To maintain its grip as the leading electronic consumer brand, Sony has partnered with several other companies through joint ventures. Among its existing partnerships include Union Carbide for the production of Eveready batteries; Prudential Life Insurance Company for its life insurance operations; Pepsi Co. for the importation and marketing of the sports equipment brand Wilson; and, a standing joint venture agreement with the government of the People’s Republic of China for the production of TV sets for Chinese markets.
Sony is the brainchild of Akio Morita, a naval lieutenant, and Masaru Ibuka, a weapons researcher. The two first met during the World War II when they were commissioned to develop a night vision gun telescope and a missile guidance system.
After the war, Ibuka was featured in a local newspaper for having invented a shortwave converter. When Morita learned about his invention, he kept in touch with Ibuka again. They formed a partnership in May 1946 from a borrowed capital of $500.The partnership was registered under the name Tokyo Tsushin Kogyo (Tokyo Telecommunications Engineering Corporation, or TTK). TTK’s first product was a rice cooker which was reported to have been a commercial failure. On their first year, they registered revenues of $7,000 for a net profit of $300.
The company’s first “Sony” product was a transistor radio which TTK has mass produced in 1954 for an American company Regency Electronics. The radios were named Sony, from the Latin word sonus, which means sound. The Sony radio was widely accepted and showed great sales potential.
The increasing popularity of the Sony radio led Morita and Ibuka to change the company’s name to Sony Kabushiki Kaisha (Corporation) in January 1958. The new company’s first new product was a transistorized TV set. Offshore offices were established in New York City and Switzerland. The overseas operations were handled by Sony Overseas.
In 1968, Sony introduced the Trinitron TV, a new color-TV innovation that produced clearer images. Sony has invested a large amount of money for the Trinitron TV that it was referred to as Sony’s biggest gamble. However, Trinitron’s market performance proved that it is worth the risk.
Sony’s next seller was the Betamax. The product was faced with much opposition including a lawsuit filed by major film outfits that Betamax can be used for copyright infringement. It was also challenged by Matshushita Electric’s Video Home System (VHS).
Sony’s major management move was the reorganization in 1982 when the company was divided into five operating groups for the sake of diversification and business focus.
The success of Sony is attributed to the wisdom of its founders who, although did not have formal management training, anticipated the market’s demands and developed innovative products to meet those needs. They were a success in instilling open-mindedness and cooperative ideals to all its workers, which the founders call “the Sony Spirit.”