Sony Corp’s newly appointed CEO, Kazuo Hirai is promising to forge a new path for a company that once dominated the business of “filling free time with the creation of wildly popular consumer products” including Walkman music players and PlayStation game consoles.
The selection of the 51-year old Hirai on Wednesday marks the end of the leadership of Howard Stringer who as a British national was selected in 2005 as the first non-Japanese CEO of Sony. During his seven year reign, Stringer was unable to turn around Sony’s deteriorating electronics business. The leadership change has come at a critical moment with the combination of its market share being squeezed by the manufacturing accomplishments of Samsung Electronics Co., the unstoppable innovation and success of Apple Inc. and the steep ascent of the yen, which rose 30% against the dollar during Mr. Stringer’s time which hindered profit goals. Clearly, Sony needs someone to step in and make some drastic changes and Mr Hirai claims to be the man to make it happen.
Hirai, who will take up his position as CEO in April says that he wants to cut costs and shake up the corporate structure that he currently blames for preventing product innovations and keeping Sony anchored in the past in the wake of Apple and Samsung’s product development innovations. He rose up the corporate ladder with a record of tough cuts, most notably squeezing profits out of the company’s PlayStation game division four years after it reported a $2 billion loss. “I thought turning around the PlayStation business was going to be the toughest challenge of my career, but I guess not,” Hirai told The Wall Street Journal.
Based on his success with PlayStation Hirai was promoted in April 2011 to oversee the consumer-electronics division and by November, he tackled the difficult TV business, the cornerstone of Sony’s electronics unit which having failed to embrace the liquid crystal display, continued to make losses over a seven year period. Three months ago already, before his appintment as CEO, Hirai decided to cut the sales goals of the television group by half saying that Sony would “build only what he could sell”.
Included in his strategic goals is Hirai’s determination to teach the company’s 168,000 employees that past successes in manufacturing must be replaced by selling the harder-to-quantify “user experience.” Hirai continued ”We really need to buckle down and be realistic. I don’t think everybody is on board, but I think people are coming around to the idea that if we don’t turn this around, we could be sitting in some serious trouble.” Hirai is planing to have a news conference on Thursday.
Sony debuted its Tablet S in late 2011 to solid reviews however, the device has yet to reach significant sales.