Sony Announces Corporate Mid-Term Strategy for Financial Year 2018-2020

- Sony Corporation (hereinafter referred to as Sony) held a corporate strategy meeting today. The president and CEO Mr. Kenji Yoshida released the corporate orientation and medium-term strategy (the third medium-term plan), indicating the company for the next three years, that is, from 2019 The development path for fiscal year 2020 ending on March 31 and ending on March 31, 2021.

Through the core theme of KANDO (Motivation) - to emotionally impress people - and to "closer to people", Sony will strive to continuously create social value and high levels of profits in the three major business areas of electronics, entertainment and financial services. The company will implement this strategy based on the following basic principles.

Overall strategy

1. Strengthen direct-to-consumer (DTC) services and content IP, and create 'interest communities' to bring together people with similar emotional values ​​and experiences.

2. Positioning the brand hardware business as a business that consistently generates cash flow, hardware can enable Sony to connect users and creators through innovative video and audio technologies.

3. CMOS image sensors are able to capture the real world of people's lives and are crucial for the creation of KANDO content. Sony aims to maintain its position as the world's number one in imaging applications and strives to become a global leader in the field of sensing.

Strategic policy for each business category

<游戏和网络服务>

• The core of the game and web services business is to connect users and creators through PlayStation®4. The basic strategy is to further expand the PlayStationTM network (PSN) business. The annual sales of PSN network services have exceeded 1 trillion yen. With more than 80 million active users, it has become one of the world's leading online services. Specifically, Sony plans to increase the number of users subscribed to the PlayStation®Plus service and increase the stickiness between the PSN network platform and users (by considering the login frequency and platform cost. Time), measures include: Let more users use PlayStation®VR platform, cloud game service PlayStationTMNOW, video service PlayStationTMVue, PlayStationTMVideo and music service PlayStationTMMusic and other products and services. Sony will also be committed to The creation and use of IP in first-party works, and the use of growth opportunities in areas such as additional content to enhance its content IP.

<音乐业务>

• The basic strategy of the music business is to enhance Sony's music content IP. To maximize the opportunities brought by the continuous growth of the streaming media market, Sony will strive to strengthen the quality and quantity of its content IP while discovering and nurturing new artists to create new ones. IP.

• In addition to music IP, Sony's animation IP is another important part of the business and the company will further develop these assets.

<影视业务>

• The basic strategy of the film business is to strengthen and utilize Sony's IP while expanding its media network business (especially in India) to continue to improve profitability.

• Since 2015, the Film Group has been actively investing in scripts, developing existing films and using the company’s strong intellectual property rights to enhance the construction of story content. The success of the “Brave Player: Jungle of Thrones” is a representative of this approach. Has generated more than 100 billion yen in box office revenue.

• Another key strategy is the development of the Sony Pictures Entertainment (SPE) media network or channel business, especially in India. It is estimated that India will become the world’s most populous country by 2024. With the acquisition of TEN Sports last year, SPE is currently With 31 TV channels in India, this business will become the company's major asset in the future.

<品牌硬件业务>

• The brand hardware business consists of home entertainment and audio (HE&S), imaging products and solutions (IP&S), and mobile communications (MC) businesses that carry the Sony brand. Sony plans to position the brand hardware as a business that consistently creates cash flow, This supports the continued investment and growth of the Sony Group. In the last fiscal year, branded hardware became the driving force behind Sony's record profit, and in the next three years, it will become the business that can generate the most stable cash flow. In this regard, Sony Will continue to implement the strategy of not blindly pursuing quantity, focusing on profitability and high-end market.

• In addition, Sony will also use technology developed in the brand hardware business to support long-term plans in the areas of medical products and AI and robotics.

<半导体业务>

• CMOS image sensors are key components for high-growth industries such as the Internet of Things, artificial intelligence, and self-driving cars. Sony's competitive advantage in this area stems from its era of charge-coupled device (CCD), which has been cultivating for many years. Semiconductor technology expertise. Sony’s goal is to maintain its position as the world's #1 imaging company and become a leader in sensing applications for a longer period of time. To this end, Sony will extend its sensing applications to applications such as automotive. Outside the field of smart phones.

<金融服务>

• The financial services business will continue to create a high level of revenue for the Sony Group and provide a stable source of profit. This is a business closely linked with customers. Sony will be committed to approaching customers through FinTech.

Sony's long-term vision and social value creation

• As a company, in addition to creating economic value, Sony must also manage social values, including the natural environment of the Earth.

• With KANDO as its mission, through the creation of an interest community, Sony will make people feel enriched and enriched, thus creating social value.

• At the same time, considering that Sony's business depends on the natural environment and society, the company will continue to promote environmental and human rights measures at all levels of its supply chain from a long-term perspective.

• In addition, Sony hopes to contribute to safety in the era of self-driving cars and to further develop imaging and sensing technologies.

• Sony plans to make a broader contribution to education (for example, by nurturing creators, providing educational tools so that children can learn to program and hatch new business).

Medium Term Plan - Financial Objectives

• For business management from a longer-term perspective, Sony has set overall key performance indicators for the next three years.

• During this medium-term plan period, operating cash flow (OCF) will become the most important performance indicator. The company will set the total OCF including the financial services business department to 2 trillion yen or more during the three-year period.

• With regard to the distribution of these cash, Sony plans to generate capital expenditure of approximately 1 trillion yen. The remaining 1 trillion yen will give priority to strategic investment, and will also allocate appropriate balance sheet improvement and shareholder returns to further the To enhance Sony's corporate value. In terms of shareholder returns, Sony will steadily increase its dividend for a long period of time.

• The company will strive to maintain a ROE of 10% or higher.

(This article is translated from English text)

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