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Case Study: Business Strategy of Sony Corporation

Founded on May 7, 1946 in Tokyo, Japan, one of the most successful technological corporations in the world: Sony was created under the two legendary men: the physicist Masaru Ibuka and the physicist Akio Morita (Sony, 2013). They made the decision to set up a company repairing and producing electrical equipment and established Sony under the name under the name Tokyo Tsushin Kogyo K.K. which is Tokyo Telecommunications Engineering Corporation, known as Totsuko. At that time, Totsuko was just a small company with capital of 190,000¥ (~ 2000 $) and around 20 employees compare to giant corporations in Japan such as Toshiba, Hitachi, Sharp, Matsushita with tremendous capital, facilities and labour capacity. Although in 1946 Japan was just recovered from the wartime, while the other giants still possessed enough resource and experience to control the Japan market, Totsuko had no machinery and little scientific equipment and using only their own intelligent and engineering expertise, the young talented group with great ambitious set their first step to the new markets. From 1955, the company continued producing product with the logo ‘SONY’. In 1957, the company decided to change the name of the company from Totsuko to Sony Corporation.

There was a little story behind the name ‘Sony’. it was originally by integrating “SONUS” the original Latin for “SONIC” meaning sound, with “SONNY” meaning a youthful boy. The idea came to Akio Morita when he was visiting the U.S in 1950s, he noticed that many U.S companies’ names are relatively simple with only alphabetic letters, at that moment he realized the name Totsuko was difficult to remember for customer around the world and decided to change to ‘Sony’.

Over a half century, Sony Corporation has always been a pioneer in technological development and acquired reputation for being innovative. Its aim is always to be the Japan’s first or even the world’s first. This is also the reason Sony had many failures in the past due to the fact of being first but it never stop moving forward. Grow from a small company of 20 employees, today, it has become a global corporation consists over 160,000 employees over the world and ranked #38 in the World’s Most Powerful Brands list according to Forbes (2012). Sony takes part in a wide range of businesses including electronics, game, entertainment and financial services sectors with major products such as television, computer, camera, game console, mobile audio, mobile phone and entertainment sectors with Sony Pictures Entertainment, Sony Music Entertainment making it one of the most comprehensive entertainment companies in the world. Famous for being always innovative, Sony may not be the biggest company but definitely, the most innovative, they have brought to humanity a vast number of creations that change the world that we already familiar with such as Walkman, Playstation, Blu-ray. Despite the fact that in recently years, Sony has lost their market’s stand due to economic losses and fierce competitions from Apple and Samsung, however, people still believe in the spirit of an innovative legend such as Sony will never fall down.

Unique Selling Points

One of the major unique selling points of Sony is its innovativeness. In the past where the company is not even a competitor to those giants such as Toshiba, Hitachi or Matsushita, the one strength Sony possessed is intelligence and gradually they proved to the world that they deserve a top position in world most innovative brands. The innovativeness of Sony comes from the strategy of creating their own in-house technology for their product development rather than adopting and relying on market technology. Long before the IPod from Apple becomes the world iconic music device, there was the Walkman from Sony. Introduced on 1st, July, 1971, the first Walkman with metal-cased blue-and-silver TPS-L2 was born as the world first’s low cost portable stereo and achieved great success until now with the sale record of 200 million unit by the time the IPod was introduced.

Product quality and quality management are also major unique selling points making the formidable reputation of Sony. From the original electronics products lines, entertainment and communication devices to robots, Sony always presents to the market premium products with the brand exclusive features in order to deliver to the customer their best cutting edge technology. Furthermore, the brand is also famous for its management system in term of quality enhancement and customer services in an effort to further achieve customer’s satisfaction, trust and reliability.

One more thing that makes Sony a well-known brand in the world as well as a major unique selling point is its strong brand equity . By extending the businesses of the company to a variety sectors including PCs and network products, TVs and Digital imaging, Electronic components and semiconductors, Entertainment and Financial services, Sony has achieved huge brand awareness , and it is likewise enhance its brand equity. Some feature products from Sony such as Bravia TVs, DSLRs Cameras, Playstation gaming consoles, portable music players Walkman and VAIO computers for example. In addition, they even take part in entertainment sector with the Sony Music Entertainment and Sony Pictures Entertainment which are very popular in the world.

Major Problems and Challenges Faced by Sony Corporation

Sony is a multinational organization and has to deal with the dynamic industry in which it is operating. It has developed itself by formulating a steady work environment where engineers had thoughtful appreciation of technology and have worked without restraint as they pleased to focus on development of dynamic technologies and creation of products that people have always desired.

Sony Corporation, which has been a leading corporation once, has reported losses for almost four consecutive years. It declared a record annual net loss of 520 billion yen ($6.4 billion) for the year ends in March 2012. The main strategic problem of Sony Corporation is embedded in its several product lines that provide too many parts of the entertainment value chain. The company’s innovation and operations slowed down due to the introduction of the “empire-building” strategy. It has lead to the weakening of its competitiveness in all of the market segments of its business. In addition to the internal problems faced by the wide product lines by Sony, it is facing other external challenges as well. In late 2000s, global economic crisis caused a significant decline in consumer spending as of recession and resultantly caused a decrease in the profitability of Sony. The overall demand of the products of Sony has declined due to the appreciation of the Japanese Yen as it has lead to negatively affect the purchasing power of non-Japanese consumers of Sony Products. Further, the Great East Japan Earthquake disaster and its consequences also effected Sony’s operations badly and resulted in extensive re-establishment costs. In the presence of these external and uncontrollable challenges, Sony was unable to cope with the increasing competition and it became difficult for Sony to retain its market share within the electronics and game industry. In accordance with such problems the top management team of Sony was comparatively conservative. As a result, Sony lost its competitive edge in the industry due to decrease in its technological innovation. In a nutshell, the primary emphasis of Sony Corporation on restructuring strategies in such alarming and challenging situation leads to enormous and continual losses.

Overview of Sony Corporation Strategies and its Implications

Sony Corporation is a giant in its industry having well-built core competencies . It has economies of scale and wide scope both in production and research and development because of its huge network in Japan, the United States and other countries all around the world. Moreover, its unique quality, technology and differentiated products are other top strategic benefits that can help it to attain competitive advantage in market.

