SONY, panasonic, Hitachi and sharp, Japan’s electronics giant, once in the global dominance of science and technology, every corner of the world have their electronic products. Now, however, apple and samsung with great success in the field of consumer electronics for the Japanese giants in the shade.
the economist magazine that Britain for struggling Japanese electronics giant, if want to reproduce the brilliant, in addition to the new technology and new products of excellent outside, still need a breakthrough in the reform. The following is the main content of the article.
morass of SONY
SONY company is going through a period of mixed at present. On July 1, the company with its VAIO PC brand formally farewell. Since 1996, VAIO computer has won a large number of loyal powder silk, it including the late apple co-founder, Steve jobs, his VAIO extreme praise highly of the peak, and even had to show SONY will apple Mac operating system installed to the desire of VAIO. For VAIO, after leaving SONY VAIO has been struggling, SONY announced in February of this year to sell the business to a Japanese private equity funds, then VAIO market share in Japan plunged to 2% from 10% at the beginning.
so poor performance let SONY ‘frustration, SONY, after all, still hold the equity of a small amount of VAIO. However, relative to VAIO, SONY and more need to worry about a thing, the investors are continuing pressure on company management, hope they take measures as soon as possible to reverse the company’s performance for a long time. In the past six years, SONY has been 5 years of losses, is expected to end in March 2015 for the fiscal year will continue to loss.
is SONY VAIO of stripping many business in recent years is the most important one, and perhaps this is just the beginning of the business restructuring. At the same time, SONY will also once incomparably glorious, but recently the loss-making TV business as an independent legal entity. Currently the CEO of SONY hirai has ruled out selling the television business could, this also caused many people to criticism, he couldn’t take more radical action, but SONY also acknowledged that they could still form a coalition with other television manufacturers.
Japanese electronics giant, collective decline
despite has for years been denied the necessity of depth changes, but also is precisely under this kind of blind optimism, the consumer electronics industry in Japan has been in decline year by year, the global share of the various kinds of electronic products are falling (see chart below). In 1982, we published an article, introduced the “Japan’s electronics giant,” how will with a variety of exciting electronic products continue to conquer the world, such as cameras, fax and CD machine, and so on. Then they did this, at least for a period of time. But now, they plunged into the collective decline, in the most important field of consumer electronics, including South Korea’s samsung and the United States apple rivals played’s door.
the Japanese consumer electronics market is highly prosperous, the electronic products per capita ownership after the United States came second in the world, but even in such a favorable domestic situation, Hitachi, panasonic, sharp, SONY and other manufacturers of the market share keeps shrinking, Japan’s enterprises basically ceding local PC market, its share in the mobile phone market is all the way down (the foreign intelligent mobile phone market share in Japan has reached about 20%), actually they had never take a smartphone could shake market product, although this is by far the most popular electronic products. Think that year, which of SONY TV (Trinitron) and Walkman Walkman has helped Japan created incredible trade surplus, but now they are under the huge trade deficit.
however, bank of America merrill lynch in Tokyo, Japan Katayama, an analyst with the a (Eiichi Katayama) for the status quo has found a reason to comfort themselves: for most businesses, the consumer electronics is a very hard time business dominance is the case, so the industry is very competitive. Now, a strong brand has been difficult to support the high price of products, the company said its second-quarter operating profit is expected this week will be dropped, it will also be the company for a third straight quarterly profits shrinking, the main cause of this phenomenon is combined by millet and apple, with millet despite just founded three years, but using the unique method of “low hunger marketing” rapidly into a mid-range phones in China market, while apple iPhone performance is to let the samsung in the high-end market under pressure.
however, Japanese electronics companies in the past 10 years, made many mistakes is difficult to forgive. They are still as usual the hardware in the first place, and ignore the fast growing software and services (e.g., apple’s iTunes), at the same time also failed to grasp the changing consumer taste. In the Tokyo area consultants at McKinsey wan (Peter Kenevan), said Peter Kenny, Japanese electronics companies in fast-growing emerging markets have been slow to respond, in their eyes, there’s still low cost manufacturing base.
