Introduction
The Sony Corporation is a global organization
based in Japan. Its main interests are in electronics
(video and audio equipment, televisions, computers
and software, telecommunications equipment and
electronic components) and entertainment (computer
games, record labels and motion pictures). Accessories
like the Sony Walkman, the Handycam and the Discman
are more than products; to millions of consumers,
they represent a way of life. That's not a reputation
Sony plans to forfeit anytime soon. And though
times have changed, in that Sony's pioneering
analog products have been replaced by a raft of
digital gadgetry, the mission is the same: produce
winners.
Year after year, Sony products are acknowledged
as the industry's best by the readers of Incentive
Magazine. Their extensive line of consumer electronics
is made up of products that people actually use
to enhance their time away from the workplace.
What could be better? What's more, Sony is entirely
dedicated to the premium incentive business. (In
fact, incentives are so important to them, they
have an entire division to focus on this exciting
field.)
Sony's turnkey programs make running a program
as easy as turning on a radio. The Sony Collection
is a flexible turnkey incentive program that makes
getting started effortless. There is an assortment
of nine beautifully illustrated "plateau
sheets," each containing products grouped
by price point. One can use The Sony Collection
in its entirety, or mix and match the levels to
accommodate one’s goals and budget. Introductory
levels are ideal for smaller programs and instant
recognition. A broader assortment of levels can
create extremely effective plateau programs. If
these turnkey programs don't quite fit one’s
needs, Sony will work with one to create the ideal
program that does. They build a program together
that can include products like Dream Machine(R)
clock radios, Walkman(R) personal stereos. DiscMan(R)
CD players, Trinitron(R) TVs, Digital Mavica(R)
still image cameras, Handycam(R) camcorders. DVD
players and Complete Home Entertainment Centers
to create a compelling and manageable incentive
program. One that's sure to get results. (Nathan,
1999)
Sony’s Production and Operations
Indeed, the digital age has placed a new importance
on Sony's culture of creativity. More than three-quarters
of its revenue-expected to jump 20%, to a record
$37 billion, in the fiscal year ending this month-comes
from electronics. Sony won in the past by staying
several technological steps ahead of its competitors.
As the company edges into the gist century, however,
it faces new rivals in both the computer and broadcasting
businesses. No longer is it enough to offer hot
products. Now even the simplest gadgets have to
be able to talk to each other, or to offer audio,
video and computing capability simultaneously,
and still be small and user-friendly. If Sony
is going to keep its edge, design will decide
whether the company becomes a winner or an also-ran
in the digital age. (Schlender et al, 1995)
The key to that bet on the future is located in
the southern part of Tokyo, in a studio where
a team of Sony product designers, about 40 men
and women, are busily creating the future of the
company. Sony knows better than most that the
products blowing off shelves today are tomorrow's
cut-rate sale items, next week's doorstops. The
result is a company driven by a culture of pure
creativity and outstanding quality. It shows in
the products-Sony devices have a plastic elegance
few companies can match-and in the late 20th century
the brand is as magical as Nike, Coke and MTV.
At Sony, little distinction is seen between future-looking
technology and futuristic-looking products. Shutaro
Mukai, a design professor at Musashino Art University
and an expert on Japanese industrial design said
that Innovation now depends on design. (Collins,
2001)
The torturous process sometimes risks killing
even good ideas. When chief designer Akihiko Amanuma
headed the U.S. design team during the late 1980s,
his group hit on the idea of a special Sony product
line for kids. In an era when cool hi-fi meant
sleek black easing, Amanuma thought cartoony blue-red-and-yellow
boxes with big plastic handles and chunky buttons
would nurture a new generation of young Sony fans.
Ohga, then Sony’s president, hated the idea;
Sony did not make toys. But Morita didn't think
Sony's hard-won image would suffer at all, and
eventually Ohga dropped his opposition. Result:
My First Sony and a successful revolution in kids'
electronics. (Takiff et al, 1992)
Sony's management secret is simply to allow designers
the freedom they need to prove their ideas. And
top management is more than willing to join the
creative fray, an approach that has inspired unparalleled
respect and camaraderie. When designer Teiyu Goto
set to work on the PlayStation, Sony's first video-game
machine, he knew it had to look bold and simple.
So he made the lid for the ROM compartment round
like the disc itself and kept the rest of the
box rectangular-with rounded corners for children.