Sony’s business operations have been restructured many times in last two decades. Sony’s first signs of loss began in early 1990s when it experienced a loss of ¥ 293.36b in 1995. The reason behind this loss was primarily the unrelated diversification and the dearth of innovation. New products are imitated very soon by the competitors in the digital era because these products can be produced by assembling widely-available parts. So there always remain the dangers of being entangled in price wars. This can only be avoided by readily adapting changes in a way that competitors cannot keep up. In reaction to this, Sony put all its efforts into restructuring the corporation considering it as a way towards success as there was general trend of diversification in leading companies. It faced heavy restructuring costs in this course but these efforts failed to attain the expected results and outcomes. In 1994, Sony formulated an eight company structure with an aim to create a market-responsive company but the losses prevailed. In 1996, it designed a ten-company structure with a same goal to get the company back to profits. Again, due to unrelated diversifications, heavy decentralization and minimal involvement of board room in major decisions, the losses cannot be reduced. After 1999, the company focused on Internet based products due to dot com burst. This major shift in business focus further worsened the situation. The major reasons for further losses were the lack of consolidation and hence substantial fall in sales. In addition to this, the economic slowdown in the US was also a key reason. Consequently, the focus on core competency was re-established which resulted in regaining profits slightly.

Sony must focus on increasing sales immediately so as to meet their short-term goals and attain success in long run. In addition to restructurings among Sony’s product lines, it should ensure stable profitable trend to avoid more severe decline. In the past few years, it has been able to reduce it cost. It should maintain this reduction so as to increase gross margin in the long run. Moreover, it should utilize the increased leverage and other assets in the ways that can lead to optimum and efficient boosting of sales. Most importantly, it should try to reduce or mitigate the macroeconomic risk which has been a major cause of unexpected losses in previous years.

Critical Evaluation of the ‘One Sony’ Strategy

The most important challenges for Sony are the high competition in industry and the macroeconomic risks. In this regard Sony should re-develop its competitive advantage, regain focus, ensure quality and reduce external factors effect on company’s performance and profitability.

The chief executive of Sony Corporation has emphasized on the fact that it’s the time for Sony to change now. He has given a revival plan that elucidates a major shift from the company’s unprofitable television business. It also planned to cut 10,000 jobs as well. In the new strategy, it is emphasized that the Sony would concentrate on three businesses namely the mobile devices, including smartphones and tablets; cameras and camcorders; and games.

Sony has fruitfully expanded into various business segments (Electronics, Game, Pictures, Music, and Financial Services) since the beginning of the company as a telecommunication company in 1946. It has diversified its product lines and has attained remarkable reorganization in a wide range of sectors. It has enhanced many other resources like research and development, marketing, customer services and even unrelated areas. All this has lead to both positive and negative effects simultaneously. As diversification has lead to the expansion of the company, it has also resulted in decreasing its specialized capabilities. Hence, Sony was unable to keep hold of its competitive advantage in any sector or segment of its business and lost the competitive edge against the highly specialized competitors within each segment.

So it’s the need of the hour that Sony locates a specific segment or sector to focus and specialize in it and then it should restructure the company around that focused segment. This type of restructuring can help the company to utilize maximum of its resources in the most productive and optimal way. The current move of Sony’s strategy is exactly in this line. Sony is about to terminate or integrate its least profitable segments. Such restructuring will lead to the development of a proprietary product collection and special set of Sony hardware and software products that can be used against the highly specialized competitors like the products of Apple. In this way, Sony can have an edge over the competitors in long run as no other company is operating in such wide range of sectors currently as Sony is. Sony, no doubt, will have an incomparable experience in this regard. This type of restructuring can reverse the recent unprofitable trend of the company as it will be a strong positive signal to the market and its competitors enhancing the confidence of consumers and investors.

The segments or sectors of business that should be focused should have the specific features. Sony should focus on such sectors which are already its main segments, namely the consumer, professional & devices segment or the networked products & services segment. Moreover, such segments should also have the prospect or potential to get integrated with various remaining segments. In this way, Sony will be able to leverage most of its current resources. Most importantly, this market segment should be moderate in competition as well. Sony would be able to implement the strategies in such segments where it has bigger market share recently.

Keeping these benefits in view, the mobile devices of Sony are extremely desirable sector to be focused by it. The series of Sony Ericsson smartphones launched with the Xperia brand in 2011 which operated on Android gained an extensive market share and have much more potential. Similarly, the Xperia smartphones can also be integrated with Sony tablets, personal computers and game consoles in this concern. In this way, Sony can be able to lower the cost and increase the demand for such Sony products in the long run keeping the main focus on the abundant competition in the smartphones and tablets markets.

Another sector to be focused by Sony can be of the games. The main reason behind it is that it’s the major segments for Sony in which it has competitive market share. The sector of games can induce synergies among Sony’s product lines. Moreover, the competition in the segment of games business is not as extreme as it is in the other market segments. Sony intends to replace the operations of disjointed lineup of content delivery platforms to expand its PlayStation game network which will offer music and video as well. This is no doubt a good strategic step.

However, one Sony strategy is intending to focus on Sony’s digital imaging business that involves digital cameras and camcorders. This policy is again not very appropriate as Sony will have to face intense competition from Canon, Nikon, and Olympus. Moreover, Sony will also face threats from substitutes such as tablet computers which are highly equipped with advanced digital imaging functions. Keeping all these factors in view, it can be deduced that Sony will encounter great problems in the integration of digital imaging sectors with its other businesses.

Another appropriate feature of the new strategy is the decision of shrinking the TV business as the severe competition from Samsung and LG, the deficiency of synergy potentials and the comparatively low share of market is making it impossible for Sony to attain or retain its competitive advantage.

The focus on certain sectors will provide various benefits to Sony. Sony can start acquisitions within related segments once it has established strong focus. The acquisition strategy will lead to increase market share, to get the economies of scale, decrease manufacturing costs, and provide access to new technologies and patents. An increase in the market share will provide Sony with higher pricing power. The economies of scale will raise its productivity. The reduction in the manufacturing cost will lead to give benefit in a price competition. The technologies and patents will allow Sony to speed up their innovation progress which is slow right now. Sony must start by acquiring smaller companies in its focused market segment and should overpay premiums for the expected synergies as well.

Another main focus of this new strategy is to improve the quality of its products by managing such features at the top level of management in integrated way. The major strength of Sony is its brand name because consumers deem Sony’s products as trustworthy and having high quality generally. Whereas the quality of products of Sony has decreased in last few years. For instance, Sony declared that almost around 535,000 of their VAIO laptops might be in danger of overheating because of the temperature gauge error in 2010. Similarly, Sony had also recalled eight models of Sony digital cameras because of the problems with the image pick-up shortly after its multiple delays in launching PlayStation3. Such quality problems have lead to cost lawsuit expenses and have damaged the corporate image as well. Now, Sony is seriously emphasizing on attaining specialization in its products to avoid any such circumstances in future which is a positive action of this strategy.

Moreover, Sony is expecting to enhance its business in emerging markets with greater focus on the innovation . It is a vital strategy for any business so as to keep itself in the market successfully. This will provide it with more markets’ availability in the long run increasing the sales and hence profits.