today, Japanese electronics companies face a number of difficult decisions, they need to understand what should give up existing products and the development should focus on what new products and so on. It is reported that SONY executives have repeatedly studied the reform of the philips case, who once used a reform from multiple underperforming areas of business and, last year it had to give up the television business, the future may also selling a majority of the lighting business.
panasonic has begun a massive adjustment in their business. At the new CEO He Yihong (Kazuhiro Tsuga), panasonic abandoned plasma TV and consumer smartphone business, the business development with a focus on the production of the latest energy-saving residential equipment, in addition, the auto parts has become another big growth of panasonic business, including the battery electric and hybrid cars use, etc. Tianjin He Yihong still looking for a variety of ways to better serve the emerging markets in Asia, he said publicly recently panasonic will establish product research center in India, and mainly consists of local staff, which is unique in the history of the development of panasonic.
at the same time, the other Japanese companies including Toshiba and Hitachi are camera reduces the dependence on the consumer electronics business, and started the development emphasis shifting towards heavy industry, these measures will contribute to solving exists in Japan’s electronic business in the field of highly structured problems of overlap, some became involved in high tech electronics giant even surprising new fields such as agriculture, allegedly including, Fujitsu, Hitachi, panasonic and sharp, companies are now transforming abandoned factory site, and by using high-tech greenhouse to grow some vegetables higher price on the market in Japan.
these changes brought about by the economic benefit is gradually showing. Thanks to recent yen, Fujitsu, panasonic and sharp are return to profitability in 2013, other electronics giant profit situation has improved, but SONY and NEC exception. SONY is committed to in fiscal 2015-16 to profitability, the SONY smartphone and tablet business is on track, which with an important innovation that is joined the “waterproof” function of equipment. Although want to take back by apple market is still not too realistic (pictured), but all the signs that the worst or SONY xu has ended, and it can help SONY against American activist investors Daniel Loeb (Daniel Loeb) spin off Suggestions are put forward.
find new growth point of
in the foreseeable future, panasonic, sharp and SONY companies such as a large share and profits will continue to depend on the consumer electronics business. Although tianjin He Yihong has passed various restructuring measures to adjust the development key of panasonic, but industry insiders say he has not yet found reliable growth point. Although there are movies, music, television, and financial services are SONY’s business, but consumer electronics in the total revenue of the share is still as high as 60%.
united want to Japan’s regional director Roderick flattening (Roderick Lappin) said that if the CEO of these Japanese companies are willing to take risks and have vision of the leader, then Japanese electronics companies can completely through more efforts to seek to rejuvenation. Flattening, points out that Japanese companies have unparalleled in the field of engineering technology is still a very obvious advantage, even though it is beyond the scope of ordinary consumer demand, but these companies in the hands of many patents will be in the current popular wearable technology and the Internet of things play a tremendous value, so as long as you can get through this difficult transition period, Japan’s electronics companies still worth looking forward to the future.
unfortunately, Japanese companies mostly trapped in the old corporate culture. Besides the minority people such as tianjin He Yihong, their leader, with an average age of up to 60 years old, most of them are very cautious, conservative and years of losses and restructuring is to let they dare not to pressure on the new field in the future. Specifically, many Japanese companies still be too focused on lifetime employment, in most large Japanese companies, about a third of the staff are actually exceed personnel, but because of Japan’s labor laws and regulations is not clear, so these enterprises to targeted cuts.
shinzo Abe, Japan’s prime minister, is currently promoting the government reform plan may be from a certain extent, revitalize Japan’s labor market, the plan for the electronics industry benign is far greater than any other industry. Once the jobs easier, panasonic, SONY and other Japanese companies financial flexibility will also rise, its ability to cope with the changing market environment will also increase. These enterprises in view of the employee’s voluntary redundancy compensation cost is very high, usually the equivalent of an employee wages of two to three years.
the VAIO acquirers Japan Industrial Partners, President of Hidemi Moue, points out that because of many Japanese companies are no longer governed by the founder of tough, but to a grown up with lifetime employment of professional managers to manage, which will solve the above problem is actually very low. In a word, to make Japanese electronics companies a repeat of the year, it would be hard to rely on a few outstanding new products, the most important thing is to a breakthrough in the mechanism reform.
the translator: Tang Ke
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