Al-Azhar university – GAZA Faculty of economic and administrative science

Department of business administration International Business

INDUSTRIAL ANALYSISfor

SONY

PREPARED BY/ AHMED M. SHALTOOT

UNDER SUPERVISION/ DR. BELAL EL-BASHITI

2010-2011

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Company Name

Sony Corporation

Founded

May 7, 1946

Headquarters

1-7-1 Konan, Minato-ku, Tokyo 108-0075, Japan

Representative Corporate Executive Officers

Chairman, CEO and President

Howard Stringer

Vice Chairman

Ryoji Chubachi

Executive Deputy President and CFO

Nobuyuki Oneda

Major Products

Audio

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Home audio, portable audio, etc.

Video

Video cameras, digital still cameras, and DVD-Video players/recorders, and Digital-broadcasting receiving systems

Televisions

LCD televisions, projection televisions, CRT-based televisions, etc.

Information and communications

PC, printer system, broadcast and professional use audio/video/monitors and other professional-use equipment

Semiconductors

LCD, CCD and other semiconductors

Electronic components

Optical pickups, batteries, audio/video/data recording media, and data recording systems

Locations of Major Offices and Research Centers (in Japan)

Tokyo, Kanagawa, Miyagi

Headcount (Consolidated)

171,300 (as of March 31, 2009)

Consolidated Sales and Operating revenue

7,730,000 million yen

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Introduction

Generally, Totsuko was started by 2 talented Engineer, Masaru Ibuka and Marketing

Innovator, Akio Morita in 1946 in Japan. The company name was later changed to SONY

in 1958. From 1950 to 1999, SONY introduced many innovative products; many of the

world’s first technology and even created a robotic dog named Aibo.

what is Sony’s mission ?

SONY mission is to create things for every kind of imagination and involve them in

people’s daily life. In addition, interconnected multimedia technology is always SONY’s

promise to the people.

what is Sony’s vision ?

Sony recognizes the importance of preserving the natural environment that sustains life

on earth for future generations and helps humanity to attain the dream of a healthy and

happy life. Sony is committed to achieving this goal by seeking to combine ongoing

innovation in environmental technology with environmentally sound business practices.

Sony aims for greater eco-efficiency in its business activities through maximizing the

efficiency of energy and resource use and providing products and services with greater

added value. Efforts will focus on reducing harmful effects on the environment by

ensuring compliance with all applicable environmental regulations and reducing the

environmental impact of energy and resource use on a continuing basis.

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In this research I will try to market Sony in the two country, which are :

1.EgyptEconomy – overview

Occupying the northeast corner of the African continent, Egypt is bisected by the highly

fertile Nile valley, where most economic activity takes place. Egypt's economy was

highly centralized during the rule of former President Gamal Abdel NASSER but opened

up considerably under former Presidents Anwar EL-SADAT and Mohamed Hosni

MUBARAK. Cairo from 2004 to 2008 aggressively pursued economic reforms to attract

foreign investment and facilitate GDP growth. The global financial crisis slowed the

reform efforts. The budget deficit climbed to over 8% of GDP and Egypt's GDP growth

slowed to 4.6% in 2009, predominately due to reduced growth in export-oriented sectors,

including manufacturing and tourism, and Suez Canal revenues. In 2010, the government

spent more on infrastructure and public projects, and exports drove GDP growth to more

than 5%, but GDP growth in 2011 is unlikely to bounce back to pre-global financial

recession levels, when it stood at 7%. Despite the relatively high levels of economic

growth over the past few years, living conditions for the average Egyptian remain poor.

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* Here we will take a look at some of economic fact regard Egypt :

Economy of Egypt

Cairo skyline, as seen from the Cairo TowerRank 27th

Currency Egyptian pound (EGP)Trade organizations WTO

StatisticsGDP $500.9 billion (2010 est.)GDP growth 5.3%) 2010 est(.GDP per capita $6,200 ) 2010 est( .GDP by sector agriculture: 13.5%; industry: 37.9%; services: 48.6% (2010 est.)CPIInflation 12.8%) 2010 est(.Populationbelow poverty line

20%) 2005 est(.

