Conglomerate: Sony Corporation 1
Conglomerate: Sony Corporation
Tiffany Yang
San Jose State University
Conglomerate: Sony Corporation 2
Abstract
The research paper is about the Japanese conglomerate― Sony Corporation in terms of its history, growth, holdings, and ramifications of ownership. Sony Corporation is a world-wide corporation that ranges different businesses in different countries. The corporation started as an electronic company and became a conglomerate by jointing with other big companies, absorbing small/medium companies, and establishing its new companies. Because having a successful company value and strong strategies, the corporation is getting stronger; however, the achievement did not show on the numbers on the 2010 annual report. The revenue of 2010 has decreased compare to last year. Even though the numbers are not perfect, the Sony Corporation as a whole presents a strong public identity with little domination in a particular medium. On the other hand, Sony Corporation does not show intention of money, but the term of the Sony does:
A “Corporation” categorized as a “Conglomerate”— means it intends to make money by expanding its businesses to different industries.
Conglomerate: Sony Corporation 3
Table of content
I. Intro (General overview) 4
II. History 4
A. Timeline 5
B. Philosophy / Strategy 9
III. Holdings 12
A. Sony Corporation Subsidiaries 13
B. Headquarter 14
C. Structure 15
IV. Track record 16
A. Company Position & Competitors 16
B. The Buzz 20
V. Analysis 20
VI. Interpretation & Conclusion 21
Conglomerate: Sony Corporation 4
I. Intro (General overview)
The Sony Corporation is a Japanese conglomerate which represents a wide range of business engaged in entirely different businesses; it primarily focuses on electronics, game, movie, music, and financial services. For its local business in Japan, Sony Corporation has 167,900 people (as of March 31, 2010) in seven technology centers and two business offices; moreover, it also established different businesses overseas in several countries.
II. History
Sony Corporation was based on the corporation of two persons’ ideas and the ambitious to achieve the ideas. In late 1945, Sony Corporation started as a radio repair shop by Masaru
Ibuka. The next year, Akio Marita joined Masaru Ibuka and found a company because they had the same beliefs and believe that they could make their ideas into reality if they working together.
Originally, Sony Corporation was named ―Tokyo Tsushin Kogyo K.K. (Tokyo
Telecommunications Engineering Corporation), and the company did not change its name to
“Sony Corporation” until 1958. The name "Sony" was chosen for the brand as a mix of two words. One was the Latin word Sonus which is the root of "sonic" and "sound" and the other was
"sonny," a familiar term used in 1950s America to call a boy (“Sony Corporation history,”
(2010).
From that initial spark followed by decades of innovation, Ibuka’s and Marita’s ideas had transformed and implanted into people’s lives everywhere (“Sony Corporation history,” (2010).
Conglomerate: Sony Corporation 5
A. Timeline
Sony Corporation had successful performances in its local business. To grow out of its original business, it started to expand its businesses overseas after over two decades of local business, but it local businesses did not stop developing. During the 1950s and 1970s, Sony
Corporation was mainly focusing on electronic products and locally establishing technology centers. Starting in the 1990s, Sony started to have touches on the computer entertainment and communication network industries, and it started video companies and internet service provider corporation. After having touches on electronics, film, and internet, Sony started to be involved in financial, cell phone, music, and film industries in the 2000s. The following chart is a history list of what Sony Corporation has done regarding to its local expansion of the company: (“Sony
Corporation History”, 2010)
Local Expansion of Sony Corporation
