vs
UBI - December 2004
Ilker Korkut / Yu Zhang
1
Background & Objectives
History & Background
Sony
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1946 Established in Nihonbashi,Tokyo,named Totsuko, with
start-up capital of YEN190,000 for the research and
manufacture.
1958 Company name changed to Sony Corporation.
1960 Sony Corporation of America established in US
1960 World's first transistor TV, the TV8-301, launched.
1963 World's first compact transistor VTR, PV-100, launched.
1965 World's first home-use VTR,CV-2000, launched.
1968 Trinitron color TV, the KV-1310, launched.
1971 3/4-inch color video cassette player, VP-1100, launched.
1979 First personal headphone Walkman, TPS-L2, launched.
1982 World's first CD player, the CDP-101, launched.
1985 8mm camcorder, the CCD-V8, launched.
1988 CBS Records Inc., the records group of CBS, acquired. It
was renamed Sony Music Entertainment Inc. in January 1991.
1989 Passport-sized 8mm camcorder, CCD-TR55, launched.
1989 Columbia Pictures Entertainment, Inc. acquired. It was
renamed Sony Pictures Entertainment Inc. in August 1991
1993 Sony Computer Entertainment Inc. established.
1994 New company structure introduced at Sony Corporation.
1996 Sony China established
1997 Introduction of Corporate Executive Officer System
2000 "Playstation 2" SCPH-10000 launched
2001 Sony Bank established in Japan
2001 Sony Ericsson Mobile Communications established
2002 Sony Dream World 2002 held in Yokohama
2002 Sony absorbed AIWA by merge
Samsung
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1938 Established.Samsung means “three stars” and resemble the
characters that mean “Let it be large, strong, and last forever.”
1953 a number of subsidiaries began importing manufactured
goods from the West and making domestic fabrics.
1969 Samsung Electronics established to replicate imported
electronics goods for the domestic market.
1974 Samsung moved into heavy industry when it formed Samsung
Petrochemical Co. and Samsung Heavy Industries Company.
1974 Samsung Precision Company (now Samsung Aerospace
Industries) was established .The group became a key player in the
semiconductor industry during the 1980s.
1985 Samsung Data Systems (now Samsung SDS) was
established,
1986 Samsung Economic Research Institute was established.
1987 Samsung Advanced Institute of Technology (SAIT) was
established.
1988-90 SAIT expanded into electronics, semiconductors, high
polymer chemicals, genetic engineering, and the aerospace
industry.
1992 Samsung shifted its strategy away from low-priced bulk copies
of other manufacturers‘ products and set up design offices in the
US and Europe to focus more on the high end of the market.
1977 Samsung acquired Daesung Heavy Industry Company and
renamed it Samsung Ship-Building Company.
1999 Dell and Apple both concluded 5-year deals to purchase
several billion dollars‘ worth of LCD displays from Samsung..
2001 Korean government pressured Samsung abolished the central
management structure and now operates as a group of 27 separate
but interlinked companies without a single parent.
2002 low cost RDRAM became available.
