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Sony & Sharp: LCD Fallout

Sony & Sharp: LCD Fallout. Chris Saraceno Patrick Guin Patrick Lunney Jake Brobst Adam Trinh. Background: Sony & Sharp. Sony Fifth largest media conglomerate Headquartered in Tokyo, Japan World’s 3 rd highest shipment of flat screen TVs from April 2010 to June 2010 Sharp

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Sony & Sharp: LCD Fallout

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  1. Sony & Sharp: LCD Fallout Chris Saraceno Patrick Guin Patrick Lunney Jake Brobst Adam Trinh

  2. Background: Sony & Sharp • Sony • Fifth largest media conglomerate • Headquartered in Tokyo, Japan • World’s 3rd highest shipment of flat screen TVs from April 2010 to June 2010 • Sharp • Multinational corporation that creates electronic products • Headquartered in Osaka, Japan

  3. Background: The Joint Corporation • July 2009: joint corporation established • Sony had a contract for a ~7% stake in the joint firm, with a maximum potential of ~34% • Sakai production facility covers 1.27M square meters • Can produce 13 million 42” panels per year • Sony’s make-or-buy decision drew attention from the domestic manufacturing sector

  4. The Problem: Sharp’s Decline • The domestic market for LCD TVs is certain to shrink in fiscal 2011 • Competition has intensified the demand for flat-screen TVs • July-September 2010, South Korea and Taiwan accounted for ~80% of the global LCD panel market • Sharp accounted for 10%

  5. The Outcome: Sony’s Withdrawal • Procurement plans were reconsidered by Sony, their TV-related business is expected to fall into the red • Termination clause: Sony has dropped its original plan to raise its stake in the joint organization to 34% • Still maintains 7% stake • Sony plans to boost its supply of panels made in Taiwan from 30% to about 50%

  6. Potential Solutions • Sony’s project procurement management started in the right direction, but eventually fell through • Not all partnership opportunities were considered • Clearly the contract did not maintain the original agreement • Sony should have considered all of their options in their make-or-buy decision

  7. Works Cited • Schwalbe, Kathy. Information Technology Project Management 6e. Boston, MA: Course Technology, 2010. Print. • The Yomiuri Shimbum. “Sony scraps LCD plans with Sharp / Opts to boost procurement abroad instead.” Daily Yomiuri Online. Nov. 28 2010. Web. 30 Nov. 2010. <http://www.yomiuri.co.jp/dy/business/T101127002343.htm>.

  8. Key PM Terms • Procurement • Contract • Make-or-buy decision • Project procurement management • Termination clause

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