Business Insight Zone

Today’s Company of the Day is Sony Corporation.

~~~

Spider-Man, Spider-Man does whatever a spider can … including bail out a major Japanese conglomerate. This summer’s blockbuster performance by Spider-Man 3 wasn’t just good news for Sony Pictures Entertainment, but a lifesaver for its parent, Sony Corporation. The $70 billion Japan-based company needed Spidey’s earnings boost, because it sure wasn’t getting it from its other lines of business. Given the range of industries in which it plays, Sony faces a unique array of competitors. Its laptops compete with products from Hewlett-Packard, Lenovo, and a host of others. Its consumer electronics must tangle with several large, determined competitors — especially Samsung, which by now has spent many years consciously building its brand to emulate Sony’s. In the niche of online music and digital music players, Sony has lost ground to Apple and its runaway-hit iPod line.

Meanwhile, a third of Sony’s sales come from its entertainment units, which compete with big movie studios like Disney, cable-channel operators like Viacom, and top music labels such as Universal Music Group. The volatility across these businesses sometimes makes it hard for Sony to deliver consistent financial results. This is especially true in markets — like the market served by traditional music labels — that are experiencing radical change.

Right now the toughest sell for Sony is coming in video games, where its Playstation 3 console is competing with Microsoft’s Xbox 360. Both high-dollar, high-tech units are trailing badly behind Nintendo’s Wii model, which has taken the console market by storm since it debuted last year. Sony CEO Sir Howard Stringer — the first non-Japanese ever to lead the company — has expressed his confidence that the Playstation 3 will be a winner for Sony in the long run. Meanwhile, Stringer must bank on more hits from Sony’s other businesses, so that the Playstation 3’s struggles don’t translate to “game over” for Sony’s bigger ambitions.

~~~