After 7 years of British reign, Sony is looking back to the Japanese to turn around the company after a reported $2 billion loss. Howard Stringer’s tenure as CEO ends later this year and Kazuo Hirai is all set to take over the company in an attempt to bring it back to profitability. After Mr. Stringer’s numerous attempts at turning around the electronics business failed, the board obviously seems to have felt the need for a change in leadership and brought in the 51 year old executive who has spearheaded several projects in Sony, with the most important being his role in turning the PlayStation into a profitable venture in a very short time span.
A change in the leadership couldn’t have come at a better time for Sony as it is trying its best to avoid being squeezed out of the smartphone market by Samsung and Apple. Samsung, with its magical ability to minimize manufacturing costs, and Apple’s immaculate design sense has proved too much Sony so far, which was once epitomized as the ‘cool’ electronics company. Moreover, with the yen rising around 30% against the dollar in 2011, Sony has suffered from capital value fluctuations to the tune of hundreds of millions of dollars.
After the announcement, Hirai outlined his plan for the company, which was actually quite simple. The most important step, he said, was to reduce costs and modify the organizational structure of the electronics giant which has till now prevented innovative ideas from surfacing. In fact, this is similar to the strategy he employed when he worked with the PlayStation division and helped it become the top gaming console in 2011.
From being a company that developed the next cool gadget in electronics, Sony has almost become a relic of the past. Its stock its lowest point in the last twenty years and the company’s credit rating was lowered last month. Mr. Hirai plans to prioritize changing the attitude of the company’s 168,000 employees to one that he believes will allow the company to survive and then thrive in the present market. He believes the critical aspect to any product is the user experience it offers and this is something Sony has been missing in the recent past. Hirai is a veteran of the electronics business and is familiar with the long history between Japanese goods and global markets. While some people continue to expect Sony to manufacture immaculate hardware, he thinks it is time the company added something more intangible instead: a captivating user experience.
