SONY VS SAMSUNG - Claire Caudron Evan Wong(z3374153 SONY VS...

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Claire Caudron & Evan Wong (z3374153) SONY VS. SAMSUNG: The Inside Story of the Electronics Giants’ Battle for Global Supremacy Introduction The case deals with the fall of Sony and the rise of Samsung Electronics. Sony was considered as the world’s best electronics manufacturer: it was a global company that earned its position of strength over the years thanks to a defined business strategy. But year 2002 was a turning point in the electronics industry: for the first time, Sony’s market capitalization fell below Samsung Electronics’ one and by 2006 its market capitalization was twice Sony’s one. The best evidence of these 2 trends is the changing perception of Samsung Electronics by Sony’s top management: - 2002: Sony is a model for their brand image – “they learned from us” - 2003: inquired about what Samsung is doing every week - 2006: Samsung is a first rate company First Samsung is seen as not more than a supplier but then Sony began to perceive the Korean company as a potential threat and finally considered it as its competitor. The press even suggested that Sony should from learn from Samsung’s rise… Author’s aim here is to understand this reversal: according to him, Sony and Samsung should be compared on their structures, technology, brands, organizations and management system in order to get why they met two different fates during the last decade. I. First, the author looks at the history of the two companies 1) Sony began as a start-up in 1946 with only 20 employees and an investment of 190.000 yen. It was created by Ibuka Masaru, a talented inventor and by Akio Morita who fulfill the manager role. By the time, the company was manufacturing anything in order to survive from vacuum tubes to rice cookers. It finally started to develop in the early 1950s, when the company obtained the license to produce transistors and in 1955 1
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Claire Caudron & Evan Wong (z3374153) Sony commercialize the first transistor radio which became a huge hit overseas. In 1958, the company changed its name to Sony: combination of the Latin word sonus (sound) and sunny boy (nickname for young men with creative and free spirit). Then Sony expanded into different business areas: The king of audiovisual : - 1960s: developed Trinitron tech > upgraded the quality of color TV + Cathode Ray Tube TV - 1979 :its biggest success the Walkman (compact cassette tape player) - Late 90s: released WEGA > applied digital tech to flat- screen CRT TV >dominant player in high-quality TV market - 2005: Sony, Philips and Samsung competed in LCD TV sector and digital camera sector Entertainment: Morita believed that electronics hardware and software content such as film or music were complementary - Joint venture with CBS records in 1968 + acquired the remaining shares in 1988 > became Sony Music Entertainment, Sony BMG since 2004 - 1989 : acquisition of Columbia Pictures > Sony Pictures Entertainment - Sony’s Betamax format did not appeal the market, dominated by VHS format > finally gave up in 1988 and began to produce VHS recorders just behind Universal in the music industry/biggest film company in the world
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