Sony 2003 Annual Report Download - page 7

Sony Corporation Annual Report 2003 5
Management Discusses Key Issues
Sony Corporation Annual Report 2003 5
Solidifying Sony as the Strongest Consumer
Brand through the Convergence of Electronics
and Content
As the broadband era unfolds, Sony will continue to
assist customers in realizing their dreams and experienc-
ing everlasting emotions through a variety of hardware,
content and services. Sony w ill also continue to pursue
our vision – that of being the strongest consumer brand –
as w e promote the convergence of Electronics and
Game, Music and Pictures.
Working to Transform Sony into a 21st Century
Enterprise
While our goals and vision remain the same, Sony’s op-
erating environment is undergoing a dramatic change.
Breathtaking advances in semiconductor and communi-
cations network technology are sparking far-reaching
structural change, not only in the electronics industry,
but also in industries as diverse as communications and
financial services. Across the electronics industry, com-
panies from countries w ith lower manufacturing costs
have emerged as prominent market players, and this
trend is rapidly causing many products to become mere
commodities. To succeed in this environment, Sony must
reexamine the very essence of the business structure
that underpinned our accomplishments in the past
century. We must go beyond the restructuring we have
enacted so far to transform Sony into an organization in
step with the 21st Century.
At our Corporate Strategy Meeting in May 2003, we
set a target for 2006, the year in which we will cel-
ebrate our 60th anniversary. By that year, we aim for
Sony to have a highly profitable business structure simi-
lar to the world’s leading multinationals. That means
that, for the fiscal year ending March 31, 2007, we aim
to build a structure which can achieve an operating
income margin of 10% for Sony Group consolidated,
excluding the Financial Services segment. In order to
reach this target, significant restructuring is essential, as
is the reinforcement of our products and the consistent
execution of a strategy to spur grow th. Accompanying
these moves w ill be more rigorous control of our balance
sheet and aggressive asset management.
2nd Phase of Restructuring
Since 1999, Sony has been working to withdraw from
certain businesses while concentrating resources in other
businesses. At the same time, we have streamlined our
manufacturing facilities. Through the establishment of
Sony EMCS Corporation, an engineering and manufac-
turing platform with horizontal oversight over numerous
manufacturing facilities, we have built a more flexible and
efficient supply chain management system (that extends
from raw material procurement to end-customer sale).
This is just one of the ways in which we have made our
manufacturing facilities more competitive. Through the
steady implementation of these initiatives, the number
of manufacturing facilities at the end of March 2003