Kaz Hirai shows 'One Sony' transformation technique, will cut 10,000 jobs

Diposting oleh fawaid on Kamis, 12 April 2012


Sony Organization ("Sony" or "the Company") today declared a sequence of ideal projects to be presented under the new management team founded on Apr 1, 2012. By employing a fast decision-making technique that attracts on the strong points of the entire Sony Team as "One Sony", Sony is designed to refresh and develop the gadgets company to produce new value, while further building up the constant company footings of the Enjoyment and Financial Service companies.

Key projects to convert the gadgets company are:

  1. Strengthening primary companies (Digital Image resolution, Game, Mobile)
  2. Switching around the television business
  3. Growing company in growing markets
  4. Creating new companies and increasing innovation
  5. Realigning the company collection and improving resources
By employing the above actions, Sony will focus on revenue of 6 k yen and managing earnings edge of 5% in its gadgets company, and revenue of 8.5 k yen, managing earnings edge of more than 5%, and come back on value ("ROE") of 10% for the Sony Team overall, in the financial year conclusion April 31, 2015 ("FY14").

Details of these five primary projects to refresh the gadgets company and drive new growth are as follows.

Building up core companies (Digital Picture resolution, Activity, Mobile)

Sony is positioning electronic imaging, game and cellular as the three main focus places of its gadgets organization and programs to concentrate investment and technological innovation progression resources in these places. By growing these three companies, Sony is designed to generate approximately 70% of complete revenue and 85% of managing earnings for the whole gadgets organization from these categories by FY14.

Digital Picture resolution - Sony is strengthening its progression of image receptors, signal processing technological innovation, lenses and other key electronic imaging technological innovation in which it performs exceptionally well, and programs to power these technological innovation in both its customer items (such as compact electronic still digital cams, digital cams and similar lens electronic cameras) and transmitted and expert items (such as expert use digital cams and protection cameras) to be able to further strengthen and differentiate Sony' overall products. The Company also programs to extend the use of these key technological innovation across a variety of organization applications, from protection to medical, to further expand the opportunity of its electronic imaging organization. Sony will focus on complete revenue of 1.5 k yen and double-digit managing earnings edge from the individual, expert and image indicator companies by FY14.

Game - In the experience organization, Sony continues to produce thrilling enjoyment experiences through PlayStation®3, PlayStation®Vita, and its unique combination of hardware, software, PlayStation®Network ("PSN"), and variety of accessories and add-ons. These will form the foundations on which Sony will focus on further revenue and profit expansion in the experience organization. The Company also is designed to increase revenue by enhancing its collection of down-loadable games and subscription services available through the PSN foundation, and also by expanding the collection of PlayStation®Suite compatible devices and articles. Sony will focus on game organization revenue of one k yen and managing earnings edge of 8% by FY14.

Mobile - In the area of cellular, Sony is developing the R&D, design technological innovation, and marketing and advertising functions of its mobile phone organization (operated by Sony Mobile Devices, now a wholly-owned additional of Sony), "Sony Tablet" and "VAIO" companies to be able to quickly develop and produce compelling items to market. Sony also programs to strongly power its many technological innovation in places such as electronic imaging and game, its rich articles assets including pictures, music and game, its "Sony Entertainment Network" system service foundation, as well as the marketing and sales communications technological innovation expertise and knowledge gathered through its experience in the cellular phone industry, to launch new cellular items and establish new organization models. Additionally, by developing functions across its whole cellular item collection, Sony is designed to achieve further advantages and optimization. As a result of these measures, Sony will focus on revenue of 1.8 k yen in FY14 from the cellular organization, and significant earnings improvement.

Switching around the tv business

Sony is already involved in a complete tv earnings enhancement plan (announced Nov 2, 2011), which is designed to return the tv company to earnings in the financial season conclusion April 31, 2014 ("FY13"), and plans to improve these actions going ahead. The sale of Sony's share in its LCD section developing partnership with New samsung Gadgets has been accomplished, leading to panel-related cost discount rates. Furthermore, Sony is getting further actions to change the company framework, for example by enhancing design technological innovation performance and decreasing the number of item designs (targeting a 40% decrease from the financial season finished April 31, 2012 ("FY11") to the financial season conclusion April 31, 2013 ("FY12")), with the aim of decreasing set company expenditures relevant to the tv company by 60% and managing expenditures by 30% in FY13 compared to FY11.