However, this strategy is lacking in one very important aspect which is handling the macroeconomic factors. The presence of Sony in the international market has lead to its sensitivity to exchange rates and local economies. No doubt, Sony cannot get direct control over such factors but it can utilize its Financial Services segment to mitigate the risk exposure. Sony can apply this strategy by making derivatives contracts (currency swaps and interest rate swaps) or by taking short positions in particular securities as long as these practices comply with laws and regulation. The most problematic task is goal congruence. It means alignment of the manager’s incentives with the overall firm because such hedging measures can impact the profitability of the financial services segment. If these factors are ignored, they will again lead to unexpected losses to Sony in the long run making all other measures unrewarding.

Sony took the direct action in introducing the company system in the first place. It then performed an organizational improvement synchronized with the changes in the surrounding environment. Its strategy shifted in accordance with Chandler’s proposition that “organization follows strategy”. Sony’s organizational reforms and responding to environmental changes after the bubble collapse were significant. The one Sony and one management system will lead to solve many problems and have the capability of improving the performance of the company as all the major decisions are now to be taken and implemented by the top management. The new approach emphasizes on the strengths of the entire Sony Group as “One Sony” by implementing a rapid decision-making process. With the help of this, Sony’s primary goal is to revive and cultivate the electronics business to create new value in addition to further escalation of the stable business foundations of the Entertainment and Financial Service businesses.

This management structure has reduced the previous complexity of the system and efficiency is expected to be increased. The more top-down leadership is expected to start to attain Sony’s goals for the next years as it is said it’s the key to spot the requirement to ‘create visions’, ‘motivate’, ‘establish direction’ and ‘align people’. The focus is on development of six components for successful strategic leadership that involves determining a firm’s vision, retaining core competencies and mounting human capital . All these aspects are introduced to develop new technology and benefit from a centralized decision making system in the long run.

Sony has faced many difficulties for several years and has now been able to properly identify many of its real problems. The latest strategy will lead to address them to some extent. Although some improvements have been shown in the recent times but still many areas are to be focused on in this strategic change. The basic reason behind it is that Sony is not a market leader now. Resultantly it does not have that old power to influence the direction of the market and follow its own plan. Moreover, the policy of defending its own interests has proved to be exigent. The strategies need not be deliberate always, they can emerge as well. This strategy is good in many aspects and can lead to revive Sony Corporation but still Sony needs to work hard if it wants to survive and regain its market-leading position again.

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Quality Management: Sony Corporation Report

Contribution of quality management frameworks in the success of organizations, sony corporation quality management systems, sony’s management and technical systems, six-sigma quality management, works cited.

Building and sustaining high performance business organizations is a crucial success factor for both manufacturing and services institutions. With the current trend of transformations in the business world, notably as a result of the many changes in technology, there are numerous ways through which entrepreneurs can establish and sustain high performance strategies in business.

There are countless factors which can be implemented by business organizations in the wider business world, to build high performance in all segments of productivity. Quality management is arguably one of the key factors to consider when it comes to creation and sustainance of high-performance business organizations (Moody and Shanks 633).

This is an effective factor whose consistent application can result to the best strategic and tactical outcomes in business. Quality management is one of the upcoming trends that have continued to make outstanding transformations in the contemporary business world. Through this concept, modern day businesses have been able to address the uncertain business environment which is presented by the faster and disruptive changes currently affecting the global populations.

Quality management simply refers to activities which are involved in the determination of quality policies, and their applications in business through ways such as quality assurance and quality planning. Quality control and improvement are some of the main processes involved in the implementation of the practice within business organizations.

The main objective behind quality management is to oversee all tasks that are needed to achieve a desired level of success in meeting the expectations of the customers. As a matter of fact, quality management is just what modern businesses need to cope with the many challenges presented by the rising pressure of environmental factors affecting the business world nowadays.

This quality management research paper features Sony Corporation, as one of the global companies which utilizes the concept of quality management in shaping their business position in the competitive business world.

The current business environment faces many challenges. Business entrepreneurs in all levels are facing increased demand for heightening social responsibilities, technological changes, and strategic thinking ways which have changed greatly over the years. Increased trends of competition and globalization have also been top among the factors which continue to pressurize the global business arena.

With all these demands, there is a need for modern businesses to adopt effective operational policies that will help to build, manage and sustain high performance business organizations in all levels of accountability. Today, high-performance corporations such as Sony, which has come to realize the value of employing quality management in their operational units, are the role models of the successful organizational world.

Sony Corporation is excellent in vast ways. The concept of quality management has consistently seen the company outperform many of its competitors in business, for a very long time. In this case, the company represents a real-world version of a contemporary managerial system.

There are many ways through which quality management systems or frameworks facilitate organizational success. The concept involves the practice of constantly improving performance in business, simply by targeting the end users, while at the same time, trying to address the expectations of the stakeholders.

In other words, this approach would ensure that both the company and the customers benefit equally in the long-term. If anything should be considered in the implementation of the concept, it is the end-users. Customers are of great importance to businesses, and nothing should be allowed to come between organizations and their consumers. The idea of gaining and retaining customers involves a lot of benefits, as well as costs.

The part involving the costs is the most challenging point that businesses have to deal with more wisely and in the best tactical way, so as to remain competent in the market. This explains the reason why many corporations in the current competitive business world would go to the extent of exploiting all their business capabilities, for the sake of satisfying the expectations of their customers.

The concept of quality management has constantly proved to be an effective solution for those organizations that need to make a difference in the market, by gaining a high competitive advantage above their rivals in the business (Evans and William 32). Consumer expectations inevitably define performance standards and criteria. In this regard, customer expectations are the main focus of quality management systems that direct an organization at improving the effectiveness and efficiency of performance and accountability.

By becoming the focus of corporate thinking for organizations, quality management is certain to ensure that products and services produced satisfy the needs of the consumers. This concept plays a significant role in ensuring that customer satisfaction is the most important consideration which comes in the minds of businesses and not only the thought of increasing profits.

Quality management, which has been focused on customers, works to cover the gap which exists between organizational levels of performance and consumer satisfaction. This way, organizations end up coming up with the most desirable products and services, thus achieving consumer satisfaction.

In order to achieve its purpose, quality management systems or frameworks works through a number of elements. Some of these elements include aspects such as completeness of products or services, convenience and accessibility, responsiveness, accuracy of services, consistency, timeliness, and courtesy as it is exercised by staff or employees towards the consumers.

Quality management standards, whether internally conceived or reinforced by the universally agreed ISO 9000, have always played a significant role in the success of many business organizations in the world. ISO 9000 series remains the only main set of international policies and standards that apply to the management of quality frameworks or systems. Some of the standards laid by ISO 9000 would include information management standards and health and safety among others.

