Sony CEO Lays Out New Plans to Make Company Profitable
April 12, 2012 11:08 AM
comment(s) - last by
Sony CEO Kazuo Hirai
Changes to digital imaging, games, mobile and TV are on the list
Sony CEO Kazuo Hirai announced his "One Sony" approach today, which consists of a series of initiatives that aim
to turn the company around
Hirai, who became CEO starting April 1, has quite an agenda for the sinking ship he has inherited. He laid out five key ideas for transforming Sony's electronics business, including strengthening core businesses (digital imaging, games and mobile); turning around the television business; expanding business in emerging markets; creating new businesses and accelerating innovation, and realigning the business portfolio and optimizing resources.
Hirai announced previously that the three core pillars of Sony's business would be digital imaging, games and mobile. In today's "One Sony" presentation, he noted that he hopes to generate 70 percent of total sales and 85 percent of operating income for the entire business from these three pillars by fiscal year 2014 (FY14), which is the year ending March 31, 2015.
To break it down further, Sony hopes to leverage key digital imaging technologies like image sensors, lenses and signal processing via consumer products and has a total sales target of 1.5 trillion yen for the consumer, professional and image sensor businesses by FY14.
As far as games go, Sony will continue offering gaming experiences through its PlayStation hardware as well as the PlayStation Network, but plans to expand its catalog of downloadable game titles and subscription services. Sony hopes for one trillion yen and an operating income margin of 8 percent by FY14.
With mobile, Sony wants to pull its VAIO, smartphone and Sony Tablet businesses together to offer superior mobile devices that feature the Sony Entertainment Network. Sony is looking for sales of 1.8 trillion yen in FY14.
While the three core pillars remain the primary focus of the company, the TV business still holds a special place in Hirai's heart. He has said before that he wants to turn it around after years of consecutive losses, and even said he'll be directly running this unit himself.
correct the TV business
, Hirai plans to improve design engineering efficiency, reduce the number of models by 40 percent from FY11 to FY12, and enhance the quality of its BRAVIA LCD televisions with OLED and Crystal LED Displays. Hirai hopes to make the TV unit profitable by FY13 by reducing fixed business costs by 60 percent and operating costs by 30 percent from FY11 to FY13.
Other changes that Hirai plans to implement around the company is increased sales of electronics in emerging markets from 1.8 trillion yen in FY11 to 2.6 trillion yen in FY14; entry into the medical industry by creating medical equipment, targeting sales of 50 billion yen in FY14, and implementing overall restructuring costs of 75 billion yen in FY12.
By completing all of the above, Sony hopes to generate 6 trillion yen and operating income margin of 5 percent for its electronics business in FY14. It also hopes for sales of 8.5 trillion yen and operating income margin of over 5 percent for the Sony Group overall in FY14.
Sony could certainly use all the help it could get. One of its worst issues was the LCD TV business, which had eight years of consecutive losses. After
shaking up this unit
in 2011, Sony finally sold its 50 percent manufacturing stake to Samsung in their LCD joint venture called S-LCD Corporation.
Standard & Poor's Ratings Services confirmed an unfavorable outlook on
Sony's long-term corporate credit rating
long-term corporate credit and senior unsecured debt ratings dropped from an "A-" to "BBB+."
To make matters worse, Sony then announced that it would
cut 6 percent of its global workforce
as soon as the end of 2012. It then announced that it expected an
annual net loss of $6.4 billion USD
This article is over a month old, voting and posting comments is disabled
RE: Key points
4/12/2012 2:22:31 PM
Unfortunately, leaked documents currently show Sony's plan as:
1. Tell everyone we are "laying out plans to become profitable"
RE: Key points
4/12/2012 2:43:56 PM
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
Sony Ups Annual Net Loss Prediction to $6.4 Billion USD
April 10, 2012, 10:36 AM
Sony to Cut 6 Percent of Its Global Workforce
April 9, 2012, 10:38 AM
New Sony CEO to Take Over Struggling TV Unit, Make Other Management Changes
March 27, 2012, 10:08 AM
Sony's Long-Term Corporate Credit Rating Lowered
February 8, 2012, 10:05 AM
Sony Sells LCD Panel Joint Venture Shares to Samsung
December 26, 2011, 11:31 AM
Skrillex Releases Free Album Inside App, But Crashes Torture Fans
March 13, 2014, 8:04 PM
Microsoft Waives Windows Phone OS Licensing Fees for Two Hardware Makers in India
March 13, 2014, 1:07 PM
Huawei Says Windows Phone is "Low Priority", Relegates It to Dual OS
March 13, 2014, 11:21 AM
$1,200 Nikon 1 V3 Mirrorless Camera Offers 120fps Slow Motion Capture
March 13, 2014, 9:04 AM
Surface 2 LTE Tipped for AT&T, Power Cover Available for Pre-order
March 12, 2014, 9:15 AM
HTC One Leaks: LED Smart Cover, Carrier Models, Google Play Ed.
March 11, 2014, 5:30 PM
Most Popular Articles
Bitcoin King Pt. II: Mt. Gox's Dictator Karpelès Proves Tragically Flawed
March 7, 2014, 1:12 PM
Hack Reveals Fallen Bitcoin CEO's Posh Tokyo Penthouse
March 10, 2014, 4:28 PM
NASA Considering SpaceX "Red Dragon" for Returning Mars Samples to Earth
March 10, 2014, 2:43 PM
India Could Rock Google With Its Biggest Antitrust Fine Yet -- $5B USD
March 10, 2014, 8:12 PM
Sony, Panasonic Announce Archival Disc Standard Coming in 2015
March 10, 2014, 8:50 AM
Latest Blog Posts
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
Is The Period Becoming an Expression of Anger?
Nov 26, 2013, 2:02 PM
NSA and Congress -- You Will Never Kill the Constitution, It's an Idea
Nov 10, 2013, 2:00 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information