Tokyo Tsushin Kogyo K.K. (Tokyo Telecommunications Engineering Corporation), 1946 also known as Totsuko, established in Nihonbashi, Tokyo, Japan. Sendai plant established in Tagajo, near Sendai, Miyagi Prefecture. 1954 (It was renamed Sendai Technology Center in April 1992). Totsuko listed on the OTC (over-the-counter) market of the Tokyo Stock Exchange 1955 (TSE). 1958 Company name changed to Sony Corporation Atsugi plant established in Atsugi, Kanagawa Prefecture 1960 (It was renamed Atsugi Technology Center in August 1989). Osaki plant established in Shinagawa, Tokyo 1964 (It was renamed Osaki West Technology Center in June 1995). 1966 Sony Building in Ginza, Tokyo, opened Shibaura plant established in Minato, Tokyo 1969 (renamed Shibaura Technology Center in August 1989) Conglomerate: Sony Corporation 6
Sony Shiroishi Semiconductor Inc. established to assemble semiconductor products (in Shiroishi, Miyagi Prefecture). Inazawa Plant (currently Inazawa Technology Center) established to produce cathode- ray tubes (in Inazawa, Aichi Prefecture). Ichinomiya Plant (currently Ichinomiya Technology Center) established to assemble 1970 color TVs (in Ichinomiya, Aichi Prefecture). Sony Koda Inc. (currently Koda Technology Center) established to manufacture home- 1972 video products (in Kota-cho, Aichi Prefecture). 1993 Sony Computer Entertainment Inc. established. 1995 Sony Communication Network Corporation established 1997 Sony Marketing Co., Ltd. Established Sony Bank established in Japan 2001 Sony EMCS established
Sony Ericsson Mobile Communications established FeliCa Networks, Inc. established Sony Computer Entertainment Inc. (SCE) becomes wholly owned subsidiary via 2004 exchange of shares Sony Financial Holdings Inc. established. Sony BMG Music Entertainment established Sony Communication Network Corporation delists as a subsidiary tracking stock. Sony Communication Network Corporation 2005 (It was renamed So-net Entertainment Corporation in Oct. 2006) listed on the Mothers Market of the Tokyo Stock Exchange. 2007 Sony Financial Holdings lists on the Tokyo Stock Exchange. 2008 So-net Entertainment lists on the first section of the Tokyo Stock Exchange. (“Sony Corporation history,” 2010)
Sony Corporation operated its local business for 24 years, and it established its first national expansion starting from the United States. Sony Corporation started to expand its ownership by not only jointing venture and absorbing other companies but also establishing its Conglomerate: Sony Corporation 7 own brand in different countries in different fields. In the 1960s, Sony expanded its business in
United States and European countries. At the same time, Sony started to be involved in the music industry by having joint venture with a music company. In the 1970s, Sony continued to expand its business around Europe and have touches on the insurance industry by jointing venture with an existed insurance company. In the 1980s, Sony wholly-owned the music production company and also expanded its business into the film industry. In recent years, Sony Corporation remains absorbing other companies by merger and cooperating with other companies to produce new products and services. The following chart is the main expansions of Sony Corporation throughout the world:
National Expansion of Sony Corporation
Corporation of America (SONAM) established in the United States 1960 Sony Overseas S.A. established near Zurich, Switzerland 1962 Sony Corporation of Hong Kong Ltd. established CBS /Sony Records Inc., a 50-50 joint venture with CBS Inc. of the US, established (Renamed CBS Sony Inc. in August 1973 and CBS/Sony Group Inc. in August 1983. It 1968 became a wholly-owned Sony subsidiary in January 1988, and renamed Sony Music
Entertainment Inc. in April 1991)
Sony (U.K.) Ltd. Established in the United Kingdom (Reorganized as Sony United Kingdom Ltd. In April 1993) Sony G.m.b.H. established in Cologne, Germany 1970 (Renamed Sony Deutschland G.m.b.H in June 1980) Sony shares listed on the New York Stock Exchange 1972 Operations commenced at color TV assembly plant in San Diego, California. Hispano Sony established in Barcelona, Spain. 1973 Sony France S.A. established in Paris, France Operations commenced at color TV assembly plant in Bridgend, Wales, in the U.K. 1974 Operations commenced at cathode ray tube (CRT) plant in San Diego, the first ever Conglomerate: Sony Corporation 8
integrated color TV production facility to be established by a Japanese company overseas. Sony Prudential Life Insurance Co. Ltd., a 50-50 joint venture with Prudential Insurance
Co. of America, established.