The concept establishes a strong framework on how businesses would manage their key processes, towards effective productivity and customer satisfaction. Through this important initiative, which is certain to meet all required standards of customer satisfaction, businesses all over the world have been able to meet their objectives.

More importantly, the trend has also enabled organizations to constantly improve processes, systems and products in a manner that favors the customer and this has helped businesses to establish good relationships with their consumers. Quality management systems have constantly succeeded in sparing business organizations from making deadly mistakes, through reasonable planning and effective utilization of time and resources. All these initiatives do play a significant role in attracting and retaining customers in business.

From a close analysis of literature review on some of the most successful organizations in the world, there is a theory and practice behind the path taken by high-performance business institutions. From these observations, it has been discovered that effective business strategies and practices have applied all through.

From these findings, a model of performance which revolves around five main organizational characteristics has been developed. These include customer approach, strategic approach, leadership approach, values and beliefs, and processes and structure. In most cases, these characteristics have also acted as drivers of high-performance institutions.

Customer approach

This refers to the way an organization or institution would treat the consumer. High-performance institutions normally tend to have good and effective strategies of obtaining, treating, and retaining their customers in all terms. These organizations also apply all the necessary processes and facilities, to support and withhold the approach of their consumers.

Strategic approach

An institution’s consistent application of strategic approaches plays a significant role in the determination of its success and prosperity in business. High-performance organizations are associated with achievable visions that have been sustained with flexible strategic plans.

More importantly, they also follow well-articulated principles and philosophies that are certain to establish the standards defining the type of behavior which should be followed by everyone in the organization. These organizations are also defined by management and employee teams who possess a positive understanding of the company’s business philosophy and business plans towards its customers.

Leadership approach

This characteristic defines the strategies used by organizations in managing its workers in various segments, towards the achievement of established behaviors and goals. High-performance institutions would tend to be clear on the standards that workers should exhibit in the execution of important organizational strategies. In this case, organizational leaders such as executives and managers would establish goals matching the customers’ expectations and guide the other employees towards a focused directive in achieving those goals.

Values and beliefs

These are important in helping organizations achieve their business objectives. High-performance business institutions typically possess well established values that are well understood by all employees. This could be an organization’s code of conduct, which is consistent with their approach to leadership in business practices and accountability.

Processes and structure

This involves the procedures used by organizations in arranging their work policies and processes to execute desired business strategies. High-performance businesses are defined by strong processes that meet all the standards required to enable workers execute all opportunities in trying to meet customer expectations.

The entire process of quality management involves improvement of quality in both product and services, as well as in the channels or mediums used to deliver those requirements to consumers. Most of these strategies are prominently featured in the modern Total Quality Management approaches, such as ‘Six Sigma’ among other concepts.

For effective implementation of good quality management policies and standards, organizations should first of all understand all the consumer expectations as observed from the market and try to meet them accordingly, in a manner which ensures that both external and internal customers are fully satisfied.

Apart from effective leadership and management guidance, which is of great requirement here, people from all levels of an institution also do play a significant role in the implementation of the concept. Complete involvement of each individual within an institution is likely to facilitate huge benefits, through combined reasoning and effort. Through this approaches, Sony Corporation has managed to maintain its outstanding business stability in the global markets ahead of its competitors.

Sony is a corporate group based in Japan, whose primary focus in business is on electronics, entertainment, game and financial services. The group is made up of various sectors which include Sony Music Entertainment, Sony Computer Entertainment, Sony Pictures Entertainment, and Sony Financial Holdings among other subsidiaries.

Ever since the year 1945, when the company foundations were laid in Tokyo by Masaru Ibuka and Akio Morita, the company has over the years transformed into a leading manufacturer and assessor of many electronic products. Through the power of innovation, which has seen the company introduce many products and standards over the years, Sony has always maintained their reputation in the global arena, as a reliable innovative company of all times (Lee and Whang 296).

These achievements have continued to place Sony at the front-line, in the most competitive industry of electronics, where it competes with other big companies such as Panasonic, SANYO, LG and Phillips. However, among the factors that have continued to place Sony Corporation in a strong competitive advantage against its rivals is their effective quality management systems. The company has been promoting a constant, decisive effort in enhancing the quality of their products and in reinforcing its quality management framework.

Sony Corporation have recently reviewed and reconfigured their strong quality management system in all mechanisms and processes. This strategic approach would see the company come up with significant improvements in various areas, ranging from design and manufacturing, to sales and services. The intervention would also see the company come introduce strong guidelines that would guarantee for appropriate levels of quality which matches the current technological changes.

The company’s strong management systems are well defined by its organizational structure, which is made up of high qualified leadership posts and personnel. Changes directed to improvement of quality management systems in the company have impacted serious changes on the company’s management systems. This has seen the company make big changes in all its operational units to meet the new quality requirements.

For example, Quality officers have been appointed in each business unit to oversee and spearhead quality matters of products and services. Sony have also acquired certification under ISO 9001for all departments that deal with the manufacture of electronic products. More importantly, the company has religiously held quality strategic meetings involving top management, to discuss and make necessary suggestions regarding product quality.

The company has also formulated quality standards applicable to all their products and services, through effective criteria such as product performance and safety, as well as performance, services and labeling of products. As if this was not enough, Sony has also strengthened rules globally, since the year 2006, to enable customer report promptly to relevant departments in the company, incase they sense risk of danger from using the company products.

Apart from the management systems, the company has also made significant approaches in its technical side, to ensure that their customers continue enjoying the best products and services from the company. One way of achieving this goal is through the company’s establishment of customer information centers in many regions, to receive customers’ feedback on products. The company makes active use of the feedback from customers to modify its products and services, thus enhancing product and service quality.

There has been redesigning of products in the past few years to improve features and usability of parts, like in the case of video cameras and digital cameras recently.

Other key modifications have also been made on product user manuals, where technical language has been replaced with easy simpler language and guides that are understandable by all users. As another part of their constant effort to improve the quality of their products, the company also seeks suggestions and advice regarding the safety of products from external medical experts, before developing new product.

Currently, there are many ways and efforts apart the ones described above, through which Sony has responded to quality issues in all their operations, thus ensuring efficient customer satisfaction. Based on all these modifications on quality systems, the company has successfully made a big effort in the marketing of all its products to the international markets.

Six-Sigma is a hot management topic in the contemporary business world. Indeed, this is the next trend in the evolution of quality management. This simply refers to a measure of quality which services for near perfection, as it is applied by many organizations today. This system inherits from Total Quality Management and it applies much the same concepts. The approach is defined through two main characteristics that distinguish it from TQM and other aspects.

The two characteristics are; a focus towards the reduction of variation to very low levels and Six Sigma Black Belts, which involves experts in quality statistical process control and process improvement. Six-Sigma’s statistical representation describes the performance of a process through quantitative approaches. However, the fundamental goal of this methodology is to implement a measurement strategy which aims in the reduction of variation through effective application of Six Sigma improvement projects.