But the really striking gadget was the handheld
controller. After sandpapering away at plastic
models for months, Goto came up with a radical
new model with handles quite unlike the barbell-shaped
ones used at the time by Nintendo and Sega. Ohga
didn't like the game-player idea much either,
but he supported the imaginative device. Some
managers at Sony did not, so Goto went back to
the drawing board and crafted an array of more
conventional alternatives. But Ohga was willing
to take a risk: he continued to back Goto's radical
vision. When the designer tried it out on 15 children,
they fiddled with it for three hours, and then
gave it a thumbs-up. Goto, a talkative man who
dresses in black turtlenecks and khakis, all but
sobs at the recollection of how his invention
could have been trashed before eventually making
it into millions of homes around the world. Sony's
culture stands out in a country whose manufacturers
were for years derided for copying Western designs
and using them to make cheap, reliable products
of their own.
(The copycat ensitivity at Sony is acute: design
chief Amanuma remembers when a new-look TV was
canceled just as it was about to go into production
because archrival Panasonic had come out with
something similar.) In Japan the corporate tradition
has been about plodding ahead; radical advances
have rarely been encouraged. Sony is the exception.
Editor of the Tokyo magazine Designers' Workshop,
Naoko Hasegawa, said that Sony is a rare phenomenon
in Japan. The heart of the action at Sony is the
"eel's bedroom"-a long, low-ceilinged
room that once contained a radio-assembly line.
Dimly lighted and eerily quiet, except for the
clickety-clack of computer workstations, this
particular corridor of genius houses the kind
of young talent that wouldn't fit in at a more
straitlaced organization. (Takiff et al, 1992)
The Sony creed goes back to the company's origins
in 1946, when a group of engineers led by Ibuka
and Morita founded Tokyo Tsushin Kogyo, or Tokyo
Telecommunications Corp., in a bombed-out department
store. They bought a tiny, battered Datsun truck
for the equivalent of $100, and Ibuka and Morita
made deliveries and went out to buy supplies.
Because the fledgling enterprise didn't have the
muscle to compete with industrial pillars like
Matsushita, the giant that makes the Panasonic
brand, Ibuka and Morita decided the only way to
survive was to be different. The formula at first
was simple: find a new piece of technology, and
then think up a new product for it. Early attempts
flopped. First was an electric rice cooker, a
crude wooden device with a heating element in
the bottom that left the rice soggy or frazzled;
other false starts included a 1950 tape recorder-it
worked, if anyone could figure a use for it. (Hays,
1999)
In 1958, after their redesigned tape recorder
became popular, the two chose a new company name,
Sony, from the Latin word sonus, for sound. It
hinted at where the company's future lay. The
first major breakthrough came when Sony started
using transistors to make radios. (Matami, 1993)
The transistor was invented in the U.S., but Sony
proved the master at fashioning it into products.
In 1957 it produced the first pocket-size radio-and
Japan's first transistor radio for export. In
1960 it came out with an even more radical product-an
all-transistorized television with minimalist
looks and a rounded screen that is now considered
a touchstone of postmodern design. Again, design
and function merged into an electronic epiphany.
(Hays, 1999)
Through the 1960s, rivals would wait and see how
Sony's products fared in the market, then copy
them. In 1979 Sony introduced the Walkman, which,
besides adding a Japanese contribution to the
English language, offered a fresh dimension to
design: no new technology, just the vision of
a new life-style. Morita had seen people lugging
huge radios and tape recorders on their shoulders,
looking uncomfortable and disturbing other people.
His daughter ran upstairs the moment she came
home so she could put a tape in her machine. Ibuka
complained of the weight of the tape recorder
and headphones he carried to listen to music.
As Morita wrote, fatuously that he did not believe
that any amount of market research could have
told them that the Sony Walkman would be successful.
(Hays, 1999)
But in the digital age, technological advances
come so fast to so many companies that Sony is
having a harder time than ever keeping its edge.
And Sony's old visionaries are no longer around.
Morita and Ibuka were already memories in 1995,
when Ohga announced he would take a back seat
as company chairman, leaving the day-to-day running
of the company to Nobuyuki Idei, a former marketing
chief. Idei does not inspire the awe his predecessors
did: he joined Sony out of college and is known
jokingly as the salary man shacho (president).
The question now is whether Sony under Idei can
use digital technology to marry audio and video
that will produce an array of indispensable new
consumer products. Though, Idei may lack his predecessors'
technical prowess, he makes up for it in vision.
He likes to remind colleagues,
"We cannot live by the Walkman alone."
In his two years as Sony president, he has overseen
a host of gist century efforts, from the development
of DVD players to an ambitious plan, announced
last month, to vault Sony into the world of satellite
broadcasting. Despite that expansion, it may be
Sony's traditional strengths-smart marketing and
a knack for meeting consumers' needs-that keep
the company's products on everyone's living-room
shelves. Chief technology officer Minoru Morio
has acknowledged that technology in and of itself
does not make a good business. (Kerschbaumer et
al, 2003)
Other Japanese agree that the key to success in
the digital age is to celebrate technology rather
than hide it away. Masayuki Kurokawa, a noted
designer and architect, has said that the next
era is about the relation between humans and objects.