(Renamed Sony Pruco Life Insurance Co. Ltd. in September 1987 and Sony Life 1979 Insurance Co. Ltd. in April 1991) Sony Europe G.m.b.H. established in Cologne, Germany. 1986 Operations commenced at Sony France audio and video products assembly and device plant in Colmar, Alsace, France. CBS Records Inc., the records group of CBS, acquired 1988 (Renamed Sony Music Entertainment Inc. in January 1991) Columbia Pictures Entertainment, Inc. acquired. 1989 (Renamed Sony Pictures Entertainment Inc. in August 1991) 1996 Sony China established 2000 Sony Center am Potsdamer Platz Berlin opened 2002 Sony absorbs AIWA by merger Sony and Samsung reach agreement on manufacturing 8th generation amorphous TFT 2006 LCD panels at their joint venture, S-LCD Corporation. 2008 Sony BMG becomes wholly owned subsidiary of Sony Corporation of America (“Sony Corporation history,” 2010)
Although the list which is provided on the Sony Corporation’s website only showed until
2008 and only showed the main extension in larger cities, the Corporation is remaining to improve and introduce new technology to the public until today (“Sony Corporation History”,
2010).
Having different businesses in different counties, Sony Corporation had this consolidation built by having strategies behind it. In one of the Sony’s shareholders’ meeting in
2009, there are four strategic priorities states that “one, consistent profitability in core hardware business; second, innovative hardware, software, and services; third, new customers and new Conglomerate: Sony Corporation 9 geographies; forth, environmentally conscious products and process” (“Media/Investor conference,” 2009). Digital imaging, television, and game have been the main and consistent profitable products of the company, so the corporation is going to continue its excellent performance and services. However, keeping up its good work is not enough because having new evolution is the way to move the corporation forward. While maintaining good performance of the products, the corporation tries to innovate by adding newer supplement to the products and creating new products. Sony does not stop developing and creating newer hardware, software, and but also improving services toward customers. Sony considers customers as its center of innovation and tries to expend new market and new geographies since customers are people who buy the products. Sony Corporation wants all of its consumers to be satisfied with its products or services in order to make further sales. Sony tries to develop products based upon the user experience instead of the technology. Today, the Sony brand ranges from electronics, game, movie, music, to financial, and this establishment is all based on company philosophy, what the company value is.
B. Philosophy / Strategy
A company's philosophy is the main body of its culture or an ambience into its core values. Sony Corporation’s philosophy is that “give top priority to providing customer oriented, high-quality products and services as an operating foundation” (“Corporate social responsibility,”
2010). This philosophy was set forth in the Founding Prospectus drafted by Sony's co-founder,
Masaru Ibuka, in 1946, and it has being inherited since the start of the company’s operation.
Moreover, The Sony Group Code of Conduct, which was established in May 2003, requires
Sony Corporation to continuously discover ways to maintain or surpass in mandated standards in Conglomerate: Sony Corporation 10 all of its business activities to guarantee the safety and satisfaction of customers who use its products and/or services (“Sony Group Code of Conduct,” 2010).
To follow its philosophy and unite its communication
initiatives across all businesses, in 2009, Sony Corporation
announced a new group-wide brand message called “make-
dot-believe (make.believe) (“News release,” 2009). The
introduction of “make.believe” symbolizes Sony's spirit of
creativity and innovation which is similar to the co-founders’
belief― believe the beliefs and make them into reality.
"Believe" represents Sony's ideas and ideals ― the ability to think, imagine, and dream— while
"make" signifies the corporation’s unique ability to do, build, and design these ideas into reality.
The "dot" is where inspiration meets creativity, creativity meets reality, and symbolizes Sony's role in bringing imagination to reality (“Definition,” 2010).