Dia 3
p1
presentation by YU
pc; 4-12-2004
Company overview
Sony
Revenue (mil $)
Samsung
72,081
54,252
13.90 %
9.30 %
851
4,900
13.0 %
15.1 %
162,000
88,447
0.60 %
76.90 %
Brand Equity (rank)
#20 (#21 last year)
#25 (#34 last year)
Brand Equity (mil $)
13,200
10,900
- 5.04 %
31.17 %
Revenue Change (1 yr)
Net Income (mil $)
Net Income Change (1 yr)
Employee
Employee Change (1 yr)
Brand Equity Change (1 yr)
Dia 4
p2
presentation by YU
pc; 4-12-2004
Brand: A strategy on its own
Brand Mapping
2002
Enhanced
Sony
Panasonic
B&O
Denon
Bose
JVC
Technics
Siemens
Philips
Sharp
Pioneer
Generalist
Specialist
Toshiba
Telefunken
LG
Samsung
Grundig
Ordinary
Hitachi
Daewoo
Kenwood
Schneider
Aiwa
Dia 6
p3
presentation by ADEL
pc; 4-12-2004
Brand Mapping
2003
Enhanced
Sony
Panasonic
B&O
AppleDenon
Bose
Nokia
JVC
Canon
Premium Specialists
Technics
Siemens
Philips
Specialists Mainstream
Sharp
Pioneer
Generalist
Specialist
Toshiba
Telefunken
Daewoo
BBK
LG
Samsung
Bush
Medion
Grundig
Ordinary
Hitachi
Local Discount Brands
Trust
Kenwood
Schneider
Aiwa
Dia 7
p4
presentation by ADEL
pc; 4-12-2004
Brand Mapping
2003
Enhanced
Sony
Panasonic
Apple
Nokia
JVC
B&O
Denon
Bose
Canon
Premium Specialists
Technics
Philips
Pioneer
Kenwood
Specialists Mainstream
Samsung
Generalist
Specialist
LG
Sharp
Trust
BBK
Bush
Medion
Ordinary
Local Discount Brands
Aiwa
Dia 8
p5
presentation by ADEL
pc; 4-12-2004
Brand Mapping
2004
Premium Specialists
Enhanced
Sony
Panasonic
Nokia
JVC
Olympus
Technics
Philips
Apple
Nikon
B&O
Denon
Canon
Pioneer
Bose
Loewe
Kenwood
Specialists Mainstream
IT Specialists
Samsung
HP
Generalist
Specialist
LG
Sharp
Local Discount Brands
Tesla
Bush
Medion
Ordinary
APA Specialists
Creative
iRiver
Aiwa
Dia 9
p6
presentation by ADEL
pc; 4-12-2004
Brand Mapping
2004
Premium Specialists
Enhanced
Sony
Panasonic
Apple
Nikon
Nokia
JVC
Olympus
Technics
Philips
B&O
Denon
Canon
Bose
Loewe
Kenwood
Pioneer
Specialists Mainstream
Samsung
IT Specialists
IBM
HP
Dell
Generalist
Specialist
LG
Sharp
APA Specialists
Creative
Local Discount Brands
iRiver
Bush
Medion
Ordinary
Tesla
Aiwa
Dia 10
p7
presentation by ADEL
pc; 4-12-2004
Core Business vs. Strategic Areas
Business Fields
Sony (Product Category)
Electronics
Video Products
Audio Products
Television
Digital Still Camera
Video Camera
Car
Personal Audio (MP3)
Information Technology
Computer
Displays
PDA
Recording Media
Optical Storage
Telecommunication
Cell(mobile) Phones
Semiconductor
Entertainment
Gaming Console
Movies (Sony Pictures)
Music (Sony Music)
E-commerce (Sony Style)
Personal Robot (Aibo)
Broadcasting
Finance or Banking *(JAPAN ONLY)
Life Insurance *(JAPAN ONLY)
Internet Service Provider
Samsung (Product Category)c1
Electronics
Video Products
Audio Products
Television
Digital Still Camera
Video Camera
Personal Audio (Mp3)
Set-top boxes
Information Technology
Computer
Displays
PDA
Printer
Telecommunication Network
home network systems
mobile phones
infrastructures
office network systems
Digital Appliance
air conditioners
microwave ovens
refrigerators
vacuum cleaners
washing machines
Semiconductor
CMOS image sensors
DRAMs, flash memory, hard disk
drives, LCD driver ICs, MCPs,
optical disk drives, smart cards,
SOCs and SRAMs
Dia 12
c1
Insert - Ilker - 30/11/04
p8
presentation by ILKER
compaq; 30-11-2004
pc; 4-12-2004
Strategic Fields
Television
Mobile Phone
Samsung - Sony
Gaming
Semiconductor
Music
IT
Dia 13
p9
presentation by ILKER
pc; 4-12-2004
Future?