Sony is also making plans to boost the picture and audio quality of its "BRAVIA" range of LCD tv sets that form the foundation of its current tv collection and to customize its item providing to meet specific local market needs. Going ahead, Sony plans to advance the development and commercialization of next-generation screen technological innovation such as OLED and "Crystal LED Display", as well as boost the incorporation of tv sets with Sony's mobile products, with content such as films and music, and with other resources across the Sony Group to improve item competition, drive components difference and boost the appeal of Sony's item collection.

Growing business in growing markets

Sony will keep power its powerful international functions and brand strength to drive revenue growth in rapidly expanding growing marketplaces.

Sony has already established powerful footings in growing marketplaces. For instance, in Indian and South america, among others, Sony has properly secured the biggest share of the individual AV/IT industry. Sony will keep concentrate its marketing and advertising resources in these marketplaces, and desires to enhance revenue functions, present items designed to local needs and power the Sony Team's enjoyment resources, such as images, music and television networks, to further enhance its industry presence.

Sony generated 1.8 k yen through revenue of gadgets items in growing markets* in FY11, and is designed to increase this figure to 2.6 k yen in FY14. The Company will also aim for customer AV/IT revenue in growing marketplaces to signify 60% of total estimated international revenue of these items by FY14.

*Regions other than Asia, North America and European countries.

Creating new businesses and increasing innovation

Sony will keep strongly enhance advancement intended to deliver mid- to long-term development, as well as the development of distinguishing technological advancement that enhance primary item value.

Specific examples of company areas in which Sony will focus on mid- to long-term development are healthcare and 4K-related technological advancement.

Sony is mostly a new entrant to the healthcare industry. In the healthcare add-ons company Sony has already successfully released a range of healthcare printers, screens, cameras, camera and other medical-use items, and will focus on sales of 50 million yen in this industry in FY14. Sony also programs to get into the industry for healthcare devices components, where its strong points in various primary digital image resolution technological advancement offer significant competitive advantages in applications such as endoscopes. Furthermore, Sony programs to get into the lifestyle technology industry, where the Company can power its expertise in technological advancement such as semiconductor laser treatment, picture receptors and microfabrication. In the lifestyle technology industry, Sony has acquired iCyt, a manufacturer of cellular analysis devices, and Micronics, which produces healthcare and diagnostics devices. Sony programs to keep strongly engage in other M&A opportunities to grow its healthcare company continually with Sony's own strong points, with the aim of developing the company into a key main of Sony's overall company collection.

Sony is also drawing on its comprehensive strong points in audio and visual technological advancement to strongly enhance the development of "4K" technology, which provides more than four times the resolution of Full HD. Development of Sony-developed technological advancement, such as picture receptors, picture processing pressure LSIs and high-speed visual indication segments into its professional-use and high-end consumer items will create Sony to keep increase and improve its 4K-compatible item collection.

Realigning the company collection and improving resources

Sony is increasing its continuous process of company selection and focus, and is focusing its assets in primary and new company places. In terms of financial commitment, primary places include the development of Sony's picture indicator developing potential, investment financial commitment in mobile products and competitive ideal financial commitment in development or M&A with regards to new company places such as medical. Other current company places will be analyzed according to the following four requirements, so that Sony can figure out the the best possible way of these companies, such as practical consideration of alliances and company transactions in order to boost its overall company portfolio:
  • Loss making, adverse managing income or low income businesses
  • Restricted synergies with primary businesses
  • Businesses where commoditization is innovative and leads for development are limited
  • Businesses where possibilities for revitalization and development are improved through cooperation with lovers rather than separate function by Sony
For example, in the small- and medium-sized screen business* and chemicals business**, Sony has already relocated or is in discussions to exchange those companies to exterior events. Furthermore, Sony is also checking out possible alliances in the area of battery power for electronic automobiles and energy storage segments.