By using Six-Sigma methodology in their quality management strategies, Sony stands to face far-reaching benefits as well as challenges. For one, the company will come to realize full improvement of processes, services and products by constantly addressing and minimizing defects. Apart from attracting and retaining customers through quality, Six-Sigma also plays a significant role in streamlining operations within organizations (Klefsj and Wiklund 34).

More importantly, the methodology would enable the organization to sustain its competitive strength in the market, by utilizing their knowledge in project management and statistics. However, the challenges of successfully implementing the methodology are immense and are just what the Sony cannot escape, by implementing the concept in their quality management program. One of the major challenges with Six-Sigma is that, it is hard to manage owing to its complex procedures.

To ensure long-term sustainability of the concept, Sony will have to dedicate a lot of valuable time and attention to it and would have to utilize its concepts and tools constantly for positive outcomes in the long run. Additionally, Sony may not have full understanding of the concept, which requires integrated training and this may lead to failure of the company in its operations.

In conclusion, Six Sigma may be a significant initiative that could be used to improve the process of quality management. However, efforts should be made to integrate the concept with other existing concepts in the field, to make it more attractive to the many business organizations in the world that are yet to adopt its policies.

Evans, James, and Lindsay, William. The Management and Control of Quality , South Western: Thomson Publishing Company, 2008. Print.

Klefsj, Bengt and Wiklund, Hakan. “Six Sigma Seen as a Methodology for Total Quality Management.” Measuring Business Excellence 5.1 (2001): 31-35. Print.

Lee, Hau and Whang, Seungjin. “Higher Supply Chain Security with Lower Cost: Lessons from Total Quality Management.” International Journal of Production Economics 96. 3 (2005): 289-300. Print.

Moody, Daniel and Shanks, Graeme. “Improving the Quality of Data Models: Empirical Validation of a Quality Management Framework.” Information Systems 28. 6 (2003): 619-650. Print.

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Sony’s Operations Management: 10 Critical Decisions, Productivity

Sony’s operations in the consumer electronics, video game, entertainment, and financial services markets are guided through proactive productivity approaches in the 10 strategic decision areas of operations management (OM). These 10 strategic decisions pertain to the areas of concern to operations managers, with the aim of ensuring a streamlined business. This streamlining strengthens the competitive advantages noted in the SWOT analysis of Sony . The company’s operations management is based on time-tested approaches that support high efficiency in these business areas. As a major player in the global market, Sony maintains high productivity and performance with flexible operations management practices in these 10 strategic decision areas.

For the 10 decisions of operations management, Sony focuses on high efficiency, while integrating sustainability principles. These sustainability principles are central to Sony’s strategic organizational improvement. Successful operations management improves Sony’s performance relative to the market performance of consumer electronics, video games, and entertainment products of competitors, like Apple , Google (Alphabet) , Samsung, Microsoft , and Nintendo, as well as Disney and Netflix . These companies create the strong competitive pressure described in the Five Forces analysis of Sony .

Sony’s Operations Management, 10 Critical Decision Areas

1. Design of Goods and Services . Sony designs its products for maximum business benefit. In this strategic decision area, operations managers aim to minimize cost, maximize quality, support operational sustainability, and optimize human resource utilization. Sony addresses these considerations through continuous improvement methods. These methods are intended to optimize all operations in terms of productivity and process efficiency. In addition, Sony’s generic competitive strategy of differentiation is applied through operations management approaches that emphasize optimal profitability alongside sustainability principles in product design. For example, the company’s iteration of PlayStation designs aims to capitalize on the production efficiency and market success of previous designs. In this regard, Sony adequately addresses the objectives in this strategic decision area of operations management.

2. Quality Management . Operations managers focus on quality standards and requirements as objectives in this strategic decision area. Sony’s operations management policy emphasizes the achievement of and support for kando , which is “emotional involvement” or the “power to stimulate emotional response.” Kando is a key factor highlighted in Sony’s mission statement and vision statement . This factor ensures products that capture customers’ attention and satisfy their expectations. For example, operations management efforts constantly search for solutions to enhance the quality of Sony’s products. These efforts support high operational productivity and the fulfillment of kando pertinent to this strategic decision in operations management.

3. Process and Capacity Design . Adequacy of production processes, related standards, and resource allocation is the objective in this strategic decision area of operations management. Sony addresses this objective through sustainability, which also helps streamline the business to satisfy market concerns regarding the environmental impact of business operations. For example, the sustainability of the company’s production processes helps minimize operational costs based on the minimization of resource requirements and production waste. In addition, Sony’s operations managers apply strategic decisions to maximize capacity utilization in production facilities, thereby leading to the maximization of productivity per facility.

4. Location Strategy . At Sony, operations management is concerned with distances from customers, suppliers, and resources. The objective in this strategic decision area is to optimize such distances to minimize operational costs, maximize revenues, and optimize market reach. In this regard, Sony’s marketing mix (4Ps) involves stores in high-traffic locations, such as malls and urban centers. This part of the marketing mix helps optimize the productivity of the company’s distribution and sales operations. Also, Sony’s e-commerce websites add to the effectiveness of the location strategy. For example, these websites inform customers about goods and services available at Sony Stores. Moreover, the company’s operations managers keep facilities productive through optimal location relative to the labor market and suppliers. Thus, for this strategic decision area of operations management, Sony minimizes overall average distances among facilities, resources, and markets to optimize business operations.

5. Layout Design and Strategy . The objective in this strategic decision area is to optimize the flow of resources, such as human resources, materials, and information. For this purpose, Sony’s operations managers monitor requirements for operational capacity, resources, and inventory. The highly productive flow of resources is achieved through an annual review of layout designs and strategies. For example, Sony’s operations management employs expert opinion and employee feedback to make decisions on current productivity issues linked to layout designs and strategies.

6. Job Design and Human Resources . The company’s objective in this strategic decision area is to develop adequate and high-performance human resources to support business operations and growth. Operations managers use Sony’s organizational structure (company structure) to facilitate HR development. For example, the corporate structure defines job designs that are specific to the business areas of the company, such as the consumer electronics business and the gaming business. On the other hand, Sony’s organizational culture (company culture) promotes high productivity and operational efficiency. For instance, the corporate culture’s emphasis on reliability requires job designs and HR programs that continually develop employees’ knowledge and skills. Comprehensive support for this organizational culture is included in Sony’s operations management for this strategic decision area.

