A Comparative Study of Company Portfolios Between Samsung and Sony

ABSTRACT

A company portfolio is a way companies showcase their abilities and strengths. The portfolio is a collection of the values, products, services, objectives and achievements of the company. The purpose of a company portfolio is to show how the firm differs from its competitors and also to attract more customers. The portfolio is also used as a business strategy to show the growth of the company to attract potential investors and shareholders.

Tokyo-based Sony was once the leading company in the ever-changing industry market, with a brand image synonymous with “cool” and with products that were a technological “must-have”. Today, Sony is fighting for its survival against the likes of Korea’s Samsung Electronics, a late starter and technologically unqualified competitor, that came to become a world leader.

INTRODUCTION

The electronics industry is one of the most fast growing and dynamic markets nowadays. Since every day new technologies are launched, the life cycle of electronic products has decreased dramatically. Companies are in a permanent search for innovation and originality in order to gain competitive advantages, that will strengthen and position the business better within the business environment. Sony and Samsung Electronics are two of the most well known companies in the industry. With two different company portfolios, Sony and Samsung have also adopted different strategies to breakthrough and survive on the market. While Sony created new products and did not focus on competing in the highly segmented market, Samsung, with a constant search for technological breakthroughs, has succeeded in the highly competitive market.

In the past ten years Samsung and Sony have presented different courses in their development. While Sony went from one of the top companies in the electronic industry to an unprofitable company, Samsung has become more valuable than Sony ever was.

This paper attempts to explain and emphasize how the company portfolios, meaning their products, vision, objectives and business strategies have impacted their success or failure in maintaining market share and profitability growth. It also attempts to identify how effective were the two companies in reaching their missions and what actions are being taken to improve performance and face future challenges of the industry.

COMPANY BACKGROUND

SONY

The Sony Corporation, sometimes called Soni Kabushiki-Gaisha in Japan, is a Japanese worldwide company that is known for its products in the fields of music, electronics, telephones, computers, film, and the audiovisual industries. The company or its businesses are commonly known as Sony.

Akio Morita and Masaru Ibuka started Tokyotelecommunications Engineering in 1946. The company produced the first Japanese tape recorder in 1950. Three years later, Morita paid Western Electric $25,000 for transistor technology licenses, which sparked a consumer electronics revolution in Japan. His firm launched one of the first transistor radios in 1955, followed by the first Sony-trademarked product, a pocket-sized radio, in 1957. The next year the company changed its name to Sony.

Sony launched the first home video recorder (1964) and solid-state condenser microphone (1965). Its 1968 introduction of the Trinitron color TV tube began another decade of explosive growth. Sony bet wrong on its Betamax VCR (1976), which lost to rival Matsushita's VHS as the industry standard. However, 1979 brought another success, the Walkman personal stereo.

In the 1980s, it introduced Japan's first 32-bit workstation and became a major producer of computer chips and floppy disk drives. The purchases of CBS Records in 1988 and Columbia Pictures in 1989 made Sony a major force in the rapidly growing entertainment industry.

In the early 1990s, Sony joined Nintendo to create a new kind of game console. Although Nintendo pulled out in 1992, Sony released PlayStation in Japan (1994) and in the US (1995) to great success.