Sony Corporation: A Case Study Analysis
Matthew R. Andreychuk, Project Manager
WestCom Group Consulting
School of Communication
Telecommunications & Information Management
Western Michigan University
Kalamazoo, MI 49006
February 4, 2008I. Historical Overview
Sony Corporation was founded by two men that would spend the next 40 years mastering innovation, technology, and business: Masaru Ibuka and Akio Morita. These two men helped form a small telecommunications company called Tokyo Telecommunications Engineering Corporation (TTEC), which focused on engineering research and development after the end of WWII.[i]Starting up with a capital investment of only ¥190,000 (or $500), the TTEC struggled financially in a ruined post war Japan. The TTEC looked to noncommunication devices such as rice cookers and heat cushions just to raise enough cash flow to meet payroll. [ii] Being focused on research and development, TTEC used simple innovative research tactics to produce the
first Japanese tape recorder. TTECproduced their first tape recorder in 1950 and then began to
work on transistor radios.[iii] In 1956, the TTEC introduced the first pocket sized transistor radio, the TR-63.
Morita believed that if the TTEC was going to be internationally recognized, they
needed a name that would be better understood in foreign markets. In 1958, the Tokyo Telecommunications Engineering Corporationchanged its name to Sony, combining the word sonny (little man) and the Latin word sonus (sound). Sony became known for their innovative technologies based on a hard dedication to research and development.
Building the Sony Brand
A successful brand name identifies a connection with a consumers mind with a product or service they provide. Consumers will purchase the brand name productbecause they trust
the company. They know the quality is good, and they won't have trouble obtaining a refund
or replacement if for some reason the product is damaged or otherwise unacceptable.
Sony has transformed into one of the largest transnational media corporations of today by creating these brand identities. It is one of the largest high tech electronics producers in theworld, with revenues in 2008 exceeding $88.7 billion dollars. From Sony’s ever so popular transistor radios in the 50’s and 60’s, to today’s high-definition (HD) televisions, Sony has been pushing the development of new technology. Creating internationally known brand names such as the Walkman, Handycam, Cyber-shot, PlayStation, VAIO, and BRAVIA, Sony has, from the start, created manyinnovative products and product brands.[iv] It is beyond the scope of this
paper to consider the many different products that Sony has introduced over the years.
Instead, let us consider two: the Sony Walkman portable music player, and Sony PlayStation game console.[v]
The Sony Walkman
The Sony Walkman has changed the way consumers will listen to music forever. In the late 1960s, Sony and otherconsumer electronics manufacturers began the mass production of cassette tapes and recorders. Tape cassette machines were considerably smaller than its predecessor the reel-to-reel tape machine, but lacked sound the quality that consumers were looking for. By the late 1970s, the tape cassette machines improved significantly and had become an established norm in audio delivery.
The idea of theWalkman came about when Sony co-founder Masaru Ibuka was planning a trip to the US. Ibuka enjoyed taking his reel-to-reel tape machine with him when he traveled, but because of the size of the machine, Ibuka realized the need for a smaller audio playback device. Ibuka asked his tape cassette recorder division at Sony to build him a smaller audio
playback device, which resulted in them...