Sony Corp announced June 26, 2008, its mid-term corporate strategy for fiscal 2008 to 2010.
Based on the company's belief that the largest growth opportunities exist outside the traditional markets (Japan, North America and Europe), it will focus on the BRIC countries, namely Brazil, Russia, India and China, which are continuing their rapid growth, Chairman and CEO Howard Stringer said.
Sony plans to double its core electronics business sales in these countries from ¥600 billion (US$5,644 billion) in fiscal 2007 to ¥1.2 trillion in fiscal 2010.
In the new mid-term corporate strategy, (A) the enhancement of core businesses, (B) the provision of network connection services and (C) business expansion in emerging countries including BRICs were indicated as the company's priority measures. The company's specific goals were as follows.
(1) Expand its PC, Blu-ray Disc-related products and semiconductor/component businesses into trillion yen businesses. Combined with four others (LCD TV, digital imaging, game and mobile phone businesses) that have already surpassed ¥1 trillion, Sony will raise the total number of its trillion yen businesses to seven.
(2) Ensure that 90% of its product categories will support built-in network capability and wireless communications by fiscal 2010.
(3) Roll out video delivery services across key Sony products, starting [with launch of products] on PlayStation Network in the summer of 2008.
(4) Boost annual sales in BRICs to ¥2 trillion by the end of FY2010. (As mentioned above, the electronics business will account for 60% of the ¥2 trillion.)
In general, its existing businesses were expected to support Sony's growth over the next three years. The company did not say much about products and businesses that can create new markets. Sony seems to be intending to strengthen the added value of its products by fortifying the convenience of existing products, including network connectivity, as well as by adding service functions.
The company is likely to exhibit significant growth with its businesses in BRICs. "As our markets in these countries are growing rapidly, we will strive to further increase the volume of our sales there," said Ryoji Chubachi, president and electronics CEO. For this purpose, Sony will strengthen its brand across the Sony Group and operate marketing activities through FIFA and other sponsorships, in addition to investment to fortify marketing power including human resources.
Unlike the previous mid-term corporate strategy plan, the company did not indicate any specific goals for operating margin this time. "To continue to lead the industry and continue to innovate, a 5% operating margin is the baseline of profitability," Sony's EVP and CFO Nobuyuki Oneda explained.
Instead, the company announced it will target an annual return on equity (ROE) of 10% by fiscal 2010. Although it did not reveal its sales goal, either, "We would like to mark sales of ¥10 trillion as early as possible," Oneda concluded.
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