“make.believe” is the brand massage from Sony Corporation to both the general public and the shareholders but in different meanings. For general public is to give positive impressions and attract people to purchase Sony products or use Sony services, and descriptions to the shareholders are often related to revenue, what the corporation’s performance is. Sony
Corporation presents positive brand message to the public to show their intention of believing ideas and making them come true. The corporation wants people to believe that it can make their beliefs come true. This positive impressions and experiences of the general public are important to the corporation. Positive images motivate people’s consideration of purchase into actively purchasing which brings revenue to the corporation and the shareholders. To shareholders, their main goal is to invest and have pay backs from their invested companies. Although investors can Conglomerate: Sony Corporation 11 be consumers as well, standing as investors’ perspective, they care more about what they can get from their investment. Shareholders hear about what the current development of the company is, what the problems that the company is facing, and how the company is going to solve the problems. Listening to the problems and opportunities, investors would have ideas about how their money has been spent and whether would invest more or not.
Sony Corporation has stocks programs in Japan and also overseas. Japan has two which are Tokyo Stock Exchange and Osaka Securities Exchange. Sony also has one in the United
States in New York Stock Exchange and one in United Kingdom in London Stock Exchange.
The shareholders who purchase stocks are often in different countries and different positions: foreign investors, financial institutions, individuals, corporations, and financial instruments firms.
Currently as of 2010, there are shareholder meetings for Sony Corporation to report annual performance, and the big shareholders are invited to the meeting. Currently, there are ten main shareholders of Sony Corporation.
Shareholders of Sony Corporation
% of share Rank Name holding 1 Moxley and Company (Depositary Bank for ADRs) 9.19 % 2 Japan Trustee Services Bank Ltd. (Trust account) 5.67 % 3 The Master Trust Bank of Japan, Ltd. (Trust account) 4.10 % 4 State Street Bank and Trust Company 2.06 % 5 HJPMorgan Chase Bank 380055 1.66 % 6 SSBT OD05 Omnibus China Treaty 808150 1.36 % 7 Japan Trustee Services Bank, Ltd. (Trust account 9) 1.32 % 8 State Street Bank and Trust Company 505225 1.08 % Mellon Bank, N.A. 9 0.97 % (as Agent for its Client Mellon Omnibus US Pension) Conglomerate: Sony Corporation 12
The Chase Manhattan Bank, N.A. 10 0.85 % (London Secs Leading Omnibus Account) (“Sony Corporation shareholders,” 2010).
To know about the corporation’s performance and changes in the financial position,
Annual reports are where to look for self-descriptions of a company. They are accessible descriptions for both general public and shareholders. It is an opportunity to publish the image of the company to the general public. Public can also get impressions based on the annual reports and make preference whether it is a good company. But it is mainly to report to the shareholders and help them to make economic decisions whether to buy or sell shares.
According to the annual report2010 of Sony Corporation, the revenue of Sony
Corporation has decreased, although Sony Corporation is a large corporation which owns or partially owns a large number of businesses. However, the corporation did not give up and encourage shareholders not to be disappointed by stating the problems and resolution in the future to solve the problems. Sony Corporation stated in the annual report2010 that it plans to generate growth with consistent profitability in its core businesses while aggressively developing new businesses. It sets its key objective to maintain and grow its business to a leading market position. To achieve this objective, they have innovative new product lined up and an aggressive sales plan with continuously revitalized cost structure. A specific example would be its announcement of the new compact interchangeable lens digital cameras, which are the world’s smallest and lightest of their kind (“Annual report,” 2010).
