…but the woes at Sony Corporation remind me of a couple of my posts about the path this company has been taking.
From March, 2005:
The New York Times (3/13, registration required) quotes Sir Howard Stringer, the new chief executive of Sony, arguing for mutual benefit between his company’s electronics and entertainment divisions. At the Consumer Electronics Show last month, Sir Howard said, “A device without content is nothing but scrap metal.”
Following the chain of logic he seems to be developing, we could also argue that a car without fuel is scrap metal…and therefore, auto companies need to own oil companies. Or that computers are useless without software…so all computer manufacturers need to possess large software operations.
Randall Stoss, author of the NYT article, observes that Sir Howard’s remark is “a platitude beneath mention–unless, perhaps, one were a mite defensive about owning both a widget factory and an entertainment factory.” Stoss goes on to credit the success of the iPod (far greater than Sony’s competitive product) to the fact that Apple has not pursued synergies between device and content…
A company thrives when it has all that it needs to make a compelling product and is undistracted by fractiousness among divisions that resent being told to make decisions based upon family obligations, not market considerations.
From September 2012:
In his Financial Times article Why Sony did not invent the iPod, John Kay notes that there have been many cases in which large corporations saw correctly that massive structural changes were about to hit their industries–attempted to position themselves for these changes by executing acquisitions or joint ventures–and failed utterly. As examples he cites Sony’s purchase of CBC Records and Columbia Pictures, the AT&T acquisition of NCR, and the dreadful AOL/Time Warner affair. He summarizes the reason why these things don’t tend to work:
A collection of all the businesses which might be transformed by disruptive innovation might at first sight appear to be a means of assembling the capabilities needed to manage change. In practice, it is a means of gathering together everyone who has an incentive to resist change.