were unimaginable even a decade ago.” Rapid innovation can give Sony a competitive advantage, considering the extreme competitiveness of the electronic/entertainment industry. Sony faces the following threats: cyber-attacks, competition, and software piracy. Cyber-attacks are a major threat to many businesses, but especially Sony because the company continues to rely on online services. Competition is an obvious threat to Sony, seeing that they are faced against rivals such as Apple, Samsung, and many more. Other companies continue to be aggressive in the worldwide market as well as Sony. In terms of maintaining profitability, software piracy creates challenges. Software piracy can be related to imitation, which is included in one of Sony’s weaknesses, which can decrease Sony’s revenue.

History of Sony

Before expanding into a major international company, Sony, formally known as Tokyo Tsushin Kogyo K.K. (Tokyo Telecommunications Engineering Corporation), started as a small company in 1946. Co-founders of Sony Akio Morita and Masaru Ibuka only had a capital of 190,000 yen, twenty employees, and was located on the third floor of a Department Store. At first, they started out repairing old war-torn radios and made adapters that could easily make medium-wave radios into all-wave receivers. Before they knew it, demand for such radios were quickly rising. They went on to design electrically heated cushions, record pickup, and were offered to repair and remodel “G-2” receivers. In the process of finding new products, Sony was interested in wire recorders, but after being shown the tape recorder by the Civil Information and Education section, they decided that it had much better potential than a wire recorder, and thus the wire recorder was completely forgotten. And from there on, Sony proceeded to grow as a company, not only in Japan but abroad.

It wasn’t until 1953, when Morita visited Philips in Holland, did he decide to concentrate the company’s energy on producing exports on an international scale. Phillips was an electronics company based in Holland but exerted a pronounced influence on the world of electronics. Morita wrote to Ibuka stating, “I am deeply encouraged by the sight of Phillips and am fully convinces that we too can sell our products all over the world.” (The Fruit of Morita’s Trip para. 8). The plan was to start with international exports and then slowly expand into setting up international offices, such as Agrod and Superscope, two companies bought by Sony to start marketing in the United states be Sony Corporations of America was established.

Expansion of Sony Corporations has found its way into Asia, Europe, Latin America, the Middle East and Africa, North America, and Oceania. In total Sony has expanded into 12 countries in Asia, 35 countries in Europe, 7 countries in Latin America, 17 countries in the Middle East and Africa, 2 countries in North America, and 2 countries in Oceania. On Sony’s website, they have the history of Sony offered in chapters to readers. Chapter 10 of Sony History explains how Sony expanded into the United States. Titled “Sony Corporation of America” it states, “Sony’s decision to shift focus from the domestic to the international market took seed during Morita’s 1953 visit to Phillips.” (Sony Corporation of America para. 1). Because Phillips was succeeding in the international market, Morita believed that Sony could as well. He began to direct Sony to start concentrating on producing exports for the international market. After years of exporting overseas, Morita decided that “overseas marketing is an overseas business” and began setting up overseas offices beginning in New York, Hong Kong, and Zurich. In February of 1960, Sony Corporation of America was officially established to manage marketing activities in the United States.

Before Sony Corporation of America was established, in September 1957 Sony had two companies contracted, Agrod and Superscope, to act as marketing agents in the United States. So, they had already had a footprint present in the United States before establishing Sony Corporation of America. Well aware of the risks, Morita stated “In light of Sony’s current situation, we may be acting a little prematurely. But a business that doesn’t take advantage of its opportunities doesn’t deserve to be called an enterprise. We may be overextending ourselves, but the time to act is now. We at Sony don’t believe in shying away from the hardship that comes along with a good opportunity, and we ask all our employees to uphold this spirit.” (Sony Corporation of America para. 5).

Sony Corporations Applied to the Book Being Global

The book Being Global: How to Think, Act and Lead in a Transformed World covers a broad range of factors to becoming a global leader. It starts off really educating the reader on what a global leader is, and also gives examples of global leaders such as Shai Agassi, who “abandoned his position as the heir apparent of the global software giant SAP AG.” (p.11) He left to follow his vision of environmentally friendly vehicles. The authors focus on three main topics connected to global leadership: Global Mindset, Global Entrepreneurship, and Global Citizenship. One of the main characteristics I found in the book was Global Mindset. Global Mindset really focused on culture and cultural value, and how there is no shortcut to gaining a global mindset. Next, the authors focused on Global Entrepreneurship. Authors Cabrera and Unruh (2012) state, “entrepreneurship is the process of applying resources and assuming risks in the creation of new value, with the expectation of receiving some reward.” (p. 79). Another main point touched on by the authors was global citizenship. Global citizenship focuses more on the political and governmental side of global leadership. They discuss topics such as corruption, developing Partnering Against corruption Initiative (PACI), and standards of practice. In the authors conclusion “Being Global: A Beginning” they cover the United States history and state, “Those of us now living have received a priceless bequest from our predecessors: a global world founded on a global marketplace.” (p.166). By using our history as an example, the book shows how being a leader can make a difference.