III. Holdings
Because of the solid corporation value what was established interiorly and the successful strategies how corporation presented externally, Sony Corporation becomes a conglomerate and has its business started from electronics, the original products of what Sony Corporation Conglomerate: Sony Corporation 13 produced, and later into game, movie, music, and financial industries. The following chart is a list of all Sony Corporation’s subsidiaries:
A. Sony Corporation Subsidiaries
Film Sony Pictures Entertainment Columbia TriStar Sony Pictures Classics Phoenix Pictures (partial) Jim Henson Productions (partial) Mandalay Entertainment (partial) Television Sony Pictures Television Cinemax Latin America Animax Japan SoapCity Game Show Network (50% with Liberty Media) Movielink (Jointly owned with Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros. Studios) Music Sony BMG Music Entertainment (50% with Bertelsmann) 21 Labels include: Arista Records, BNA Records, Burgundy Records, Columbia Nashville, Columbia Records, Epic Records, J Records, Jive Records, LaFace Records, Legacy Recordings, RCA Records, RCA Victor Group, RLG - Nashville, Sony Classical, Sony Music International, Sony Music Nashville, Sony Wonder, So So Def Records, Sony BMG Masterworks, Sony BMG US Latin, Verity Records Sony/ATV Music Publishing (Joint venture with Michael Jackson) Music Choice Conglomerate: Sony Corporation 14
(Venture with Time Warner, EMI, Motorola, Microsoft, and several cable companies: Cox, Comcast, Time Warner Cable) Sony Electronics Other Sony Computer Entertainment America Sony Corporation of America Sony DADC Americas Sony Plaza Public Arcade and Sony Wonder Technology Lab (NYC) Sony Ericsson Mobile Communications PlayStation Sony Connect Inc. Metreon Sony Signatures (clothing, accessories, apparel) Sony Financial Holdings, Inc. (65%) Psygnosis Limited (Video game developer) [email protected] (Online entertainment network) Jeopardy Online Wheel of Fortune Online (“Who owns what,” 2008)
B. Headquarter
Japan is where this successful conglomerate— Sony Corporation started. The
Corporation’s headquarter locates at one of the special wards called Minato-ku of Tokyo, Japan
(“Sony Corp. Info,” 2010). Moreover, most of the divisions are also in Japan located at Tokyo,
Kanagawa, and Miyagi. Although Sony Corporation’s headquarter and many divisions are in
Japan, its business and products are widely distributed worldwide― Asia, America, Canada,
Central/South America, Europe, Middle East/Africa, and Oceania (“Sony Corp, info,” 2010). In
Japan, there are 44 affiliated companies including electronic companies also a broad range of financial, insurance, and network companies. Besides local Japan companies, there are six Sony Conglomerate: Sony Corporation 15
Companies have global businesses throughout the world, and the businesses are related to entertainment and finance. More specifically, 20 companies in Asian focus on electronics. 36 companies in the United States mainly focus on electronics, communication, and finance. One company in Canada focuses on electronics. Five companies in Central/South America mainly focus on electronics. 17 companies in Europe focus on electronics, entertainment, and finance.
Two companies in Middle East/Africa and Oceania both focus on electronics (“Sony Corporation shareholders,” 2010).
C. Structure
Behind this big corporation with many businesses, Howard Stringer serves the same position as a chairman, a CEO, and a president currently. His position was successes by
Nobuyuki Idei who has no relationship with him. Idei agreed to step down and turn the company over to Stringer due to the losses at Sony Corporation during his tenure (Lieberman, 2005).
Before joining the Sony Corporation, Stringer had a 30-year career at CBS serving as a journalist, producer, and senior executive. He was in charge with all of the broadcast activities of CBS’ entertainment, news, sports, radio, and television stations. He was the president of CBS from
1988 to 1995, and later began to work at Sony in 1997 as the president of its United States’ businesses (Sony Corporation of America). The two year gap between changing job fields, he was being the CEO of TELE TV which was a media and technology company (Griffiths 2010).
With his experience primarily in the media industry, Stringer has been in the position to oversee the entire businesses of Sony Corporation until today since 2005, (Executive profile, 2010).
Conglomerate: Sony Corporation 16
IV. Track record
A. Company Position & Competitors
After Stringer started to oversee the performances of Sony Corporation, the Corporation has been improving but still lost some revenue compare to last year (2008). According to Annual report2010 which calculates its revenue from March of the previous year (2009) to March of this year (2010), The following chart is the highlight of the financial results for the fiscal year:
Financial highlight of Sony Corporation in 2010
Sony Sales and operating revenue ¥ 7,214.0 billion (-6.7%) Operating income ¥ 31.8 billion Income before income tax ¥ 26.9 billion Net loss attributable to Sony Corporation’s stockholders ¥ 40.8 billion (“Annual report,”2010).
