Sony announces mid-term corporate strategy

Based on its specific characteristics and the competitive landscape, each of the Sony Group’s businesses will be classified as "growth driver," "stable profit generator" or "area focusing on volatility management" in terms of its position within the Company’s overall business portfolio. Each business will then be assigned a target figure for Return on Invested Capital (ROIC) linked with the ROE target for Sony Group as a whole, and managed with a clear emphasis on profitability.

Sony is positioning Devices, Game & Network Services, Pictures, and Music as the segments that will drive its profit growth over the next three years. It will implement growth measures and engage in aggressive capital investment in these areas with the aim of achieving both sales growth and profit expansion. In Devices, Sony aims to further bolster its competitive edge in the area of CMOS image sensors by investing to increase production capacity and enhance R&D. In Games & Network Services, the Company will strive to further expand the installed user base of the PlayStation platform and PlayStation Network. In Pictures, Sony will focus on expanding the audience for its Media Networks business by growing ratings and increasing its channel offering, strengthening its Television Production business, and improving margins in its Motion Picture business. In Music, the Company will increase its focus on growth areas such as the streaming music market.

As businesses capable of contributing stable profit, Sony will prioritize the generation of steady profit and positive cash flow for Imaging Products & Solutions and Video & Sound. While Sony does not anticipate overall market growth in these areas, the company will target certain areas by offering new, high value-added products such as its advanced mirrorless exchangeable lens cameras and high-resolution audio products. By capitalizing on its existing technological expertise in these areas rather than engaging in large-scale investments, and by optimizing fixed costs and enhancing inventory control, Sony will aim to maximize profits and return on investment.

Since the TV and Mobile Communications businesses operate highly volatile and competitive environments, Sony will place the highest priority on curtailing risk and securing profits in its operation of these businesses. By carefully selecting the territories and product areas it targets, Sony will seek to limit its capital investment and establish a business structure capable of securing stable profits. The Company will also continue to explore potential alliances with other companies in these areas, in response to changes in the business landscape.

Following the split out of its TV business last year, Sony is targeting October 1, 2015 to commence the next stage of this reorganization process by splitting out the Video & Sound business unit and launching it as a self-sustained, wholly owned subsidiary. Sony also intends to move forward with preparations for splitting out other business units thereafter. For those business units that are already operating as subsidiaries, Sony will move to further increase their levels of autonomy based on the strategy outlined above.

To strengthen its capability to deliver sustained, high profit levels from the fiscal year ending March 31, 2019 (FY2018) onwards, Sony will seek to reinforce its deployment of "recurring-revenue business models," built on solid customer foundations and business platforms. Already successfully implemented in the areas of Game and Financial Services, Sony will seek to further leverage this approach within its Network Services business, the Media Networks business operated by the Pictures segment, and also for interchangeable lenses and accessories within the Digital Imaging business.