Numeric Convergence
or Digital Entertainment
2004-2009
Television
Mobile Phone
Samsung - Sony
Gaming
Music
IT
Semiconductor
Dia 14
p10
presentation by ILKER
pc; 4-12-2004
Product Categories
Brand Mapping
Home Entertainment/TV
Premium TV
Loewe
„ In the brand mapping we see a
Enhanced
general shift of brands towards the
top right hand corner
B&O
Sony
Panasonic
Philips
Bose
Denon
harman/
kardon
Premium Audio
Pioneer
United
Local Discount
Ordinary
Mainstream Specialists
LG
Medion
Special competence
in category
Kenwood
Samsung
Brand also offers
products in category
JVC
Thomson
TV Analysis
Key Questions
2004
2005
2006
Samsung
Key Questions
• TV sets: Flat panel TV transition
• Digital Television and HDTV
Sony
Sony, Toshiba and Matsushita all
plan to stop CRT production in Japan
during 2004.
2007
TV Technology Evolution
C T V M a r k e t R e p o rt W o r ld w id e (O c to b e r 2 0 0 4 )
40000
35000
30000
LCD
S a l e s (0 0 0 s )
25000
P la s m a
R e a r P ro j
20000
F ro n t P ro j
L -C R T
15000
S -C R T
10000
5000
0
2002
2003
2004
2005
2006
2007
2008
F o r e c a st
« There are numerous signs that the flat panel TV is finally becoming the mass market consumer
electronics product which will transform the industry and lead to annual global revenues of $41bn
by 2008 »
Source: Strategy Analytics Insight 2003
Plasma
Global Production
PDP (plasma display
panel) module
market is dominated
by 5 major suppliers
accounting for 97%
of capacity.
Samsung SDI remained the world’s top PDP (plasma display panel) supplier in the third quarter of
this year ... shipped 216,700 PDPs in the third quarter, up 16% sequentially, and its market
sharerose from 22.8% in the second quarter to 24.1% in the third quarter.
Source: market research firm DisplayBank
Fujitsu-Hitachi Plasma Display (FHP)
LCD
Q1 FY04 Global Production
BOE Hydis
2.1%
CPT
Fujitsu0.8% Others
Hitachi
1.9%
1.6%
TMDisplay3.8%
4.3%
LG.Philips
23.8%
AU Optronics
9.1%
Chi Mei
12.3%
Samsung
16.6%
Sharp
23.6%
Chi Mei Optoelectronics (CMO) is likely to overtake Sharp and become the world’s
leading above-20-inch LCD-TV panel supplier in the fourth quarter of this year,
according to the Chinese-language Economic Daily News (EDN).
Samsung
Electronics Co.,
South Korea's
biggest electronics
manufacturer,
cemented its top spot
in worldwide TFTLCD shipments this
year, by shipping
53.93 million TFTLCD panels (In the
nine months to
September), way
ahead of rivals
LG.Philips LCD Co.
and AU Optronics
Corp. of Taiwan.
Source:
DisplaySearch
Globally the two Korean firms LG and Samsung have more than 50 per cent of the total LCD production capacity.
LG Philips LCD is a 50-50 joint venture between South Korea's LG Electronics and Dutch conglomerate Philips
Corp Strategies
Samsung
Manufacturers are diverting resources to support
increasing global demand
• Matsushita is spending Y400m ($3.3m) retooling its plant
at Pilsen in the Czech Republic to produce 200,000 plasma
TVs a year for the EU market. It is currently also evaluating
North American production. It plans to produce four million
FPTVs annually by 2005.
• Sharp will cease CRT TV production at its Spanish plant
next year, replacing it with capacity to product 500,000 LCD
TVs a year. It will also increase LCD TV production in
Mexico and China.
• Hitachi will produce plasma TVs in China and Mexico. It
will use a Turkish manufacturer to supply the European
market.
• LG.Philips LCD Co. has approved plans to invest 5.0
billion dollars in its 7th-generation LCD manufacturing plant
in Paju, north of Seoul.
Sony
Sony and Samsung will form a $2bn 50-50
joint venture « S-LCD » in Q104 to produce
7th-generation LCD panels in Korea. Sony
already manufactures LCD TVs in Japan,
Spain, Mexico and China.