Designers have to make things humans can love
and that fit in with their lifestyle. Since his
promotion, Idei has provided a series of clues
to the future as envisioned by Sony. He has fired
top management at Columbia TriStar Pictures, the
Hollywood studio that Sony acquired in 1989. But
his biggest directive so far has been to reinvigorate
the company's personal-computer program--the very
operation Idei managed in the early 1980s, when
Sony abandoned it as an also-ran.
Slickly designed in mauve and gray by PlayStation
wizard Goto, with sliding doors to the tower panels
like the doors in old Japanese homes, the Sony
PC differs little from other computers on the
inside, its revolutionary appearance concealing
a rather workaday PC. Executives say they aren't
eyeing the traditional PC market. Instead the
idea is to experiment, because someday PC-like
boxes will fulfill most if not all consumers'
needs. The multimedia computer is a kind of training
program for Sony. (Gay et al, 1997)
Sony has also come out with a dizzying array of
other new digital products. The company's digital
still camera, the Cyber Shot, stores images on
chips, which can be transferred to a VCR or a
personal computer. A new portable head-mounted
video player, the Glasstron, may do for video
what the Walkman did for audio. Rick Doherty of
the En-visioneering Group, a high-tech Sea-ford,
New York, consulting firm has said that it was
the most satisfying [movie] experience he had
ever had. The cinema screen was floating right
in front of him. Sony's biggest gamble is a stake
in Japan Sky Broadcasting, a digital satellite
broadcaster. The idea here is the same as buying
up record companies in the past: to dispense with
worries about whether software providers will
latch on to the new technology. (Schlender et
al, 95)
The new age means designers will need a fresh
set of skills. Working on a graphic interface
for digital satellite TV is Yukiko Okura, a certified
master of shodo, a type of calligraphy in which
dramatic brushstrokes render Japanese characters
in forms that can appear either startling or calm.
She says both interface design and calligraphy
demand a similar equipoise, but she thinks that
shodo is totally analog. Niitsu, for one, confesses
to a sense of crisis as a designer entering the
new age. (Kunii, 2002)
Of course, no one at Sony will talk about its
really new products, like the new-generation PC
the company plans for later this year. Yet Idei
stresses that the company's vision goes far beyond
putting every bit of Sony technology in one box.
Televisions and PCs will remain separate for years,
says Idei. But the margin for creativity in both
such boxes is huge, and there is little doubt
that the future at Sony is still in its designers'
dreams. They have taken one maxim to heart: nothing
that looks back is going to make it to tomorrow.
Sony and Entertainment Productions
Some of the series Sony is producing for prime-time
cable are breaking even the first season and posting
profits as early as the second season. It is pushing
the same envelope for original prime-time series
it produces for the broadcast networks and syndication,
where making ends meet comes with a different
set of challenges. When Sony can execute its way
it generally makes television series for at least
30 percent less than many of its competitors.
It owns all or part of most of the estimated 30
series it produces. One of the best examples of
its success so far is “The Shield,”
which Sony produces in conjunction with Fox Television
Studios for FX for about $1 million per episode.
Sources said that is about $800,000 less per hour
than it might have cost to produce the series
for a major broadcast network that can insist
on high-priced talent on and off camera. Such
caveats to a series pickup can inflate production
costs by as much as $500,000 per episode, high-level
industry sources said. (Kerschbaumer, 2003)
As a result of being able to make what is called
“smart choices,” “The Shield”
will be modestly profitable in its second season.
Overall, analysts estimate Sony's restructured
and streamlined television operations could post
more than $270 million in profits in the fiscal
year ending March 31 on about $1.5 billion in
revenues. That represents a swing of more than
$100 million from the prior year, fueled by an
estimated $70 million in cost savings from last
year's consolidation and increasing program profits,
which should grow at least another $50 million
next season, well-placed sources said. It is said
Sony no longer maintains a contracted roster of
in-house talent that it must support with an endless
stream of mostly failed projects, which is an
industry wide standard that vexes all of its peers.
When possible, it matches the best person to the
job and works to stay within a budget that assumes
little or no deficit financing.
The impetus for doing business this way is simple
but effective: It accelerates the timetable for
all parties to make money even on a modestly successful
project. (Kerschbaumer, 2003)
By comparison, Sony's production of “The
Guardian,” which predates the company's
new business practices, costs closer to $2 million
per episode, reflecting network-mandated talent
and other production costs. With deficit financing
at an estimated $800,000 per season, the series
likely will not see steady profit until syndication.
(Kerschbaumer, 2003)
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