October 30, 2003
Is Sony Broken…? 20,000 Jobs Lost is One Indicator
Browsing around this morning, I noticed on the BBC Web site from a couple of days ago an article describing how Sony is being forced to partner with Plasma/LCD-TV competitor Samsung in order to try and recover in an important (and eminently profitable) market that Sony has found itself losing ground in. Likewise, DVD Recorder shipments have suffered at the hands of Matsushita’s Panasonic, who boosted profits 73% in the same quarter Sony’s profits dropped 25%. As a result, some 13% of Sony’s worldwide workforce will be cut over the next three years to try and restructure the company for a future less certain in its reliance on the quintessential consumer electronics brand.
Chief Executive Nobuyuki Idei said last month that Sony was "lacking a sense of urgency". Sony has perhaps gotten too comfortable and complacent – an all-too-familiar story seen countless times with once-high-flying market leaders – trying to sell more of what Sony innovates, rather than what their customers really want to buy. Certainly, Sony’s key challenger these days – Samsung – has such an urgency at work in its enterprise, impacting the marketplace to Sony’s detriment time and time again in multiple sectors – from cell phones to televisions. Other rivals have presented themselves – such as LG – that have overcome Sony’s previous brand image in so many markets – that is, when you choose Sony, you get the best-quality product money can buy. Lower cost competitors have risen to meet that quality bar and in the minds of Sony’s customers, their pricing power (and profitability) has been eroding ever since.
- Arik
Posted by Arik Johnson at October 30, 2003 02:47 PM | TrackBack
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