The race to Digital TV
W o rld w id e T V H o u s e h o ld s b y ty p e
800
700
600
A n a lo g S a t e llit e
500
A n a lo g C a b le
A n a lo g T e rre s t ria l
400
G lo b a l S e t-T o p B o x S h ip m e n ts
D ig it a l S a t e llit e
D ig it a l C a n le
300
35000
A n a lo g S a t e llit e
200
30000
100
25000
0
2002
2003
2004
2005
2006
2007
U n i ts ( 0 0 0 s )
2001
20000
c a b le s a t
t e rre s t ria l
15000
s a t e llit e
10000
5000
0
2001
2002
2003
2004
2005
2006
2007
Set-Top Box Semiconductor
The race to Digital
Content
TV
Total semiconductor revenues from set-top box applications were estimated to have fallen by 15.5% in 2002, by
a further 4.4% in 2003, to $3.74 billion.
For the remainder of the forecast period, the total semiconductor revenues are forecast to grow slightly,
to reach $3.88 billion by 2007.
Only Flash and DRAM memory are forecast to have a positive CAGR, as the increases in memory
requirements offset the declines in price.
TV Strategy
Sony
• Conclusions:
– CRT is over (past) -- > Sony to stop production
– Flat will be commodity
• PFM short term growth till 2006
• LCD long term growth -- > Alliance
– Digital is the future
• Set top box usage
• Semi conductor required
Samsung
IT Analysis
Shipments of PDAs and similar handheld devices declined for
the third consecutive quarter, according to the latest data from
IDC. Third-quarter global PDA shipments fell 8.7 percent
compared to the same period last year. Competition from
smartphones is to blame, the research firm says
With slower growth rates and reduced profit margins, the PC
industry will face vendor consolidation, with three of the top
10 PC manufacturers exiting the market by 2007, according to
Gartner
Notebook computer sales have doubled since 1998, from 3.6
million to 7.2 million, according to IDC. They now represent
23.8 percent of total computer sales, and IDC has predicted
that percentage will increase as corporate spending rebounds.
Key Questions
IT
A hardware story
Samsung
The Samsung YH-999 Windows
Mobile™- based Portable Media Device is a
revolutionary handheld entertainment device
that makes it easy to store and play recorded
TV, movies, home videos, music and photos
transferred from a PC with Windows® XP. You
can watch and listen to your favorite
entertainment anytime and anywhere - in the
palm of your hand or through a TV or stereo.
Store and play up to 80 hours of video, up to
5000 songs or tens of thousands of pictures.
No PDA
VAIO Pocket™ Digital Music
Player
This year, Sony decided to pull back from the
international PDA market to focus on Japan. Sony had
long occupied the third position in the global PDA
market, but its shipments fell by 81.5 percent in the third
quarter. Despite this decline, Sony is still one of the top
five vendors worldwide, in fifth position, according to
IDC.
Sony
VAIO Pocket™ Digital Media
Player
IT
All in One story
Samsung
No Desktops
Next year, Sony will porbably pull
back from the desktop PC market to
focus on „all-in-one“ PC segment.
Sony
IT
Notebook Booming category
Leading notebook vendors: 2003-2005 notebook shipments (million units)
Vendor
2003 shipments
2004 projected
shipments
2005 projected
shipments
Major contract makers
Volume
Market share
Volume
Market share
Volume
Market share
Dell
5.95
15.3%
8.50-9.00
18.7%
11.00-12.00
21.1%
Quanta, Compal, Wistron and Samsung Electronics
HP
6.50
16.7%
8.00-8.50
17.7%
11.00-12.00
21.1%
Compal, Inventec, Quanta, Wistron and Arima Computer
Toshiba
4.90
12.6%
5.00
10.4%
6.00
10.5%
Compal, Inventec and Quanta
IBM
3.45
8.8%
4.00-4.50
9.4%
5.50-6.00
10.5%
Wistron and Quanta
Acer
2.00
5.1%
3.20-3.50
7.3%
5.00-6.00
10.5%
Quanta, Wistron and Compal
Source: Taiwan makers and IDC, compiled by DigiTimes, November 2004.
Samsung
Sony
IT
The PC Market War Heats Up
Sony and IBM have introduced
the first workstation based on
the Cell processor, which they
jointly developed in
partnership with Toshiba. The
Cell processor is designed to
take advantage of high-speed
broadband network access for
applications in digital media
content creation
IBM will begin pilot production of Cell microprocessors at its 300mm wafer fabrication facility in the
first half of 2005. Sony expects to launch home servers for broadband content as well as highdefinition television (HDTV) systems powered by Cell in 2006. Sony also is preparing the nextgeneration PlayStation 3 system that will run on Cell.
