Daquan Gunn is a 10th-grade student at Thurgood Marshall Academy in Washington, D.C. Today he is job-shadowing The Motley Fool's editorial team. As one of his assignments, he put together the below article about Sony.
Sony's stock has lost more than 40% of its value over the past five years and is attempting to recover from the financial crisis of '08. In an attempt to recover from "sharp economic deterioration" in the wake of financial crisis, the group implemented structural reforms with the aim of boosting profitability and its operational strength. These setbacks caused Sony to choose not to compete with Apple as well as Microsoft in areas such as online media.
In addition to changes in their core strategies, Sony also is struggling with finding qualified leadership to guide the company in its future. In naming Kazuo Hirai on March 10 to oversee all of Sony's consumer electronics, CEO Howard Stringer seemed to give him the front position to succeed him as the boss, though Stringer has not stepped down.
"This is a very bad thing to happen for Sony, especially when it's putting so much emphasis on networking," an analyst told Bloomberg. Hirai does not have an engineering background. "Hirai is a natural successor, but he still has to prove himself. This is his moment to shine."
Hirai received a Bachelor's of Arts in Christian University in Tokyo. He joined a joint venture set up in Tokyo between Sony and CBS after graduation. He moved to Sony Computer Entertainment America in 1995 and became president of the U.S. unit in 1999 before becoming head of the games business in 2006. Hirai definitely has a business background, but time would tell whether he could make the right decisions to deal with competitors.
Japan's earthquake (the worst in the country's history) certainly hurt, as did the recent security breach of Sony databases. These may all be contributing factors to Sony's bad economic state. In the end, sources say that if Hirai indeed takes over the CEO position, he will be closely watched by the market.