Sony Corporation is an international company that was established in 1946 by Masaru Ibuka and Akio Morita, the company’s headquarter is located in Minato, Tokyo, Japan. The company was originally called Tokyo Telecommunication Engineering Corp which started with as little as $1500. Ibuka and Morita decided to operate the firm internationally in the 1950s and changed the name to Sony since the name Tokyo Telecommunication Engineering Corp was already taken at the time. The first product Sony released onto the market was a transistor radio in 1955 which was the first one in Japan at the time; some other key products developed by Sony are the Headset stereo walkman in 1979, Compact Disc Discman in 1984 and Mini Disc system which was launched in 1992. Today Sony offers a wide range of electronic equipments such as home and portable audio system, digital cameras, DVD players, televisions, video game console, mobile phones and both home and portable computers. The company has become extremely successful today; according to its consolidated financial results, its sales and operating revenue were 78.88 billion US dollars in 2009. So just what makes the company so successful despite operating in such a competitive industry and starting with so little fund? To answer this question we will examine the organisation, management and research and developments of the company as well as any strategic alliances and collaborations with other firms.
Before we look at the research and developments carried out by Sony Corporations, I would like to quickly mention the recent trend of R&D activities in the UK as well as the global.
According to the DIUS review, the 850 largest corporate in the UK spent over ₤21.6 billion on R&D activities in 2007, which was an increase of 7% compared to the previous year, 2006. Globally, 1,400 of the worlds most active companies invested over ₤274 billion in 2007, which increased by 9.5% from the previous year. These data suggest that Research and development becomes more and more popular to companies all over the world as companies starting to understand the importance of R&D activities
R&D is vital to the survival of a company due to the increasing competition from rivals in all kind of industries in the world. Companies need to constantly improve the design and performance of its products in order to stay ahead of its competition. By having better products with better design, performances and more importantly products that suits consumer’s taste than rivals, a company can gain a larger portion of the market shares, therefore making more profits.
Research and development activities can usually be separated into two main categories, they are internal R&D and non-internal R&D. Internal research and development is basically any R&D activities that are carried out or managed by the company itself. On the other hand, non-internal research and development are R&D activities that aren’t operated by the company itself, strategic alliances and collaboration with other companies is a good example. Sony Corporation employs both internal and non-internal R&D activities which we will be discussing shortly
The below diagram demonstrates the amount of money spent in R&D by Sony Corporation from 1998 to 2007. As we can see from the diagram, R&D expenditure has increased gradually from 375314 billion yens to 514483 billion yens from 1998 to 2003. And from 2003 to 2007, the amount on money invested in R&D fluctuates between 514483 billion yens to 543937 billion yens. Sony Corporation spent around from 5.8% to 7.8% of their sales and operating revenues on R&D during this period of time.
So just what did Sony Corporation’s R&D focuses on? According to the company’s fact book that was published in 2006 on its website, it stated that the company’s R&D will be focusing on four main areas, they are:
- Platforms for home and mobile electronics
- Semiconductor technologies
- Devices technologies and
- Software technologies
To improve the platforms for home and mobile electronics, Sony focuses on developing products that support the high definition content. In semiconductor technologies, Sony focuses on developing electronic applications for Cell, which is a very powerful microprocessor.In devices technologies, Sony is focusing on developing Blu-ray disc technologies which is designed to enhance High Definition vision to the next level. Finally for software technology, Sony focuses on developing software that helps consumers to operate electronic products in a more user friendly way. Other software focuses are codecs and Digital Rights Managemnet (DRM) which is designed to protect products such as music, video and ebooks.
Sony Corporation has a total of three developments group and four research centres around the world. There 3 groups and 4 centres are under Sony’s direct control, they are:
- Technology Development Group – this department involves in developing common element technologies and newly launched products in order to expand the business.
- Display Device development Group – this department involves in developing new display for the next generation of products
- Core Technology Development Group – this department involves in developing new devices for the next generation of products
- Materials Laboratories – this department involves in finding new advanced materials to produce more superior products which in turn increases the competiveness of the company.
- Information Technologies Laboratories – this department focuses on researching in new information in order to produce products that set apart from rivalry’s products
- 6)A-cubed Research Center – this department involves in research of image signal processing technologies
- Sony Computer Science Laboratories The seven departments we have just looked at is operated by Sony Corporative Headquarter directly, which means they are in-house R&D, we will next look at the non-internal R&D activities carried out by Sony, its strategic alliances and collaborations with other major company’s
Sony has a large number of different strategy alliances and collaborations with different companies. In this essay, it will be focusing on two of the most well known examples, they are Sony Ericsson and Sandisk. Sony Ericsson was established in October 2001, it was a joint venture of Sony