Sony 2009 Annual Report Download - page 16

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By uniting our Electronics and Game business groups and by
establishing a common software development platform, we are
in a better position than ever to innovate and connect seamlessly
through network services. Also, with the enormous library of
pictures, music and game content possessed by the Sony
Group, we are one of the largest entertainment companies in the
world. This gives us the ability to explore innovative entertainment
initiatives with great speed, flexibility and creativity.
Our diverse content libraries and redoubled focus on the
development of software and user interfaces will bring differentiation
and additional value to our products, and will help make our
vision of a networked world a reality.
Becoming “Asset Light”
The time has come for us to adopt a more horizontal business
model—i.e., an “Asset Light” model that works with third
parties—for many of our businesses. With certain businesses,
minimizing our fixed assets in order to maximize business flexibil-
ity, while maintaining our differentiating technology through con-
tinued research and development, is an idea that has become a
priority over the past few years, and is the most appropriate busi-
ness model for today.
The first major step in this process was the March 2008 sale
of the production equipment that manufactures Cell and RSX
processors used in PS3™. Since then we have continued to
explore additional opportunities to engage third parties to conduct
some of our manufacturing and other operations. This will make
us leaner, stronger, quicker, more adaptable and better able to
flexibly innovate and enter and exit businesses with greater ease.
Improving Our Financial Position
The immediate and lasting improvement of our operating
performance is crucial to achieving our mission. The restructuring
measures and other cost reductions I described above are
expected to reduce our costs by more than ¥300 billion.
In addition, Mr. Nakagawa has already announced initiatives
that will substantially reduce our procurement costs by consolidating
our procurement activities across product lines, reducing the
number of component suppliers and optimizing pricing schemes.
Furthermore, we are continuing efforts to reduce costs and
rationalize operations across all divisions of the company.
Additional points of focus include the streamlining of our sales and
marketing organizations, improving our inventory planning and
supply chain management, reducing our level of inventory, and
returning the TV business, which has struggled to make money
despite achieving a very strong market share, back to profitability.
By further standardizing the design of our TVs worldwide, optimizing
our LCD panel procurement and shifting assembly to third-party