7. Supply Chain Management . In this strategic decision area, operations managers’ objective is to maintain adequate supply to support current operations and business growth, especially in high-growth markets, with consideration for the market trends noted in the PESTEL/PESTLE analysis of Sony . The company fulfills this objective through automation and inclusive support for suppliers. Automation maximizes the productivity of Sony’s supply chain management activities. On the other hand, inclusive support for suppliers ensures suppliers’ growth and operational adequacy along with the company’s growth. For example, as suppliers grow with strategic support from Sony, their productive capacity continues to match the company’s growing supply needs. These efforts show that Sony reaches out beyond its organization to fulfill the objectives in this strategic decision area of operations management.

8. Inventory Management . Operations managers make strategic decisions on inventory ordering and holding to support operations while considering supplier capacity and customer satisfaction objectives. Sony’s approach involves centralized inventory management systems that enable management personnel to determine and update data on inventory levels and associated operational requirements. For example, as part of the company’s operations management standards, inventory managers must regularly check and update data pertaining to their respective facilities or areas of operations. Through such an approach in this strategic decision area of operations management, the resulting real-time data optimizes inventory and associated productivity variables at Sony.

9. Scheduling . The managerial objective in this strategic decision area is to maintain operation schedules that match resources and market demand. Sony’s operations managers use automated scheduling to achieve high productivity. For example, the company’s management systems provide real-time data on changes in operational needs. Sony’s managers use such data to apply appropriate changes in schedules. This factor supports optimally productive business processes. Sony also addresses issues on market variations through partial autonomy of some business activities. For instance, some of the strategic decisions in this area of operations management are made at the local or regional level, and others at the corporate level. Such partial decentralization of operational decision-making helps Sony achieve some degree of flexibility in responding to market variations.

10. Maintenance . Organizational reliability and operational stability are the objectives in this strategic decision area of operations management. Sony attains reliability in combination with sustainability. Sustainability is a core factor in efforts to improve the business, such as through Sony’s corporate social responsibility (CSR) and ESG strategy and stakeholder management . Sustainability initiatives contribute to the reliability of the firm’s operations and productivity. For example, such initiatives require maximizing efficiency, such as waste minimization. The resulting efficiency makes Sony reliable in terms of productive capacity. Furthermore, the company’s operations managers ensure stability through regular maintenance evaluation of resources, such as technologies and human resources. Corresponding changes are applied to Sony’s operations management activities in this strategic decision area.

Productivity at Sony

Sony uses different sets of criteria or metrics for productivity in its business areas. These sets are based on the needs of the consumer electronics, gaming, entertainment, and financial services businesses. The following are some of the metrics applicable to evaluating productivity in Sony’s operations management:

• Accounts processed per day (financial services productivity)
• Units sold per day (Sony Store productivity)
• Batches of materials processed per day (inventory management productivity)
• Fosso Wamba, S., Queiroz, M. M., Ngai, E. W., Riggins, F., & Bendavid, Y. (2024). The interplay between artificial intelligence, production systems, and operations management resilience. International Journal of Production Research, 62 (15), 5361-5366.
• Sony Group Corporation – Businesses & Products .
• Sony Group Corporation – Form 20-F .
• Sony Group Corporation – History .
• Zhang, X., Denicol, J., Chan, P. W., & Le, Y. (2024). Designing the transition to operations in large inter‐organizational projects: Strategy, structure, process, and people. Journal of Operations Management, 70 (1), 107-136.
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• Educators, Researchers, and Students: You are permitted to quote or paraphrase parts of this article (not the entire article) for educational or research purposes, as long as the article is properly cited and referenced together with its URL/link.

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Sony (UK) Limited manufactures colour television (CTV) sets for consumer and business markets worldwide. The company employs over 1,500 staff and achieves turnover in excess of £200 million per annum.

‘Sony (UK) Limited, Bridgend, operate a documented, understood and maintained strategy of Total Quality control consistent with a policy objective of zero defects based on prevention rather than inspection, and the use of upstream action in problem solving.’

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Digital editions.

Total quality management: three case studies from around the world

With organisations to run and big orders to fill, it’s easy to see how some ceos inadvertently sacrifice quality for quantity. by integrating a system of total quality management it’s possible to have both.

Top 5 ways to manage the board during turbulent times Top 5 ways to create a family-friendly work culture Top 5 tips for a successful joint venture Top 5 ways managers can support ethnic minority workers Top 5 ways to encourage gender diversity in the workplace  Top 5 ways CEOs can create an ethical company culture Top 5 tips for going into business with your spouse Top 5 ways to promote a healthy workforce Top 5 ways to survive a recession Top 5 tips for avoiding the ‘conference vortex’ Top 5 ways to maximise new parents’ work-life balance with technology Top 5 ways to build psychological safety in the workplace Top 5 ways to prepare your workforce for the AI revolution Top 5 ways to tackle innovation stress in the workplace Top 5 tips for recruiting Millennials

There are few boardrooms in the world whose inhabitants don’t salivate at the thought of engaging in a little aggressive expansion. After all, there’s little room in a contemporary, fast-paced business environment for any firm whose leaders don’t subscribe to ambitions of bigger factories, healthier accounts and stronger turnarounds. Yet too often such tales of excess go hand-in-hand with complaints of a severe drop in quality.

Food and entertainment markets are riddled with cautionary tales, but service sectors such as health and education aren’t immune to the disappointing by-products of unsustainable growth either. As always, the first steps in avoiding a catastrophic forsaking of quality begins with good management.

There are plenty of methods and models geared at managing the quality of a particular company’s goods or services. Yet very few of those models take into consideration the widely held belief that any company is only as strong as its weakest link. With that in mind, management consultant William Deming developed an entirely new set of methods with which to address quality.

Deming, whose managerial work revolutionised the titanic Japanese manufacturing industry, perceived quality management to be more of a philosophy than anything else. Top-to-bottom improvement, he reckoned, required uninterrupted participation of all key employees and stakeholders. Thus, the total quality management (TQM) approach was born.

All in Similar to the Six Sigma improvement process, TQM ensures long-term success by enforcing all-encompassing internal guidelines and process standards to reduce errors. By way of serious, in-depth auditing – as well as some well-orchestrated soul-searching – TQM ensures firms meet stakeholder needs and expectations efficiently and effectively, without forsaking ethical values.

By opting to reframe the way employees think about the company’s goals and processes, TQM allows CEOs to make sure certain things are done right from day one. According to Teresa Whitacre, of international consulting firm ASQ , proper quality management also boosts a company’s profitability.

“Total quality management allows the company to look at their management system as a whole entity — not just an output of the quality department,” she says. “Total quality means the organisation looks at all inputs, human resources, engineering, production, service, distribution, sales, finance, all functions, and their impact on the quality of all products or services of the organisation. TQM can improve a company’s processes and bottom line.”

Embracing the entire process sees companies strive to improve in several core areas, including: customer focus, total employee involvement, process-centred thinking, systematic approaches, good communication and leadership and integrated systems. Yet Whitacre is quick to point out that companies stand to gain very little from TQM unless they’re willing to go all-in.