Gini index 34.4) 2001(Labour force 26.1 million (2010 est.)Labour forceby occupation

Agriculture (32%), Industry (17%), Services (51%) (2001 est.)

Unemployment 9.7%) 2010 est(.

Main industriesTextiles, Food Processing, Tourism, Chemicals, Pharmaceuticals, Hydrocarbons, Construction, Cement, Metals, Light Manufactures

Ease of Doing Business Rank

94

ExternalExports $25.34 billion (; 2010 est.)

Export goodsCrude oil and Petroleum products, Cotton, Textiles, Metal Products, Chemicals, Agricultural goods

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Main export partnersUnited States 7.95%, Italy 7.26%, Spain 6.78%, India 6.69%, Saudi Arabia 5.53%, Syria 5.3%, France 4.39%, South Korea 4.27% (2009)

Imports $46.52 billion (; 2010 est.)

Import goodsMachinery and Equipment, Foodstuffs, Chemicals, Wood products, Fuels

Main import partnersUnited States 9.92%, China 9.63%, Germany 6.98%, Italy 6.88%, Turkey 4.94% (2009)

FDI stock $72.41 billion (31 Dec 2010 est.)

Gross external debt $30.61 billion (31 Dec 2010 est.)

Public financesPublic debt 80.5% of GDP (2010 est.)Revenues $46.82 billion (2010 est.)Expenses $64.19 billion (2010 est.)Foreign reserves $35.72 billion (31 Dec 2010 est.)

Main data source: CIA World Fact BookUS dollarsAll values, unless otherwise stated, are in

Overview of the steps to Starting a Business in Egypt, Arab Rep.

It requires 6 procedures, takes 7 days, and costs 6.31 % GNI per capita to start a business in Egypt, Arab Rep..o

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:

ays) Cost to

The economic condition in the shadow of the impact of Egyptian revolution .

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Most of Egypt’s economic activity takes place in the North Eastern Nile Delta. This area

is home to vast swathes of agricultural land, mineral deposits, factories and of course

Cairo, the capital. In the last 30 years, Egypt’s economy has been dragged into the 21st

century through various reforms. Structural reforms including fiscal and monetary policy,

privatization, business legislation and investment promotion has seen it being

transformed from the highly centralized economy inherited from Gamal Abdel Nasser to

a functional market based economy. For this at least, Mubarak is respected by his

successors who claim that they have no intention of changing his economic model.

But the market based Egyptian economy isn’t really all that market based. Cronyism was

almost a norm and corruption was a given. Allocation of state lands for private

development, concessionary loans for the ruling elite, and sweet deals on privatized state

industries for regime figures were common. To this day the Army holds what is

effectively the biggest conglomerate in the country. By some estimates, Egypt’s military

controls as much as a third of the national economy. With its staggering array of

manufacturing and service operations, the military provides everything from pest control

services to washing machines, without ever paying taxes on or disclosing revenues that

are believed to be stratospheric.

Such a ‘market based’ economy of course, is extremely harsh on the poor. They have

suffered the most because of increasing food prices and are seeing the overthrowing of

Mubarak as a sign that everything should now go their way. They are currently

demanding what are effectively state hand-outs in order for the wealth gap to be closed.

The army has promised a 15% pay hike for civil servants, but if all these demands for

hand outs are met, the economy could very well end up crippled.

Think about it like this. Egypt’s economy mainly rests on tourism, foreign investment

and exports. The protests have, for the time being at least, slowed the amount of tourists

entering the country. Banks and factories have only just opened because the people have

not been going back to work, prompting the military to launch a SMS campaign to get

people off the streets and back into their workplaces, a campaign which has largely

failed. Fears of the economy has led to large scale capital flight with foreign investors

removing their money and Egypt’s stock market is closed and will remain so

indefinitely. Add to this a frozen financial market, paralyzing labor strikes, rising food

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prices and you have a perfect recipe for collapse.

