Sony Unveils New Turnaround Plan

Sony has a plan to become profitable again - splitting the company and killing off failing businesses.

The company aims to boost its operating profit 25-fold within three years by focusing on its more profitable image sensors, videogame and entertainment businesses, its chief executive has said.

The exec in question, group CEO Kazuo Hirai, said the company wanted to give subsidiaries more autonomy, so that important decisions could be made faster.

He also didn’t rule out the possibility of exiting markets where Sony didn’t excel, like TV’s and smartphones. Sony spun off its TV unit last year and exited the personal computer business.

“If our initial mid-term corporate strategy was about reforms, the second mid-term strategy starting from the next business year will be about generating profit and investing for growth,” Hirai said in the strategy briefing.

Profitability, Not Size, Is The Emphasis

Sony is targeting an operating profit of 500 billion yen (£2.73 billion) and a 10 per cent return on equity for the fiscal year through March 2018.

The company would use return on equity (ROE) as its main measurement for performance, setting a target of more than 10 per cent by the end of the business plan to March 2018, Hirai added.

But Sony won’t target sales: it’s valuing profitability and not size.

“The Sony spirit is about doing what others didn’t dare to do," Phys.org quotes Hirai saying.

Sony shares have risen more than 80% over the past year as investors applauded its restructuring, which accelerated since Hirai appointed Kenichiro Yoshida as his chief strategy officer in late 2013.

Author: Sead Fadilpašic