The revenue is the total income of all of the companies which is under Sony Corporation, but Standard & Poor’s NetAdvantage, a database research of company information, puts Sony
Corporation in the consumer electronics industry since the consumer products and devices business accounts for most of its sales. The database also defines that Panasonic Corporation and
Garmin LTD. are the top two competitors when it comes to consumer products and devices
(“Standard & Poor’s,” 2010).
Comparison of Market Value in 2010
Company Name Market Value Total ($M) Earning Per Share Yield% Beta Sony Corporation 32,374.07 0.24 0.80 1.53 Panasonic Corporation 29,580.97 -0.04 0.60 0.86 Garmin LTD. 6,009.12 3.31 4.80 1.42 (“Standard & Poor’s,” 2010). Conglomerate: Sony Corporation 17
Although Panasonic Corporation’s latest revenue is not higher and even far from Sony
Corporation’s revenue, its market value is close with only two thousand of differences. In general, the greater the market value is, the greater the value of the company. This proves how much the company is worth without the investment from investors. Usually companies which have higher market value attract more possible investors and have higher likelihood of high returns for investors. In this case of Sony Corporation and Panasonic Corporation, Panasonic has a high chance to overtake Sony by its market value. There is a chance that Panasonic would attract more investors and have better development compare to Sony later in the future.
Financial highlight of Panasonic Corporation in 2010
Panasonic Net sales ¥ 7.4 million Operating profit ¥ 0.2 million Income before income taxes ¥ 39.3 thousand Net income (loss) attributable to Panasonic Corporation ¥ 0.2 million (“Standard & Poor’s,” 2010).
Garmin LTD. also do not have large amount of revenue from last year, but it has more value when it comes to earning per share and yield. Yield is the amount of holding in cash that returns to the owners of a security, and earning per share is the amount that each investors get. A higher yield allows the owners to earn more from their investment sooner and with less risk of loss. In this case of Sony Corporation and Garmin LTD., Garmin investors tend to have a higher chance to get higher repays. This is an attraction for the investors to put money into Garmin LTD instead of Sony Corporation, and this might lead to the result that Garmin has more money to put into its businesses and possible to overtake Sony.
Financial highlight of Garmin LTD. in 2010 Conglomerate: Sony Corporation 18
Garmin Net sales $ 2,9 million Operating income $ 0.78 million Income before income taxes $ 0.81 million Net income $ 0.7 million (“Standard & Poor’s,” 2010).
However, the completion and rating is completely different when it comes to the data from a non-profit organization called ChemSec, the International Chemical Secretariat. A working document states that the top eight leading consumer electronic brands are Acer Group,
Dell, HP, Intel Group, LG Electronic, Nokia, Philips, and Sony Group (“Statements of leading,”
2010). Although the brands which are listed have different focuses and selection of electronics,
Sony brand is ranked as one of the top eight brands out of several personal electronic brands.
Sony Corporation also plays an important role in the movie industry. Sony Picture
Entertainment which is part of Sony is one of the top five companies in the movie industry, and the top five companies include: 20th Century Fox (owned by News Corporation), Paramount
Pictures (owned by Viacom), Sony Picture (owned by Sony Corporation), Walt Disney Picture
(owned by Walt Disney), and Warner Bros. (owned by Time Warner). Although Sony Picture
Entertainment is highly recognized as one of the top movie companies, but when it comes to the market share of year 2010, Sony Picture did not do so well that only positioned in fifth place and the only company did not make one billion dollars out of its movie business.