Brand Mapping
IT
The Individualists
Enhanced
Sony
Vaio
Apple
IBM
HP
Work Brands
Special competence
in category
Value for Money
Brands
Brand also offers
products in category
Toshiba
Dell
LG
Medion
Ordinary
Samsung
Acer
Mobile Phone
The 3G Effects
Sony
It produces a range of mobile phone handsets and offers
professional communications solutions such as
smartphones with corporate communications capabilities.
Samsung
2003 $11,856.5 million in sales and $2,257.4 million in
operating profits.(Multimedia,PDA,GSM,CDMA,satellite
receiver,VOD phone,
Number 5 in the world(2002)
5.2% (2002)
Number 2 in the world (2003)
CDMA Mobile Phone 23% 1 st (2003)
Mobile Phone
10% 3 th (2003)
Before Ericsson – After Ericsson
Intends to earn world leadership and secure overwhelming
competitive strength in this area.
Continue to invest in R&D and by increasing design power,
improve procurement and enhance quality and productivity.
The integration of creativity and design make its mobile
products acceptable.It also set itself the goal of being a
pioneer in the integration of new technology in the phones.
Dia 31
p20
presentation by YU - Mobile Phones
pc; 4-12-2004
Gaming
Console – PC – Mobile war
Sony
Sales: Playstation1 and Playstation2. Very popular in the
world.Holding the 75% marketing share in this area. The
games division, anchored by the PlayStation 2, produced 10
percent of revenue and $650 million in profit.
Samsung
NON -till now.But in the future… ...
Vision: Digital TVs, movies, music, game and digital contents
will be the core future businesses for Sony.
Sony will introduce the PSP, a portable PlayStation, in Japan
at the end of this year and in the U.S. and Europe early in
2005. The console will play music videos and games and will
compete with Nintendo Co.’s Game Boy.
PSX is to be released, was used as an example. the soupedup version of the PlayStation 2 offers games, DVD, TIVO, and
CD/DVD burning capabilities as well as the ability to download
media from the Web and access content from Sony's memory
sticks. In this manner.
Objectives: Sony aims to integrate its game and electronics
technology to compete at a different level than the competition.
Furthermore Sony will hold the whole market of game console
and portable game market.
Key Questions
• What dynamics are governing the evolution of the game industry?
• What is driving industry revenues through the remainder of the hardware cycle?
• How large will emerging distribution opportunities be?
• How are economics changing over the platform cycle?
Dia 32
p21
presentation by YU - Games
pc; 4-12-2004
Gaming
Console – PC – Mobile war
Last Full Fiscal Year
Company
Home Game
Business Revenue
Previous Year
Revenue
Game Revenue
Change From
Previous Year
Sony
$7,093
$8,682
-18%
Nintendo
$4,680
$4,582
2%
Electronic Arts
$2,957
$2,482
19%
Microsoft*
$2,876
$2,748
5%
Take-Two Interactive**
$1,145
$1,034
11%
Activision
$948
$864
10%
Atari
$844
$1,190
-29%
Konami
$841
$795
6%
Vivendi Universal
$688
$957
-28%
THQ
$641
$468
37%
UbiSoft
$612
$546
12%
Sega Sammy***
$599
$675
-11%
Square-Enix
$575
$565
2%
Namco
$407
$386
5%
Capcom
$308
$437
-30%
$25,580
$26,909
-5%
Total Game Sales
Dia 33
p42
presentation by YU - Games
pc; 4-12-2004
Music
Digital distribution
Hardware
Software (Online music stores)
iPod (Apple)
iTunes (Apple)
Vaio Pocket (Sony)
Connect (Sony)
Samsung’s digital audio products
Napster
Sony
Samsung
Intention to beat Apple’s iPod
Sony came with Vaio Pocket almost 2.5 years after Apple.
The executives were so concerned about music piracy, they
could not agree with the designers on the kind of player to create.
