Sony's TV Business Keeps Fading to Red
Reviewer: CharlesNewman, PhD
Abstract
Two months ago, Sony optimistically predicted it would sell 27 million TV sets this year; on July 28, it slashed the figure to 22 million and issued a profit warning. The television business, Sony's biggest revenue generator, is forecast to lose a billion dollars this year-following seven straight years of red ink. (PHG )Royal Philips Electronics and several other longtime rivals have called it quits, saying they can't compete as prices tumble into commodity territory. But Sony Chief Executive Officer Howard Stringer considers the TV unit vital to helping sell products that work with the company's sets, including Blu-ray players and its popular PlayStation game consoles.
On Aug. 1, Sony said it would not divest its TV business and the next day announced that a reorganization of the unit is in the works. There's little fat left to cut. Stringer already has eliminated 30,000 jobs, entered into joint manufacturing ventures with rivals and shed assets.
Sony's widescreen woes aren't unique. Most major manufacturers are sitting on six- to 10-weeks' inventory as consumers show scant interest in the latest features such as sets with Internet connectivity or those that can show movies in 3D, says (IHS) IHS iSuppli analyst Riddhi Patel. Not helping matters is the slew of smaller-screen devices such as iPads and iPhones that are competing for consumers' disposable income.
Discussion Questions
1. Discuss the structural characteristics of the television manufacturing industry using the Five Competitive Forces (Porter)framework.https://www.mindtools.com/pages/article/newSTR_82.htm
To help you answer this question here is a link to further information TV-Manufacturing- Wars-March2010. Feel free to find and cite other information sources as well.
2. Discuss the Sony strategy using the Resource-Based View of the Firm framework.
https://www.strategicmanagementinsight.com/topics/resource-based-view.html
3. 3. Discuss the Sony strategy using the Competitive Advantage (Porter) framework.
https://www.mindtools.com/pages/article/newSTR_82.htm