SONY
Background
Sony was founded after World War II in 1946 in Tokyo under the name Tokyo Tsushin Kogyo (Tokyo Telecommunications Engineering Corp.) by Masaru Ibuka and Akio Morita. Japans economy was on a low as a direct result of the World War. Both Masaru Ibuka and Akio Marita merely made a living out of repairing radios and manufacturing small numbers of voltmeters. Moreover, they both were very ambitious and envisaged themselves innovating and manufacturing new electronic products in the future. Their first product under Tokyo Telecommunications Engineering Corp was an automatic rice cooker.
In the 1950’s they decided to take their business global and were forced to change their brand name because their initials “TTK” were already taken. They wanted a name which was not a word in any language for trademark reasons, and in 1958 they officially changed their brand name to “Sony Corporation”. The first Sony branded product was a transistor radio which went on sale in 1955. Shortly, Sony released a few more products shortly that helped there brand popularity; these included the world’s first transistor radio and the world’s first portable television.
Customers
One of Sony’s principles on procurement activities is “meeting the expectations of Sony customers worldwide. Customers expect Sony products and services to offer a high level of value. They also expect Sony to be a good corporate citizen through its operations. Sony’s procurement activities are no exception in meeting these expectations”. (Sony)
Thus, the primary focus for Sony is to keep customers satisfied and this principle is used to continue providing customers the best possible support in return for customers’ loyalty.
Initially, Sony began manufacturing and researching in the telecommunications industry, however gradually they moved into other areas, namely the video game and music industry. These two industries have significantly expanded the company’s profile and the amount of its customers worldwide. Today, Sony employs 4500 people alone in the United Kingdom.
Suppliers
Sony procures parts and materials for its numerous products from a wide range of suppliers from many different global destinations. Sony’s global procurement activities require smooth relationships with its suppliers and these relationships are based on cooperation mutual and trust. Hence Sony places great importance on such relationships with suppliers.
Sony’s belief is that both Sony and its suppliers need to have a good partnership: in order to satisfy customers by providing highly appealing products, and to be good corporate citizens through such activities as green procurement. (Sony)
Procurement Activities
Through the current economic global downturn Sony wishes to shorten its supply chain by reducing purchasing costs and condensing its procurement activities. Sony wants a 20 percent reduction in its purchasing costs which equates to roughly $5.3 billion (US Dollars) by March 2011.
Sony’s planned reduction in its supply chain will mean a decrease from 2,500 vendors to 1,200 in the next financial year (April 2010- March 2011). Sony is attempting to curb the poor company performance in 2008 in which a $1 billion loss was reported.
Previously each individual unit within Sony had carried out their own purchasing activities, but Sony now plans to centralize procurement.
Centralizing purchases may help Sony reduce its headcount and a smaller pool of suppliers may boost its negotiating power when making purchases, stated by Yasuo Nakane.
The head of Sony’s procurement division, Kazuaki Takanose said, “There is still considerable room for improvement in procurement of standard items, such as electrical cables for audio/visual products, and parts that are used in more than one product. We intend to conduct a thorough review with our product design division and make changes such as reducing the number of parts used.”
Products
Sony has had many successful products which have helped globalize the company. In 1979, Sony revolutionized the way people listened to music by introducing the “Sony Walkman”. Furthermore, in 1984, Sony released the “Discman” which was Sony’s first portable CD player. These two products were the starting of many successful products that Sony had released. In 1994, Sony released the Sony PlayStation which was a huge success. Subsequently, Sony released the Sony PlayStation 2 and followed by the “next generation” Sony PlayStation 3.
Future Development
Sony has many future development plans but in particular the “3-D Home Entertainment” which is due for 2010. This project will bring “next generation” home television viewing. It will also be compatible for Sony’s other products such as Blu-ray Disc products and Sony PlayStation 3. It has been forecasted that 3-D home viewing will be a big hit and will emerge in little time. “Should a unifying standard emerge that works across all technologies, the percentage of TVs sold with 3D capability would exceed 10 per cent worldwide in only three years (2011) and by 2015 would account for 16 per cent of TV sales, with just over 400m units sold worldwide”. (Screen Digest).
Sony Believes the future of its product development will be Green.
“We think about every stage of a product’s life cycle – from sourcing materials, to manufacture and waste removal. We’re working hard to make these processes as eco-conscious as we can. We use renewable energy sources in many of our production facilities as well as our offices across Europe and the world. We also consider how we build and maintain our factories and what we use for packaging.”