Collaboration with Napster (No software available of its
own)
Intention to beat Apple’s iTunes
Sony came with Connect almost 1 year after Apple.
Napster’s brand awareness is an advantage, however
its legality is a question
Using a different file standard (attract) which is not mp3
An advantage?
Co-promotion with Napster
Music and music video from Sony’s own EMI, Columbia and Epic
Feature-length films from Columbia via Connect (next year)
Key Points
• Increase of music piracy, P2P (Napster, KaZaA), Standards (MP3, MP4, AAC)
• Will Sony’s Connect succeed to cope with Apple? Why was Sony late to react? Unlike Apple, Sony has a giant media arm with a
global presence in movies, music and television. "So why didn't [Sony] do iTunes
• High-speed internet connections become more and more common
Dia 34
p22
presentation by Ilker - Music
pc; 4-12-2004
Semiconductor
Sony
Nano-tech
Samsung
Sony regards the semiconductor business as one of its most
important R&D priorities
"One of the strategies is to deploy the development of
chips into the consumer electronics products to make it
different from the competitors,"
In the short and medium terms, central R&D themes will
concentrate on functional components, particularly CCDs, where
Sony holds the number one worldwide market share, and
semiconductor lasers
Number one worldwide in flash memory.
Number one worldwide in DRAMs and SRAMs.
Number one worldwide in LDI (LCD Driver ICs) for two
consecutive years.
Another priority is System-on-Chip (SoC) components, which
integrate an enormous number of processors and memories.
Components incorporating these technologies play a central role in
enabling Sony to supply highly distinctive digital consumer
electronics and game products with increasingly sophisticated
functions.
Working together enables one division to take advantage
of the strength of the other. "One of the strategies is to
deploy the development of chips into the consumer
electronics products to make it different from the
competitors,"
This year Sony intends to spend $1.8 billion to develop microchips
for household devices that will receive, record and play music,
video and other content without the use of a computer. The new
microchips will reduce the $10 billion a year that Sony spends on
semiconductors from outside vendors.
Samsung uses its knowledge of chips to design more
competitive electronics products which use these chips.
Key Points
• In electronics, added value has migrated from finished products to key components.
• The business is capital-intensive, yet the demand for technological upgrades is constant. As such, no sooner had semiconductor
companies recovered their investment in one level of technology, than new investments in a higher level were required.
• Global semiconductor market to fall 2% in 2005
Dia 35
p23
presentation by Ilker - Semiconductor
pc; 4-12-2004
Competitive Context
Competitive Fact Sheet
Sony
Mission
Solidifying Sony as the Strongest Consumer Brand
through the Convergence of Electronics and Content
“Sony products are enablers. They allow consumers
to immerse themselves in whatever form of
entertainment and communication takes their fancy.
Vision
Sony is about freedom, no limits, empowerment,
innovation, imagination, autonomy, creativity and
choice”.
Objectives
•Solidify Sony’s number one position in AV products
•Create an entirely new category through the
combination of Electronics and Game
•Heighten Sony’s stature in IT and communications
•Become even stronger in the semiconductor field
•Focusing on Profitability
Samsung
Mission of SAMSUNG Electronics is "Digital - ε
Company”. A company that leads the digital
Convergence Revolution through Innovative Digital
Products & - ε Process ”
Leading the Digital Convergence Revolution
“to make everyone's life more convenient, abundant
and more enjoyable through the development of
innovative and multi-functional products.”
Core slogan: "SAMSUNG DIGITall, everyone's invited"
•To be globally-focused, restructured and streamlined,
and more committed than ever to true innovation.
•To be market leader in all its product segments by
2005 and to be the most profitable of all its peers
•Shareholder value would be adequately served if we
pursue the course of long-term profit maximization.
Dia 37
p24
presentation by YU
pc; 4-12-2004
p32
Growth
Strategy
Research &
Development
Global
Presence
Competitive
Assessment
Organizational
Operations
Structure
Market
Image
Dia 38
p32
presentation by YU
pc; 4-12-2004
Growth Strategy
Sony
“Sony’s strategy is based on continuous innovation, creating
new audio, video, communications and IT products for both
the consumer and professional markets and with its music,
pictures, game and on-line businesses it is positioning itself to
become a leading personal broadband network company.