Egypt has already lost over $15 billion in output since the start of demonstrations on

January 25, according to Foreign Ministry officials. And in the coming months, Egypt’s

ruling military council will face mounting public pressure to provide immediate relief

with subsidies and other welfare measures. The interim government has already indicated

a clear propensity for economic populism, promising to pump up government salaries by

15 percent and offering a monthly pension of LE 1500 (roughly U.S. $255) to the

families of protesters killed over the course of the uprising. Question is if they are to do

this, where will the money come from?

Admittedly Egypt’s liberalization policies have yielded mixed results. Sure, there was

growth averaging at around five percent annually, but the government’s large failure to

share this income with the people has convinced the latter that the very economic model

has failed. Mubarak’s government failed to share the wealth, and the benefits of growth

have failed to trickle down to improve the lives of the poor. This has resulted in the

growing problem of unemployment and underemployment among youth under the age of

30.

But to switch from this model and to go all out welfare state will mean a very bleak

future indeed for Egypt. That’s why the economy and political situation is balanced on a

needlepoint right now. Many analysts argue that what Egypt needs now is a new

blueprint for sustainable development, including policies to address inequality and

sweeping reforms to rejuvenate a flailing educational system. But this is easier said. If the

people’s mood bends toward mass scale populism, then it would be an easy task for a

not-so-enterprising and short-termist government to comply, seeking their temporary

support. On the other hand if the people do put trust in their new government to make the

sweeping changes necessary to eventually bring Egypt’s economy out of its very own

dark age, they will be running the real risk of it all going back to the way it has been for

the last few decades, rendering their ‘revolution’ ultimately impotent.

Mubarak after all, was only one man. Many of the people in his regime who enjoyed the

privileges of power are still up there in the Egyptian system waiting for a chance to

slowly ease back into their former status, like sycophants of the Pharaoh seeking a new

master to latch onto. What Egypt may need then, is a complete dialysis of their whole

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political system. And this is a much harder task than simply getting one man out of

office. This in fact, would require a whole new revolution.

Main competitors There is no corporation in Egypt that produce electronic products but corporation that

make compilation and international exhibition that exhibit all the luxury products such as

cell phone, TV, computers, laptop, MP3, radio and so forth .

2.Turkey

Economy – overview

Turkey's economy is increasingly driven by its industry and service sectors, although its

traditional agriculture sector still accounts for about 30% of employment. An aggressive

privatization program has reduced state involvement in basic industry, banking, transport,

and communication, and an emerging cadre of middle-class entrepreneurs is adding a

dynamism to the economy. Turkey's traditional textiles and clothing sectors still account

for one-third of industrial employment, despite stiff competition in international markets

that resulted from the end of the global quota system. Other sectors, notably the

automotive, construction, and electronics industries, are rising in importance and have

surpassed textiles within Turkey's export mix. Oil began to flow through the Baku-

Tbilisi-Ceyhan pipeline in May 2006, marking a major milestone that will bring up to 1

million barrels per day from the Caspian to market. Several gas pipelines also are being

planned to help move Central Asian gas to Europe via Turkey, which will help address

Turkey's dependence on energy imports over the long term. After Turkey experienced a

severe financial crisis in 2001, Ankara adopted financial and fiscal reforms as part of an

IMF program. The reforms strengthened the country's economic fundamentals and

ushered in an era of strong growth - averaging more than 6% annually until 2009, when

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global economic conditions and tighter fiscal policy slowed growth to 4.7%, reduced

inflation to 6.5% - a 34-year low - and cut the public sector debt-to-GPD ratio below

50%. Turkey's well-regulated financial markets and banking system weathered the global

financial crisis and GDP rebounded strongly to 7.3% in 2010, as exports returned to

normal levels following the recession. The economy, however, continues to be burdened

by a high current account deficit and remains dependent on often volatile, short-term

investment to finance its trade deficit. The stock value of FDI stood at $174 billion at

year-end 2010, but inflows have slowed considerably in light of continuing economic

turmoil in Europe, the source of much of Turkey's FDI. Further economic and judicial

reforms and prospective EU membership are expected to boost Turkey's attractiveness to

foreign investors. However, Turkey's relatively high current account deficit, uncertainty

related to policy-making, and fiscal imbalances leave the economy vulnerable to

destabilizing shifts in investor confidence .