“Companies need to consider the inputs of each department and determine which inputs relate to its governance system. Then, the company needs to look at the same inputs and determine if those inputs are yielding the desired results,” she says. “For example, ISO 9001 requires management reviews occur at least annually. Aside from minimum standard requirements, the company is free to review what they feel is best for them. While implementing TQM, they can add to their management review the most critical metrics for their business, such as customer complaints, returns, cost of products, and more.”

The customer knows best: AtlantiCare TQM isn’t an easy management strategy to introduce into a business; in fact, many attempts tend to fall flat. More often than not, it’s because firms maintain natural barriers to full involvement. Middle managers, for example, tend to complain their authority is being challenged when boots on the ground are encouraged to speak up in the early stages of TQM. Yet in a culture of constant quality enhancement, the views of any given workforce are invaluable.

AtlantiCare in numbers

5,000 Employees

$280m Profits before quality improvement strategy was implemented

$650m Profits after quality improvement strategy

One firm that’s proven the merit of TQM is New Jersey-based healthcare provider AtlantiCare . Managing 5,000 employees at 25 locations, AtlantiCare is a serious business that’s boasted a respectable turnaround for nearly two decades. Yet in order to increase that margin further still, managers wanted to implement improvements across the board. Because patient satisfaction is the single-most important aspect of the healthcare industry, engaging in a renewed campaign of TQM proved a natural fit. The firm chose to adopt a ‘plan-do-check-act’ cycle, revealing gaps in staff communication – which subsequently meant longer patient waiting times and more complaints. To tackle this, managers explored a sideways method of internal communications. Instead of information trickling down from top-to-bottom, all of the company’s employees were given freedom to provide vital feedback at each and every level.

AtlantiCare decided to ensure all new employees understood this quality culture from the onset. At orientation, staff now receive a crash course in the company’s performance excellence framework – a management system that organises the firm’s processes into five key areas: quality, customer service, people and workplace, growth and financial performance. As employees rise through the ranks, this emphasis on improvement follows, so managers can operate within the company’s tight-loose-tight process management style.

After creating benchmark goals for employees to achieve at all levels – including better engagement at the point of delivery, increasing clinical communication and identifying and prioritising service opportunities – AtlantiCare was able to thrive. The number of repeat customers at the firm tripled, and its market share hit a six-year high. Profits unsurprisingly followed. The firm’s revenues shot up from $280m to $650m after implementing the quality improvement strategies, and the number of patients being serviced dwarfed state numbers.

Hitting the right notes: Santa Cruz Guitar Co For companies further removed from the long-term satisfaction of customers, it’s easier to let quality control slide. Yet there are plenty of ways in which growing manufacturers can pursue both quality and sales volumes simultaneously. Artisan instrument makers the Santa Cruz Guitar Co (SCGC) prove a salient example. Although the California-based company is still a small-scale manufacturing operation, SCGC has grown in recent years from a basement operation to a serious business.

SCGC in numbers

14 Craftsmen employed by SCGC

800 Custom guitars produced each year

Owner Dan Roberts now employs 14 expert craftsmen, who create over 800 custom guitars each year. In order to ensure the continued quality of his instruments, Roberts has created an environment that improves with each sale. To keep things efficient (as TQM must), the shop floor is divided into six workstations in which guitars are partially assembled and then moved to the next station. Each bench is manned by a senior craftsman, and no guitar leaves that builder’s station until he is 100 percent happy with its quality. This product quality is akin to a traditional assembly line; however, unlike a traditional, top-to-bottom factory, Roberts is intimately involved in all phases of instrument construction.

Utilising this doting method of quality management, it’s difficult to see how customers wouldn’t be satisfied with the artists’ work. Yet even if there were issues, Roberts and other senior management also spend much of their days personally answering web queries about the instruments. According to the managers, customers tend to be pleasantly surprised to find the company’s senior leaders are the ones answering their technical questions and concerns. While Roberts has no intentions of taking his manufacturing company to industrial heights, the quality of his instruments and high levels of customer satisfaction speak for themselves; the company currently boasts one lengthy backlog of orders.

A quality education: Ramaiah Institute of Management Studies Although it may appear easier to find success with TQM at a boutique-sized endeavour, the philosophy’s principles hold true in virtually every sector. Educational institutions, for example, have utilised quality management in much the same way – albeit to tackle decidedly different problems.

The global financial crisis hit higher education harder than many might have expected, and nowhere have the odds stacked higher than in India. The nation plays home to one of the world’s fastest-growing markets for business education. Yet over recent years, the relevance of business education in India has come into question. A report by one recruiter recently asserted just one in four Indian MBAs were adequately prepared for the business world.

RIMS in numbers

9% Increase in test scores post total quality management strategy

22% Increase in number of recruiters hiring from the school

20,000 Increase in the salary offered to graduates

50,000 Rise in placement revenue

At the Ramaiah Institute of Management Studies (RIMS) in Bangalore, recruiters and accreditation bodies specifically called into question the quality of students’ educations. Although the relatively small school has always struggled to compete with India’s renowned Xavier Labour Research Institute, the faculty finally began to notice clear hindrances in the success of graduates. The RIMS board decided it was time for a serious reassessment of quality management.

The school nominated Chief Academic Advisor Dr Krishnamurthy to head a volunteer team that would audit, analyse and implement process changes that would improve quality throughout (all in a particularly academic fashion). The team was tasked with looking at three key dimensions: assurance of learning, research and productivity, and quality of placements. Each member underwent extensive training to learn about action plans, quality auditing skills and continuous improvement tools – such as the ‘plan-do-study-act’ cycle.

Once faculty members were trained, the team’s first task was to identify the school’s key stakeholders, processes and their importance at the institute. Unsurprisingly, the most vital processes were identified as student intake, research, knowledge dissemination, outcomes evaluation and recruiter acceptance. From there, Krishnamurthy’s team used a fishbone diagram to help identify potential root causes of the issues plaguing these vital processes. To illustrate just how bad things were at the school, the team selected control groups and administered domain-based knowledge tests.

The deficits were disappointing. A RIMS students’ knowledge base was rated at just 36 percent, while students at Harvard rated 95 percent. Likewise, students’ critical thinking abilities rated nine percent, versus 93 percent at MIT. Worse yet, the mean salaries of graduating students averaged $36,000, versus $150,000 for students from Kellogg. Krishnamurthy’s team had their work cut out.

To tackle these issues, Krishnamurthy created an employability team, developed strategic architecture and designed pilot studies to improve the school’s curriculum and make it more competitive. In order to do so, he needed absolutely every employee and student on board – and there was some resistance at the onset. Yet the educator asserted it didn’t actually take long to convince the school’s stakeholders the changes were extremely beneficial.

