Managing Buisness Portfolio

Managing the Business Portfolio at the Corporate Level

Other giants in consumer electronics and computer industries had the opportunities to create new market space as Apple did, but they simply missed them. Sony Corporation, founded in 1946 in Japan, has been a leading manufacturer of electronic products, including the Sony Walkman and PlayStation. Since the 1980s, when it revolutionized the audio-cassette with the Walkman, Sony had grown into a global conglomerate. As of April 2011, the Sony Group was engaged in (1) the consumer and professional electronics market, (2) the music industry, (3) the motion picture industry, (4) manufacturing of mobiles, and (5) financial services.

Despite its cutting-edge technology based on vast R&D and a globally renowned brand reputation, Sony turned in a lacklustre performance. Net income dropped from US$1.5 billion in 1999 to US$851 million in 2004, and then to (US$2.6 billion) in 2011. The share price hit a 24-year low in November 2011. CEO Howard Stringer recalled Sony’s missed opportunities to create compelling products like Apple’s iPod and iTunes music store, in an interview with Businessweek: “Steve Jobs figured it out. We figured it out, we didn’t execute. The music guys didn’t want to see the CD go away.”9

The same logic drove the misstep at Microsoft when it killed its Courier tablet project. At the time when Apple was developing the iPad, Microsoft was also pursuing its own tablet (the Courier) but there were conflicting visions for its development within the corporation. One group, led by J. Allard in the Xbox division, favoured a sleek, two-screen tablet, responsive to a fingertip or pen. It was designed to run a modified version of Windows and did not need Office applications such as Microsoft Word and Exchange. The other group, led by Steven Sinofsky in the Windows division, wanted to keep Courier on its Windows platform, but the development of a tablet-friendly Windows was two years away. The Microsoft...