* Here we will take a look at some of economic fact regard Turkey :

Economy of Turkey

Currency Turkish lira (TRY)

Fiscal year Calendar year

Trade organizations G-20 major economies, OECD, EU Customs Union, WTO, ECO, BSEC

Statistics

GDP $1,038 trillion(2010)

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GDP growth 8.9% (2010)

GDP per capita $13,392 (2010)

GDP by sector agriculture: 9.4%; industry: 25.9%; services: 64.7% (2009 est.)

Inflation (CPI) 3.99% (March 2011)

Gini index 41 (2008)

Labor force 25.3 million (2009 est.) note: about 1.2 million Turks work abroad

Labor forceby occupation

Agriculture: 29.5%, industry: 24.7%, services: 45.8%[5] (2005)

Unemployment 10.5% (June 2010)

Main industries textiles, food processing, autos, electronics, tourism mining (coal, chromate, copper, boron), steel, petroleum, construction, lumber, paper

Ease of Doing Business Rank

65th

External

Exports $102.2 billion (2009 est.)

Export goods apparel, foodstuffs, textiles, metal manufactures, transport equipment

Main export partners Germany 9.6%, France 6.1%, U.K. 5.8%, Italy 5.8%, Iraq 5% (2009 est.)

Imports $140.8 billion (2009 est.)

Import goods machinery, chemicals, semi-finished goods, fuels, transport equipment

Main import partners Russia 14%, Germany 10%, China 9%, U.S. 6.1%, Italy 5.4%, France 5% (2009 est.)

FDI stock $205 billion (31 December 2009 est.)

Gross external debt $274 billion (31 December 2009 est.)

Public finances

Public debt 48.5% of GDP (2009 est.)

Revenues $145.3 billion (2009)

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Expenses $180.6 billion (2009)

Foreign reserves $75.3 billion (31 December 2009 est.)

Main data source: CIA World Fact BookAll values, unless otherwise stated, are in US dollars

Overview of the steps to Starting a Business in Turkey

It requires 6 procedures, takes 6 days, and costs 17.20 % GNI per capita to start a business in Turkey.

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Effect of the Global Financial Crisis in Turkey

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Like many economies, the Turkish economy has been affected by the global financial

crisis with its Finance Ministry reporting that Turkey’s budget deficit swelled to 23.2

billion Turkish liras ($15 billion) in the first half of 2009, 13 times higher than a year

earlier.

Share prices in Turkey nearly doubled over the course of 2009. According to The

Economist, in the period December 2008 – December 2009 the Turkish stock market rose

the most in the world after Argentina’s stock market.

On 8 January 2010, International credit rating agency Moody’s upgraded Turkey’s rating

with a notch.[18] The credit rating agency Fitch upgraded Turkey’s sovereign rating two

notches to BB+. Turkey is one of the few countries that upgraded it’s rating with two

notches.

The Economist points out that:

Yet in many ways Turkey has weathered the credit crunch better than other emerging

economies. Partly thanks to tough regulation, not a single Turkish bank has gone under.

That is also because, unlike many Western banks, they have few toxic assets and limited

mortgage exposure. So the government has not had to divert public money into rescuing

banks.

In 2009, the Turkish Government introduced various economic stimulus measures to

reduce the impact of the financial crisis such as temporary tax cuts on automobiles, home

appliances and housing. This resulted in the production of durable consumer goods

increasing by 7.2% but automotive production still fell.

3 .Brazil

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Economy – overview

The economy of Brazil is the world's seventh largest by nominal GDP and eighth largest

by purchasing power parity. Brazil has moderately free markets and an inward-oriented

economy. Its economy is the largest in Latin American nations and the second largest in

the western hemisphere. Brazil is one of the fastest-growing major economies in the

world with an average annual GDP growth rate of over 5 percent. In Brazilian real, its

GDP was estimated at R$ 3.143 trillion in 2009. The Brazilian economy has been

predicted to become one of the five largest economies in the world in the decades to

come.