* "INCJ, Hitachi, Sony and New laptop Indication Specified Deals Regarding Incorporation of Small- and Medium-Sized Display Businesses" declared on Nov 15, 2011
** "Development Bank of Asia and Sony Indication Non-Binding Memorandum of Understanding for Purchase of Substance Items Businesses" declared on April 22, 2012

In addition to this company collection change, as Sony goes to boost its primary companies and switch options to development areas, it will also rebuild its head office, subsidiaries and sales company companies in order to further boost functional advantages. As a result of these actions, Sony reports that the headcount across the entire Sony Team will be reduced by roughly 10,000 in FY12. This contains workers predicted to exchange outside the Sony Team as part of the sale of companies and other realignments as a result of company collection seo. Sony anticipates that many of these companies will have future development possibilities outside the Sony Team, and Sony will consider various actions to protected a continual of career for workers at their new locations. Sony is showing reorientating costs of 75 million yen in FY12.

Cautionary Statement

Statements made in this launch with regard to Sony's current programs, reports, techniques and values and other claims that are not traditional facts are forward-looking claims about the long run efficiency of Sony. Forward-looking claims involve, but are not restricted to, those claims using terms such as "believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate," "project," "anticipate," "aim," "intend," "seek," "may," "might," "could" or "should," and terms of identical significance in connection with a conversation of upcoming functions, economical efficiency, activities or circumstances. Occasionally, oral or written forward-looking claims may also be included in other materials launched to the public. These claims are based on management's presumptions, conclusions and values in lighting of the details currently available to it. Sony warns you that a number of important threats and issues could cause actual results to change materially from those mentioned in the forward-looking claims, and therefore you should not place excessive dependency on them. You also should not rely on any responsibility of Sony to upgrade or change any forward-looking claims, whether as a result of new details, upcoming activities or otherwise. Sony disclaims any such responsibility. Risks and issues that might affect Sony involve, but are not restricted to (i) the global economy in which Sony performs and the financial circumstances in Sony's marketplaces, particularly levels of customer spending; (ii) forex trading rates, particularly between the yen and the U.S. dollar, the dollar and other foreign exchange in which Sony makes significant income and happens upon generation costs, or in which Sony's obligations and resources are denominated; (iii) Sony's capability to continue to design and create and win popularity of, as well as achieve adequate cost discount rates for, its goods and solutions, such as LCD tv sets and game systems, which are offered in highly competitive marketplaces recognized by constant new item and service for every, fast progression in technical innovation and very subjective and modifying customer preferences; (iv) Sony's capability and a chance to extract large-scale resources required for technical innovation progression and generation capacity; (v) Sony's capability to apply effective company reorientating and modification initiatives under modifying industry conditions; (vi) Sony's capability to apply effective components, software, and content incorporation techniques for all sections taking out the Financial Services section, and to create and apply effective income and submission techniques in lighting of the Internet and other technical developments; (vii) Sony's ongoing capability to spend adequate resources to research and progression and, with regard to capital expenses, to focus on resources properly (particularly in the gadgets business); (viii) Sony's capability to maintain item quality; (ix) the potency of Sony's techniques and their performance, such as but not restricted to the success of Sony's products, joint projects and other ideal resources (in particular the recent getting Sony Ericsson Mobile Devices AB); (x) Sony's capability to prediction requirements, manage appropriate purchase and control inventories; (xi) the result of awaiting legal and/or regulating proceedings; (xii) changes in customer demand for economical solutions such as insurance coverage and Sony's capability to perform effective resource obligation management in the Financial Services segment; (xiii) the effect of undesirable circumstances or improvements (including industry changes or volatility) in the Japoneses value marketplaces on the income and operating income of the Financial Services segment; and (xiv) threats related to disastrous problems or identical activities, such as the Great Eastern Asia Earth quake and its results as well as the Oct 2011 flooding in Thailand. Risks and issues also involve the effect of any upcoming activities with material negative effect.

Sony is currently changing its company section category to indicate its reorganization as of Apr 1, 2012. Sony desires to report its operating results in line with new company sections from the first one fourth of the financial year conclusion Apr 31, 2013.

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