Continue to Promote Electronics Convergence Strategy
Converge technology and resources in home and
mobile electronics
Invest in semiconductors and key devices as core
engines for differentiation and added value
Strengthen operations (Demand & Supply Chain
Management)
Implement Structural Reform Program
Cut workers (13%)
Reduce factory capacity by closing plants (30%)
Hire new executives
Increase profit margins (10% by 2006)
Enhance Entertainment Business
Further Promote Group Management
Products and accessories that are not interchangeable with
non-Sony equipment (strategic brilliance?)
Samsung
Samsung's main business now is electronics - it is the
world's leading manufacturer of memory chips, and
produces a wide variety of products including mobile
phones, televisions, microwaves and computers.
Business Structure Innovation
Business Portfolio
- Stand alone → Total solution provider
• Strategic Business Synergies
- Home, Mobile, Office Network
and Core components
• New Growth Engine
-LCD TV, Mobile Multi-media
Management Process Enhancement
Market Driven Change
Brand equity enhancement
Dia 39
p29
presentation by YU
pc; 4-12-2004
Global Presence
Sony
Samsung
Selling 14 product categories in more than 200 countries (so
many combinations of product category-country)
Selling products in more than 200 countries
Strengthen global leadership via segmentation regionally
Electronic Sales by Area
Japan: 23% (-5%)
Europe: 26% (+11%)
USA: 24% (-9%)
Other: 27% (+21%)
North America
Increase GSM Shipment to Cingular, AT&T,
T-Mobile
High/Mid-end Camera & PDA
Europe
Bar Type Camera & Color
Focus Eastern Europe / CIS
China
Premium Camera & Color
Maintain High Brand Image
Expand Distribution Channel
Dia 40
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presentation by YU
pc; 4-12-2004
Market Image
Sony
Samsung
“Sony brands symbolizes quality, reliability, attractiveness, and
innovation throughout the world.
“Holistic brand campaign” strategy to reposition the brand in
consumers’ minds
Positive brand image due to customer experience (people
already used and liked it)
To develop brand recognition, performs aggressive marketing
campaigns especially in North America and Europe
Advertising expenses: $1,500 M (#10 worldwide)
Advertising expenses: $500 M (#54 worldwide)
UEFA Sponsor (Champions Leaugue)
The attention to entertainment marketing is seen as a way to
“enhance brand familiarity.”
Product placement in movies such as the The Matrix: Reloaded,
Olympic Games Sponsorship (Sydney 2002, Athens 2004)
Sony is busy transforming itself into a “personal broadband
network solutions company.” Its intent is to bring together
hardware, content and services into a seamless entertainment
experience for consumers, which is delivered through a
“ubiquitous value network.”
As a PR, Samsung works with the Boomer Esiason Foundation
to extend the lives of children with Cystic Fibrosis in the US.
Dia 41
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Consumer Preference
by Product Category
Consumer Preference (%)
15,4
12,8
Sony
12,8
Samsung
7,7
5,1
5,1
2,6
TV
DVD Player
2,6
Stereo
2,6
Entertainment
Center
2,6
Wireless
Phone
Source: al berrios & co. Sony vs. Samsung Consumer Preference Micro-Study Jan 04
2,6
General
Electronics
2,6
Computer
2,6
Playstation
2,6
CD Player
2,6
Audio
Dia 42
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presentation?
pc; 4-12-2004
Operations
Sony
Sony’s operations are not efficient which in turn results
in higher product costs. (vital competitive disadvantage)
Cutting fixed costs through resource management
Reduction of personnel in high cost-impact
regions (Japan, North America, Western Europe)
Shift of personnel resources to growth areas,
optimal global personnel deployment
Rationalization of production / distribution / service
centers
10% reduction of production / distribution /
service points and space (2003)
Samsung
Operationally, Samsung is one of the best managed
companies which makes them a profit leader
Management Process Enhancement
Supply Chain Management
Core Technology
- Nano, F/P/M-RAM, 12”, Gen 7
Supply Chain Management
Integration & Synchronization
Component standardization
-(focus on economy of scale, quality, lead time)
Strategic procurement of materials
Reducing number of suppliers
Strategic procurement of parts
Business Portfolio Restructuring
Strategic procurement of non-production materials
Rationalization of operations resulting in reduced
costs for general purchasing. Projected saving ¥50
billion (FY2004)
Business Process Innovation
Design
Convergence
Networking
Speed
Simplicity
Dia 43
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presentation by Ilker
pc; 4-12-2004
Organizational Structure
Sony
In the past, Sony had been ruled autocratically.