Brazil is a member of diverse economic organizations, such as Mercosul, Unasul, G8+5,

G20, WTO, and the Cairns Group. Its trade partners number in the hundreds, with 60

percent of exports mostly of manufactured or semi manufactured goods. Brazil's main

trade partners in 2008 were: Mercosul and Latin America (25.9 percent of trade), EU

(23.4 percent), Asia (18.9 percent), the United States (14.0 percent), and others (17.8

percent).

According to the World Economic Forum, Brazil was the top country in upward

evolution of competitiveness in 2009, gaining eight positions among other countries,

overcoming Russia for the first time, and partially closing the competitiveness gap with

India and China among the BRIC economies. Important steps taken since the 1990s

toward fiscal sustainability, as well as measures taken to liberalize and open the

economy, have significantly boosted the country’s competitiveness fundamentals,

providing a better environment for private-sector development.

The owner of a sophisticated technological sector, Brazil develops projects that range

from submarines to aircrafts and is involved in space research: the country possesses a

satellite launching center and was the only country in the Southern Hemisphere to

integrate the team responsible for the construction of the International Space Station

(ISS). It is also a pioneer in many fields, including ethanol production.

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Brazil, together with Mexico, has been at the forefront of the Latin American

multinationals phenomenon by which, thanks to superior technology and organization,

local companies have successfully turned global. These multinationals have made this

transition notably by investing massively abroad, in the region and beyond, and thus

realizing an increasing portion of their revenues internationally.

Brazil is also a pioneer in the fields of deep water oil research from where 73 percent of

its reserves are extracted. According to government statistics, Brazil was the first

capitalist country to bring together the ten largest car assembly companies inside its

national territory.

The annual Brazil Investment Summit takes place in São Paulo and is the largest

gathering in Brazil of international investment experts covering opportunities in

alternative vehicles, infrastructure, and advanced trading strategies.

* Here we will take a look at some of economic fact regard Egypt :

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Economy of Brazil

São Paulo Stock Exchange

Rank 7th (nominal) / 8th (PPP)

Currency Brazilian real (BRL, R$)

Fiscal year Calendar year

Trade organizations

Unasul, WTO, Mercosul, G-20 and others

Statistics

GDP $2.09 trillion (nominal)$2.17 trillion (PPP)

GDP growth 7.5% (2010)

GDP per capita$10,471 (2010) (nominal; 55th) $11,289 (2010) (PPP; 71th)

GDP by sector agriculture: 5.5% industry: 28.7% services: 65,8% (2007) Inflation (CPI) 4.44% (Aug 2010) Populationbelow poverty line

15.5% (2009)

Gini index 49.3 (June 2009)

Labour force 103.6 million (2010 est.)

Labour forceby occupation

agriculture: 20%, industry: 14% and services: 66% (2003 est.)

Unemployment 5.7% (November 2010)

Main industries airplanes, steel; iron ore, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products, including footwear, toys, and electronics; food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, and aircraft; electronics; telecommunications equipment, satellites, real estate, brewing, tourism

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Ease of Doing Business Rank

127th

External

Exports $201.9 billion (2010 est.)

Export goods transport equipment, machinery, steel, airplanes, paper, electric machinery, iron ore, soybeans, footwear, coffee, autos, automotive parts, machinery

Main export partners

China 15.3%, United States 9.6%, Argentina 9.2%, Netherlands 5.1%, Germany 4.0% (2010)

Imports $187.7 billion (2010 est.)

Import goods machinery, electrical and transport equipment, chemical products, oil, automotive parts, electronics

Main import partners

United States 15.0%, China 14.1%, Argentina 7.9%, Germany 6.9%, Japan 3.8% (2010)

Gross external debt

$310.8 billion (31 December 2010 est.)

Public finances

Public debt 41.4% net debt of GDP (2010)

Revenues $354.8 billion

Expenses $434.9 billion

Credit rating BBB-

Foreign reserves $328.6 billion (December 2010)

Main data source: CIA World Fact BookAll values, unless otherwise stated, are in US dollars

Overview of the steps to Starting a Business in Brazil

It requires 15 procedures, takes 120 days, and costs 7.26 % GNI per capita to start a

business in Brazil.

