Corporate Strategy Essays

1300 Words Jun 26th, 2015 6 Pages
Q1. How did Sony become a diversified company? What was the rational for entering the entertainment sector? Was it a good choice?
Sony first ventured into diversification in 1961 when it created Sony Enterprise Co. in order to manage the Sony building in Ginza. Gradually, Sony moved into the space of retailing, took interest in a French restaurant named Maxim’s, ventured into Sony Travel Service and also became an importer to sports equipment and luxury goods.
Over a period 50 years, the company either acquired or started new subsidiaries, most of which are shown below: Year | Company (created or allied with) | Industry | 1963 | Joint Venture (JV) with CBS bought out by Sony | Entertainment | 1965 | JV with Tektronix | Measuring
…show more content…
This could be on account of investments made by the company to strengthen this particular segment, in keeping with the corporate strategy where this was mentioned as a key area of focus.
Sony’s collaboration with Samsung, on the market leaders in the television industry, seems to have paid off. Despite a decline of -22.5% in sales, the segment report a 58.5% improvement in operating income. This is most likely on account of an improved operational efficiency, even though it might be technically wrong to view this as a growth, since operating income is still negative, the reduction in deficit from -203.2 Billion Yen to -84.3 Billion Yen is quite commendable.

The contribution of the core business of Sony towards it sales have already increased from 33.8% to 40.1%. This shows that there is growth. But its difficult to gauge if they would be able to meet there target of 70% by 2014.
Additionally, Sony will need to focus on segments which are not performing well. Game and Imaging are reason for concern here. The Pictures segment of Sony is

Related Documents