Sony: Now Moody's downgrade too.

[Reasonable]

kowenicki said:

Reasonable said:
Not a surprise and mostly deserved. Sony are a company that arguably got itself into two many areas of operation and lost focus to less diversified competitors, particularly when the economic crisis hit.

Now they just seem at a loss how to proceed despite having a lot of good core assets and a decent brand to work with.

They do now seem to have somewhat of a startegy... to shrink.. but this is in direct contradiction with their other aim of better synergy in the style of Apple.

I see they are now starting to move manufacturing abroad to get away from the ever-present Yen issue (bit of a double edged sword that one though - quality may suffer?) and they are reducing their product lines.

BUT... then they go and persist with TV's (lost cause) and buy up Sony eric.  Problem is they do need to be in all markets for theit new synery stratgey.... but they just cant afford it.  It is very difficult to downsize a massive corporation like Sony and not risk marketshare and brand.

I see them more reacting to stablize thnt having any clear way forward just yet.  They're cutting costs and slimming down, which makes sense overall but I agree how they transition during this to a clear operating model is the big risk (and challenge).  Sony arguably remain well placed to take advatange of global trends for social media and access to content/information via devices but I feel they got caught up in the hardware only side for too long - as evidenced by their strategy with PS3 for example - and are only more recently have they shown signs of getting their act together in terms of how to exploit the market and remain relevant.

It's ironic, for example, to see MS carefully executing to an "entertainment hub" message which Sony actually launched the PS3 with but seemed unclear how to proceed to make it a reality.  Strictly speaking, just looking at consoles, Sony launched with the console ready to offer the broadest entertainment hub coverage from physical to digital media but they were really slow to react and didn't have a strong execution strategy.

I do feel part of the problem - reading between the lines of some public comments - has been too little synergy between divisions and operations and too little input from their key Western based staff on what was going on in US/UK and similar markets.

We'll see if the newly emerging team can turn things around - but they've got a battle on their hands to do so.