Being Global: How to Think, Act and Lead in a Transformed World discusses many topics on Global Leadership, but the one topic that stood out to me regarding Sony Corporations was Global Mindset. Cabrera and Unruh (2012) state, “A global mindset arises through the development of three different types of personal capital: global psychological capital, global intellectual capital, and global social capital.” (p. 24). Global psychological capital can be described as leaders who analyze situations from multiple different viewpoints. Cabrera and Unruh (2012) found “they have a driving interest in learning about other people’s perspectives…” (p.24). I believe that Sony was good at global psychological capital at the start of the company, because you see how they tried to find other people view points to make their company better.

An example would be that Inkuba went to the United States in order to learn why their market of tape recorders was reaching outside of the Education Market, while Japan’s was stuck in the Education Market. Also, on Sony’s website they state one of their values is Diversity and too “Pursue the creation of the very best by harnessing diversity and varying viewpoints.” (Diversity para. 1) Global intellectual capital can be described as leaders learning about different parts of the world. Sony has now expanded into 75 different countries and is known all across the world as a leading electronics/entertainment brand. I believe that they also have a strong global intellectual capital because you can see in the history of Sony, that they did research into opening overseas offices, and began with international exports and small businesses before completely expanding into the United States with the Sony Corporation of America. Lastly, global social capital can be described as leaders who have a social network of friends, colleagues, and contacts go beyond their country.

Looking back on Sony’s history again, we see how Inkuba had friends in New York City and Holland. These friendships lead to the global expansion of Sony. One downfall I believe Sony has is under the topic global entrepreneurship on convergence. While discussing convergence Cabrera and Unruh (2012) state, “Convergence can, however, be misleading. While similarities in consumer preference open the doors for new markets, similarities often mask subtle but important differences that can, and often do, cause a product to flop.” (p. 92). I concluded that convergence was one of Sony’s downfalls because, like stated above in Sony’s weaknesses, they have an imitability of some products and a lock of dominant mobile devices. Some of their products such as home theater systems and cameras are highly imitable in today’s market. Also, their lack of a dominant mobile device in the market is because of their similarities to rivals mobile devices such as Apple and Samsung. While these mobile devices do have “subtle differences”, Sony’s fall beneath competitors in the market.

Conclusion

Sony Corporations is a major global leader in its field of electronics, gaming, entertainment, financial markets, and much more. Known around the world, Sony has been able to expand their corporation into 75 different countries. While doing a SWOT analysis on Sony Corporation I found the strengths, weaknesses, opportunities, and threats to the company. After researching the history of Sony Corporation, I was able to see how their strengths and weaknesses formed throughout the years, and also how their opportunities and threats have grown because of the ever-changing market. Starting off by fixing war-torn radios, Sony has continued to evolve and grow with the changing market of technology in today’s day and age. Also, I found how Sony Corporations finally expanded into the United States. By starting off with a few businesses to test the market of the United States, Sony Corporation continued to grow their business on an international level by establishing Sony Corporation of America.

Being Global: How to Think, Act, and Lead in a Transformed World really focuses on three main topics: Global Mindset, Global Entrepreneurship, and Global Citizenship. Sony Corporation shines through on global mindset with global psychological capital, global intellectual capital, and global social capital. It does take a downfall under global entrepreneurship on convergence, which discusses how similarities in products against competitors can be good but also create a product flop. Discussed above, two of Sony’s weaknesses are lack of dominate mobile devices and imitability of products. Because Sony faces many rivals in the same market, similarities of products is bound to happen. For example, Sony is faced against companies like Apple and Samsung in the mobile device market, both of whom are dominate in the market. While Sony is not dominant in the mobile device market, like its competitors, it is dominate in other markets such as electronics and entertainment. With a focus on the value of diversity, Sony Corporation continues to push themselves to find different viewpoints from around the world. Continuing to push the boundaries on international borders and technology, I believe Sony will continue to be a global leader in today’s market.