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Effect of the Global Financial Crisis in Brazil

After the G20 finance ministers and the World Bank/IMF annual

meetings in Washington last weekend, most Latin American ministers

of finance returned to their countries with a somber outlook. As the

global financial crisis continues to unfold, it was clear that developing

countries may have to replace some market financing with lending

from the multilaterals, and prepare for the recession in the U.S., which

will inevitably occur as a result of the credit squeeze of the past

months, and its impact on global markets.

This doom and gloom has not infected Brazil, however, where

President Luiz Inácio Lula da Silva is showing unprecedented self-assurance. Speaking in

Madrid, Lula said somewhat rhetorically that "this idea that markets can do everything is

over,” and more fundamentally “The times in which emerging countries depended on the

IMF are over.” This is not Hugo Chavez speaking, but the president of Latin America’s

largest economy, who enjoys 80 percent popularity in his country. Lula also alluded to

the fact that Basel rules have been applied to banks in Brazil but not in the U.S. “That has

to end,” he said. Since 1995, banks in Brazil have complied with an 11 percent capital

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Brazil's President

Lula da Silva

speaks during the

US-Brazil CEO

Forum in Sao

Paulo

requirement—one of the highest in Latin America—and Lula wants new regulation of

world financial markets, which would be stricter on banks from advanced countries.

Such a high level of confidence from Lula about Brazil’s economy reflects some

underlying economic fundamentals that cannot be ignored. Brazil’s foreign reserves are

now $205 billion, four times higher than in 2004. Financial intermediation, though low

for developed country standards, is conducted primarily by domestic institutions. Only 30

percent of bank assets are foreign-owned, compared to over 80 percent in Mexico. To the

extent that Brazilian banks also have very low foreign liabilities, the economy is

somewhat protected from a major credit contraction in international financial markets.

However, nearly half of Brazil’s exports are commodities, which have benefited from

historically high prices during the last four years. The world is still debating whether this

is a permanent shift in commodity prices or whether prices will go back to their long-run

levels. Demand from China, substitution of fossil fuels, and limited technological

progress in agricultural production seem to be part of the explanation for higher prices

(some economists would also add the effects of high liquidity in advanced countries).

Although no one really knows what is going to happen with commodity prices in the

future–with high food prices, research and development in agriculture is likely to surge—

the simple fact is that during the last month alone soybean prices declined 20 percent.

Prices of other commodities fell between 14 and 20 percent. This means that Brazil’s

exports may indeed take a hit in the near future.

Brazil is expected to run a current account deficit of about 2 percent of GDP for 2008 and

2009 even under optimistic scenarios for export prices. Of course, with sharper declines

in prices and lower demand abroad for its exports, the deficit could increase. Although

this does not pose a major risk, it simply suggests that Brazil is not in the group of

countries with large foreign exchange surpluses. Not surprisingly, as world financial

markets collapsed during the last month, the real lost 31 percent and stock prices declined

20 percent, while spreads on Brazilian debt rose by more than 170 basis points. Under

this new scenario, Petrobras, as well as other Brazilian flagship corporations, may have to

cut somewhat their aggressive investment plans.

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Looking at these fundamentals of the Brazilian economy, there are good reasons

therefore to believe that Brazil’s economy is resilient to the global financial crisis. But

that does not mean that Brazil is immune. As in China, the key to Brazil’s future depends

heavily on the domestic market. With a growing middle class, and large infrastructure

projects under way, private consumption and domestic investment are likely to become

the major sources of growth in the years ahead. In fact, the government is launching a re-

industrialization strategy, with high investment in steel, petrochemicals, and defense

equipment (including construction of its first atomic submarine). Is this going to revive

the white elephants of the 1960s and 70s? Probably not. This time around the

development strategy in Brazil is carried out by the private sector, with limited support

from the government, and much better governance structures than in the past. If these

fundamentals can remain strong, Brazil may yet dodge the current global economic

bullet.

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