How do you fix Sony (SNE)?
The Times (UK) reports that we’ll soon see a radical restructuring of the firm with “a series of ‘sacred cow-slaying’ measures [analysts] believe will abolish or fundamentally alter many of Sony’s long-established business practices.” That’s on top the personnel cuts of 8,000 and 30% divestment from Sony’s electronics business announced just last month.
The thrust of the Times’ story was that Sir Howard Stringer, the British (and first non-Japanese) CEO of the company, needs to be “given free rein to take on the company’s old guard” and overcome “a clear internal cultural clash between Japanese Sony and its US and European operations.”
No argument here. A CEO without the power to make tough choices in the best interest of a company and its shareholders is no CEO at all.
But while consolidating plants and redrawing org charts may seem to be “sacred-cow slaying” in Sony’s boardroom, here’s some more Sony “sacred cows” we’d like to see slayed:
- Price cuts to the PS3. We understand Sony needed to deny there might ever be a PS3 price drop ahead of the Christmas season, lest it deter sales. But the holidays are behind us and Sony needs aggressive pricing to keep the PS3 relevant in 2009.
- A ground-up overhaul of coordination between Sony’s divisions. Apple’s (AAPL) iPhone does music, games, cell service, and e-reading. Sony dabbles in all of these areas, but as far as we can see Sony’s units act like independent, non-cooperating fiefdoms.
- Cut unproductive product lines. Units like the Sony Walkman Video MP3 player seem like nothing more than nostalgic odes to Sony’s faded dominance in portable music. Either compete to win or don’t compete at all.
- Turn the PS3 into a content-delivery vehicle AND go one better and also partner with other sites as Microsoft’s (MSFT) Xbox does with Netflix (NFLX). Sony needs to realise its PS3 opportunity is having a high-performance network device attached to millions of TVs–not Blu-ray, which is gravy.
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