Managers derived authority from their relationships to the
founders. It was a family business.
Transforming is more difficult because people do not want
to change their jobs or their lifestyles.
Sony’s delay in jumping into flat-panel TVs and DVD
recorders are two examples of that inertia.
Group management, high level of bureaucracies
Samsung
Highly centralized command-control system. Decision
making and control performed centrally (typical Asian)
Because Samsung is a relatively young company, people are
more open to transformation and changes.
Move from Geographic model towards global category
teams.
Promoting to upper levels depends heavily on seniority
Organizational Structure
Dia 44
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presentation by Ilker
pc; 4-12-2004
Research
and Development
Research
and Development
Sony
Samsung
R&D Investment: $ 4,400 M (7.5% of sales).
R&D Investment: $ 2,900 M (8% of sales).
Creator of the first :
transistor radio, battery-powered TV,
the CD payer, the PlayStation game console
In the last four years, Samsung was first to introduce Flat
Panels, first with LCDs and first with DLP Projection sets.
Made similar advances with Mobile Phones, PDAs and
Notebook PCs.
Sony is focusing on semiconductors, displays and home
servers as its key strategic fields for R&D over the next
three years
Last year, Chip Development Team came up with 2 new
breakthrough products:
the world’s first 70nm 4GB NAND Flash Memory and an
80nm DRAM.
Long-term research fields:
The shift from inorganic to organic materials
Imitating living organisms and brain functions
In 2004, Samsung won 5 design awards at the IDEA
(Industrial Design Excellence Awards) – more than any other
company
Sony and Samsung embark on a Joint Venture making
amorphous silicon LCDs. S-LCD Corp. will produce
seventh-generation LCD panels for large TVs.
Collaboration with MIT’s Renowned Media Lab with the
goal of Ubiquitous Computing
Sony together with IBM and Toshiba developed
semiconductor called ‘Cell’. (it will run PS3 as well)
Dia 45
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presentation by Ilker
pc; 4-12-2004
p35
Growth
Strategy
Research &
Development
Global
Presence
Competitive
Assessment
Organizational
Operations
Structure
Market
Image
Dia 46
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presentation by Ilker
pc; 4-12-2004
Competitive Analysis
Consumer Preference
by Reasons
Future purchase power groups
SWOT Analysis
Sony
Strengths
•Branding and sub branding
•Music industry
•Entertainment industry
•Alliances
Samsung
•Technology drive
•Prospecting industries: LCD,
Semiconductor, Telecom
•Strategic collaborations
•Efficient operations and price
Weaknesses
•Technology drive
•Speed of reaction
•Organizational Structure
•No Profit transfer
•Flexibility
Opportunities
•BluRay vs HD-DVD
•Convergence race
•Semiconductors
•Gaming industry
•Music industry
Alliances or Acquisition
•Fast moving industry
•Chinese brands
•Korean competition (Gov Invest)
•Chinese brands like Konka, TCL,
Ningbo Bird, Lenovo
Threats
•Brand differentiation
•Lack of proven past success
•Lack of customers’ experience
Dia 50
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presentation by ADEL
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Conclusions & Recommendation
Where to invest?
Competitive Positioning
20
Telecom
Semiconductor
Sales $ (billion)
15
LCD
10
Video
TV
Digital
Media
Game
Audio
Music5
SAMSUNG MAKES THINGS HAPPEN
Components
Telecom
SONY WATCHES THINGS HAPPEN
Semiconductor
Appliances
0
-20%
0%
20%
40%
60%
-5
Annual Growth/Fall (%)
80%
100%
Sony
120%
Samsung
Dia 52
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presentation by ALL
pc; 4-12-2004
Questions