“Once students started seeing the results, buy-in became complete and unconditional,” he says. Acceptance was also achieved by maintaining clearer levels of communication with stakeholders. The school actually started to provide shareholders with detailed plans and projections. Then, it proceeded with a variety of new methods, such as incorporating case studies into the curriculum, which increased general test scores by almost 10 percent. Administrators also introduced a mandate saying students must be certified in English by the British Council – increasing scores from 42 percent to 51 percent.

By improving those test scores, the perceived quality of RIMS skyrocketed. The number of top 100 businesses recruiting from the school shot up by 22 percent, while the average salary offers graduates were receiving increased by $20,000. Placement revenue rose by an impressive $50,000, and RIMS has since skyrocketed up domestic and international education tables.

No matter the business, total quality management can and will work. Yet this philosophical take on quality control will only impact firms that are in it for the long haul. Every employee must be in tune with the company’s ideologies and desires to improve, and customer satisfaction must reign supreme.

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Case Study - Sony

Sony Corporation is a leading manufacturer of audio, video, imaging, game, communications, key device and information technology products for the consumer and professional markets. Keiko Shiga from Sony’s Quality & Environmental Department tells us more about Sony's science-based targets here.

With Sony's music, pictures, computer entertainment and online businesses, it is uniquely positioned to be the leading electronics and entertainment company in the world. Sony recorded consolidated annual sales of approximately $72 billion for the fiscal year ended March 31, 2016. We spoke to Keiko Shiga from Sony’s Quality & Environmental Department about the company’s science based targets.

Why did you decide to set a science-based target?

We didn’t actually set out to set a science-based target in response to a call from the Initiative. We already had “Road to Zero”, our global environmental plan for achieving a zero environmental footprint by 2050, which we announced in 2010, and we were working towards this. We knew our “Green Management” mid-term targets had to be ambitious in order to put us on track to achieve the radical reduction in emissions necessary by the middle of the century.

We are part of WWF’s Climate Savers Program and we were speaking to them about our targets for 2020 and they said: ‘these look science-based.’ We didn’t realize this but agreed to submit the targets for a quality check and they were approved! We successfully hit our 2015 targets for climate change, and are now on track to delivering more reductions.

We believe it is essential to act on climate change and to do so quickly. It is central to our identity as a company that seeks to make a connection with people. Our customers don’t just look for functional value but deeper and more elusive emotional value. In Japanese culture, we call this ‘kando’. Being environmentally aware and responsible is one of the most important ways to achieve this.

What was the process for setting and implementing the ambitious targets?

The basic foundation of the Green Management mid-term targets was developed by the Quality & Environmental Department, involving business groups and relevant divisions in the discussions as needed. We also talked with some stakeholders about their expectations for Sony and benchmarked what other advanced companies are doing for environmental initiatives. Then we took it to the Group Executive Committee at one of their monthly meetings.

The CEO was instrumental in getting other executives on board. For him, it was central to what Sony is and does.

Without his backing it would have been harder to get other leaders on board.

Across the company, people are behind the targets and agree with the idea that we have to radically reduce our emissions. We provide e-Learning on Green Management mid-term targets to keep awareness and momentum high. Of course, in the shorter-term the specific targets and reductions require negotiation and explanation.

What changed as a result of having an official quality checked science-based target?

In some ways not much changed. We were already working towards the Road to Zero, and so the internal processes were in place to deliver this. However, having targets approved by a global initiative, as being science-based and in line with the level of ambition necessary to prevent dangerous climate change gave us more confidence and greater authority. This was particularly important in the context of COP 21 and the Paris Agreement, which saw an increase in awareness around the need to act.

What benefits do you anticipate or have you already reaped from having a science-based target?

This is something our customers want. It is important for our brand value. We need to fulfill our mission to provide the products customers want. And because these products are more energy efficient we are also helping to reduce global emissions, so it’s a win-win.

It puts us in a good position vis-à-vis our competitors, and also regulators. It means we meet and try to surpass what stakeholders expect of us, keep offering the best to our customers, and in doing so, get ahead of what other companies are doing. We also save money, because of energy efficiency.

Having a science-based target helps keep us on track. It means we know what we need to do in the short and medium term to meet the longer-term vision. And it also helps convince people internally that we are doing this in a logical manner. By being part of the global initiative we know we are part of a bigger movement, and that if we all work together we can deliver the reductions necessary.

Did you encounter any challenges?

Sony’s long-term vision implies a radically new way of doing business. Achieving this vision will demand changes beyond the company’s control and require collaboration with key stakeholders, including shareholders, employees, consumers, suppliers, governments and civil society.For example, we have targets for our supplying partners to meet, which is a challenge. We will have to work with them to convey the importance of reducing emissions in the supply chain. We cannot do this alone and building partnership will be key to get others to act.

Another challenge is that customers want bigger products in categories like TVs, with more vibrant displays, but they also want energy efficiency and lower emissions.

We have to try hard to deliver both. We also have to work out ways to ensure that our emissions keep going down even as the number of products our factories produce goes up.

We have absolute rather than intensity targets, so we have to cut emissions even when we grow. We will have to continue to innovate and work very hard to hit targets but I am confident we will do it – as we always have in the past.

Can you give some examples of innovations that have occurred as a result of the targets?

We have developed new LED displays for our TVs, which are more energy efficient, without compromising on picture quality. For example, the smart screens in the 4K BRAVIA™ TV X85B series adjust LED backlight brightness frame by frame to avoid wasting energy, and use 20% less energy than previous models (compared to X85A series in standard viewing mode).

We have also developed our own recycled plastic, SORPLAS, which is made from up to 99% recycled material and saves up to 80% CO2 emissions during manufacturing. This is used in many of our products and we are now also selling this outside the Sony Group.

Our environmental targets apply to all Sony companies – not just electronics, but also entertainment companies such as music and motion picture businesses. These divisions have the same emission reduction targets for operation, but they also have their own specific target – to “raise awareness and inspire action on sustainability from over 500 million people through entertainment”. For example, the main character from our film Angry Birds has become a UN Ambassador for the International Day of Happiness and is part of a campaign for greater sustainability. The idea is if the earth is happy then Angry Bird is happy. These sorts of creative innovations might not directly drive down emissions but they are really important to drive engagement, which is essential for action at the scale required.

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Sony used to be synonymous with "innovation" and "cool products". The case reveals how the company lost its edge and describes the leadership initiatives to restore its former glory. In 2012, Kazuo (Kaz) Hirai becomes CEO and successfully transforms Sony, including a relentless focus on differentiation through "wow" products instead of chasing scale. How should he organize and manage the company's response to digital opportunities, such as virtual reality, that could affect the company's entire value chain?

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