Market Share for Each Distributor in 2010
Rank Distributor Movies 2010 Gross Tickets Share 1 Warner Bros. 28 $1,350,133,826 170,903,017 16.35% 2 Paramount Pictures 13 $1,266,810,796 160,355,796 15.34% 3 20th Century Fox 15 $1,161,641,652 147,043,248 14.06% Conglomerate: Sony Corporation 19
4 Walt Disney Picture 14 $1,129,803,000 143,013,037 13.68% 5 Sony Pictures 14 $760,221,289 96,230,543 9.20% (“US movie market,” 2010)
Sony Corporation also has touches on the game industry and is one of the top three brands. The 2010 latest top three interactive entertainment products are Play Station3 (owned by
Sony Corporation), Xbox 360 (owned by Microsoft), and Wii (owned by Nintendo). However,
Sony Corporation also did not do well in its game industry. Compare to other two top brands,
Play Station 3 has the lowest units shipped worldwide, and the figures are based on data from the manufacturers.
Market sales of Gaming Machines in 2010
Console Units shipped to retailers (worldwide) PlayStation 3 38.1 million (as of June 30, 2010) Xbox 360 41.7 million (as of June 30, 2010) Wii 73.97 million (as of June 30, 2010) (“History of video game,” 2010)
Sony Corporation is also involved in the music industry by having Sony Music
Entertainment. It is one of the top four companies in the industry although it does not dominate the music market. IFPI (International Federation of the Phonographic Industry) did a market research on how much do each top four music companies own in the music market in 2005.
Market Sale in Music Industry in 2005
Rank Company Name Owner (%) 1 Universal Music Group Vivendi (France base) 25.5 % 2 Sony BMG Music Entertainment Sony Corporation (Japan base) 21.5 % 3 EMI Group Terra Firma Capital Partners (UK base) 13.4% 4 Warner Music Group Times Warner (USA base) 11.3% (“Global market for recorded music.” 2005) Conglomerate: Sony Corporation 20
B. The Buzz
After comparing Sony Corporation with different companies in different industries and reading the news report, the founding is that Sony Corporation has a lot of different businesses and a large amount of revenue, but the sales are not the best if looking at each industry individually. However, Sony Corporation is a worldwide famous brand and is ranked in 34th place in the “Best Global Brands” according to Interbrand (“Best global brand,” 2010). Recent news report shows that Sony Corporation is an active corporation by introducing new technology—3D Television, and new product―PlayStation® Move. Also, Sony Picture
Entertainment is featuring its new movie, Paranormal Activity 2.
V. Analysis
Since Sony Corporation’s businesses are in more than one field, a number of businesses are close, related together and are able to promote each other. By just using the electronics of the conglomerate, Sony Corporation is able to promote all of its other entertainment industries- game, music, and movie. The latest Play Station 3 would be an obvious example, the gaming machine is not only a gaming machine but also a downloader which able to connect to the internet. Play
Station 3 is able to download movies and music on Sony’s online store by using its built-in Wifi to connect to the internet. Moreover, Play Station 3 is also able to play high definition blue-ray disk. In conclusion, Play Station 3 is a combination and synergy of most of Sony Corporation’s electronics. Since Sony Corporation also involves in electronic, movie, and music industry, it is able to promote these business simply by the gaming machine. If video games become popular,
Sony has access to produce and distribute movies based on the games, Silent Hill is one of the video games examples. Sony Corporation produced this video game for its gaming machine―Play Station and produced a Silent Hill movie which was produced by Sony Conglomerate: Sony Corporation 21
Corporation’s subsidiaries as well. After showing in movie theaters, Silent Hill turned into disk and was also distributed by Sony Corporation’s subsidiaries. Since the DVD is in the market,
Sony Corporation is able to promote its electronics for the DVD, such as television, DVD player, speakers, etc. Furthermore, if movies become popular and have nice music in them, Sony
Corporation is also able to produce and original sound track from its music companies.
VI. Interpretation & Conclusion
Because one corporation owns different businesses, it is possible that few companies would dominate in particular medium, but Sony Corporation does not show obvious domination.
It is a fact that Sony Corporation has a large number of subsidiaries and afflicted companies, but the Sony brand is not the only few options to choose from, even though the Sony brand is highly ranked in a lot of industries. If it is necessary to mention a particular dominated field, the gaming industry would be the market that Sony has little more over power. Although Sony did not get the most revenue out of gaming industry in 2010, Play Station 3 which is owned by Sony
Corporation is one of the well-known brands. Nowadays, there are mainly three brands of video game machine to choose form, and Play Station is one of the big brands and one of the few options to choose from. Video games as a medium might not be as strong as television or film, but they can also affect the society to a certain extent.
