Friday, February 27, 2009

Sony's Reorganization Reinforces the Importance of Interdependency

Sony's reorganization announced today reinforces the issues that we touched on in our class discussions.  Some of the key points that relate to our discussions are (details from the FT article):


1. More emphasis on networked products and services. 
"Sony will also reorganise its electronics business into two new groups. The PlayStation video games business will be integrated with laptop computers and mobile products such as the Walkman music player, to try to speed the development of networked products and services."


2. Integration across products.
"A new consumer products group will bring together Sony’s struggling TV business with other devices such as digital cameras, as well as semiconductors and electronic components."
My guess is that these devices--if they do not prove profitable in the coming years--will be discontinued or spun off. 
3.  Changed organization structure staffed with people familiar with the digital world.  Another key point to note is that the organization restructuring elevates people familiar with the digital world. Businessweek reported that: 
Though Stringer put those things at the top of his to-do list when he took over three years ago, his efforts have been hampered by divisive rivalries and strong resistance from the company's old guard of hardware engineers. "This group is very network-centric and very open-minded," Stringer said. Stringer didn't reveal many details about the strategy. But the point man for his push into Internet services will be Kazuo "Kaz" Hirai. As the head of Sony's video-game business, the 48-year-old Hirai has spent the past two years expanding network services for the PlayStation 3 and PlayStation Portable consoles. Last week, Sony said more than 20 million PS3 users have connected their machines to the Net and signed up for the PlayStation Network, which features online games, video downloads, news, and a social-networking service.  (Sony needs to capitalize on this network). 

 See also this video:

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