Howard Stringer

1
Howard Stringer

• June 22, 2005 Stringer appointed Chairman and
  CEO of Sony Corporation
• Prior achievements
• Distingushed himself as a producer and executive
  at CBS
• Leadership prompted immediate turnaround at CBS
• Brought David Lettermans Late Night show to CBS
• Developed award-winning program 48 Hours
• Developed CBS Evening News with Dan Rather

2
Howard Stringer

• Numerous Awards
• 31 Emmys, 3 Overseas Press Club Awards, an ABA
  Silver Gavel
• Contributions to Sony
• Wealth of leadership knowledge and experience
• Western views and managerial styles

3
Corporate Performance

• Sony Shock of 2003
• Sony reports operating losses for the 2nd
  straight year
• Competition pummels prices for key products
• Poor performance in TV and Walkman product lines
• Inability to compete against competitors such as
  Apples iPod or Tivo digital recorder

4
Corporate Performance

• Silo Culture
• Extremely high competition between departments
• Very decentralized managerial structure
• Restructuring under Howard Stringer
• Managerial shakeup
• Cutting as many 10,000 jobs
• Centralize decision-making within the company

5
Corporate Culture

• Sony is committed to policy of openness, high
  ethical standards
• Sony Group Code of Conduct
• Internal Hotline
• Crisis Management Plans
• July 2001 creation of Compliance Office
• Uphold compliance activities across the
  organization

6
Sony Code of Conduct

• Adopted in May 2003
• Reinforces compliance systems and strengthens
  corporate government and business ehtics
  throughout Sony Group
• Sets internal standards
• Outlines policies concerning ethical business
  practices
• Education and training programs

7
Corporate Governance

• June 2003 Sony adopts Company with Committees
  system under the revised Japanese Commercial Code
• Enhances corporate governance by distinguishing
  supervisory functions from operational functions

8
Corporate Governance

• Sony Group required to establish three committees
  under the Board of Directors
• Nomination, Audit, Compensation
• Introduction of new internal standards
• Aimed at further differentiating oversight from
  business operation roles

9
Competitor Analysis Apple

• Late 1990s Digital Revolution
• Creation of iTunes
• Poor sales of portable music players
• 2001 Steve Jobs begins creation of iPod
• Apple iPod
• Released in October 2001
• Retailed for 399

10
What happened to SONY?

• Management was slow to react
• Poor performance of the Walkman product line CD
  players, MiniDisc players
• Lack of MP3 support
• Poor coordination PC Group vs. Walkman Group
• 2004 Sony Connect digital music download service
• Difficulties leveraging competencies in
  electronics and music

11
Competitor Analysis Microsoft

• 1995 Sony releases its first videogame console,
  the Sony Playstation
• Sold 80 million units worldwide
• Held 53 market share by 1999
• Oct. 2000 Sony releases PS2
• March 2000 Bill Gates announces Microsofts
  entry into the home videogame market.

12
Competitor Analysis Microsoft

• Videogame industry 20
• Nov. 2001 Microsofts Xbox
• Several Transferable Competencies
• Xbox based on PC architecture
• Online gaming infrastructre
• Veteran in hardware development
• Nov. 2005 Xbox 360
• Turning point?

13
Competitor Analysis Toshiba

• 24 Billion Home Video market
• FORMAT WAR
• Sonys Blu-Ray
• Toshibas HD-DVD
• 1st mover advantage Toshiba

14
Competitor Analysis Toshiba

• Price
• Toshibas HD-DVD players 499-799
• Sonys Blu-Ray DVD players 999
• Why 2 competing formats?
• Implications
• Retailers need to create shelf space for two
  different products
• Confusion amongst consumers

15
Competitor Analysis Toshiba

• Who will win?
• Ultimately, superior marketing will decide who
  wins
• Whats at stake for Sony?
• 24 billion Home Video market
• Sony Playstation 3, Vaio computers, Sony Picture
  movie discs