People often think conglomerate are bad not only because of domination but there are also a lot of niches in this system. First, corporations would be lack of focus and enable to manage all of the businesses equally well. The statistics showed earlier that Sony Corporation does have a lot of businesses involved, but there is no specific one industry that has the best sells every year or dominate a specific medium. One business can drag another business in a conglomerate; however, one business can also boost another business in a conglomerate. Since Conglomerate: Sony Corporation 22
Sony Corporation has different businesses which are closely related, the businesses are able to cross-promote each others’ products.
Draggers and boosters exist at the same time in a conglomerate, but Sony Corporation overall has a strong public identity since it is a worldwide conglomerate. Usually, if a brand is well-known by the public, it means the brand has a strong identity. According to
RankingTheBrands.com, the website organized a lot of rating charts throughout the world. Sony is often on top of the list when it comes to the rankings. For example, Sony Corporation was positioned in 34th in the 2010 Best Global Brands and positioned in 3rd in the Japan’s Best Global
Brands according to Interbrand (“RankingTheBrand,” 2010). Moreover, consumer electronics products which is what the corporation is known for, also gives the corporation a public identity.
The associations to the product/services or the company might not be all positive, but it shows that Sony Corporation is a brand that people are aware of. In other words, the existing of the
Sony brand has been sensed, selected by people’s mind, perceived as positively or negatively, remembered of the look, learned about the background, and known as a national consumer electronic.
All conglomerates are started from the basic—a one single company, and it would expand, merger, and joint to become a big conglomerate. Conglomerate’s strategy is that: First, the parent companies develops and get well-known. Second, they would diverse and get involved into other businesses in order to make more money. If they have some experience regarding to the new field, they would establish their own companies or joint with other companies. If they do not have the experience, they would absorb other small/medium companies which are familiar with the new field that the parent companies do not. At the end of the corporation, the parent Conglomerate: Sony Corporation 23 company would make money and eventually wholly-own the small/medium companies and listed them as part of the affricated companies.
All of these planning are just a way to hide that conglomerate are actually money-driven companies. Most companies do not want to give out this kind of bad impressions to the public, so they often say things in other words. One thing that large companies only care about is money, but it is obvious that they do not present this kind of image to the general public. For example,
Sony states that its innovation is based on public need not its technology, but the true meaning is that it is sending positive messages to positively impress the public so that people would have positive associations. Once people have positive associations, people buy the brand and revenue goes to the corporation.
An example of absorbing another company in order to help the parent company to grow would be Sony Corporation buying Columbia Pictures Industries. This is a case that a Japanese consumer electronic company buying an American film production and distribution company;
Two companies are in different industries with only some relation. Because Sony Corporation wanted to have more revenue, it expanded its businesses into the film industry. In this case, Sony can not only make money from producing and distributing films by the ticket sales but also the money from the disks which is related to their original personal electronic business.
Since there are so many conglomerates nowadays, the general public should understand where media content comes from so that they have a sense of what kind of news are being reported and hidden. Companies often choose to only report positive news about them since impressions affects their revenue. If people have more positive impression of a company, they are more willing to purchase its products or use its services. More products are sold means more money into the companies. In this case, Companies do not like to reveal bad images to the public. Conglomerate: Sony Corporation 24
On the other hands, the general public actually is more willing to know about the gossips and bad things about the companies or products. People would like to know what and how the companies are doing more than the image that the companies present to them. Because people are not able to control where the media contents are from, knowing the resource is the only way for people to look at other hidden information. If the general public knows where the media contents are from, they would know what kind of content might be missing and would have a sense of what are missing. It is necessary to know what kinds of information are limited, for people have to know different sides of stories in order to make right decisions.
Conglomerate: Sony Corporation 25
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