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The acronym Sony has been derived from Sonus, the Greek goddess of sound. It just seems that this Fortune 500 company might just require all the godly help in the coming quarters given the latest financial projections that Sony has churned up! The company is all set to post an operating loss of $2.9 billion. In the current era where there’re innumerable companies posting losses year after year, does this come as a surprise? Umm, yes, if you look at this from the perspective that this is Sony’s first reported yearly operating loss in a huge 14 years. Add to that the gift of a lack lustre business environment and various other factors like intensification of price competition, restructuring charges and deterioration in equity in net income of affiliated companies, and you have the acerbic daughter of miseries ready to take you out on a date. But really, this story is not about Sony globally, but about Sony India, and how their date is lined up with the miseries of economies.
The scenario for Sony in India, one has to accept, is quite contrary to global conditions. Firstly, because the slowdown in India – though seemingly persistent – is finally simply a slowdown and not a recession. And secondly, if you thought that summer is the time for only cola majors to introduce cheeky, new ‘models’ and drinks, then you have no idea what Sony India is up to. Sample this and pop your eyes out. While Sony India saw a thundering growth rate between 20-25% (averaged across various product segments) in the year 2008-09, despite the slowdown their forecasts predict that growth rate will more or less continue to range between the super levels of 15-20% for this coming season. But Masaru Tamagawa, Managing Director of Sony India, is devastatingly honest, “Sony is analysing trends category-wise rather than simply looking at the overall growth. Thus, in FY09, the categories that will continue to grow or shrink will become more obvious.”
But isn’t this akin to painting a glorious Neroistic picture when Rome all around seems to be burning? For starters, what about segments like the consumer audio visual segment, which overall seems to have taken the biggest hit across the industry? Tamagawa reticently accepts and shares detail with us, “Yes, market growth in the segment, which had been approximately 10% in the past few years, might slowdown further.”
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Source : IIPM Editorial, 2009
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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