Sony Inc

Jimmy Barrett
Mike Bridges
Steve Day
Matt Klingman
Chris Mattie
Name - Sony Corporation
Founded - Japan (1946)
Founders – Masaru Ibuka
Akio Morita
Where – Tokyo, Japan
CEO – Howard Stringer
Company Annual Revenue
• $78.9 Billion (March 31, 2009)
Employees Worldwide
• 171,300 (March 31, 2009)
Type of Business
• Electronics, Entertainment
Audio
Video
Televisions
Video Games
Electronic
Components
Financial Services
Information and
Communication
2-Year Goals Differences
• Annual Revenue • Annual Revenue
x $90 billion (3/31/2011) x About $5 per year
• Employees • Employees
x 200,000 worldwide x About 15,000 per year
• Become more green
as industry moves that
way.
http://www.sony.net/united/makedotbeli
eve/
Elements to Focus on:
• Politics
• Economic
• Leadership and Interpersonal Skills
• Functional Factors
• Pressures (Cost Reduction and Local
Responsiveness)
• Finally: which strategy fits best?
FLOWCHART DESCRIPTION
1. Goods are ordered from subsidiary in India.
2. Japanese headquarters agrees to fill order
request.
Indian 3. New Dehli subsidiary arranges for a letter of
Japanese credit from Bank of New Dehli.
Exporter Importer 4. Bank of New Dehli sends letter of credit to
Bank of Tokyo.
5. Bank of Tokyo informs Sony Headquarters
about letter of credit receipt.
6. Order is shipped from Japanese exporter to
New Dehli, India.
7. Japanese exporter presents draft to Bank of
Tokyo.
8. Bank of Tokyo presents draft to Bank of New
Dehli.
9. Bank of New Dehli returns draf once it has
been accepted.
Japanese exporter sells drafts to bank.
Bank of Bank of 10.
11. Bank of New Dehli inform Indian subsidiary
Tokyo New that documents have arrived.
Sony of New Dehli pays Bank of New Dehli.
Dehli 12.
13. Bank of Tokyo presents a matured draft to
Bank of New Dehli and receives final
payment.
Market Share…
Brand Awareness…
Budget for this Project
• How will money be raised?
• Who will be responsible?
Returnon Investment (3-year plan)
How will this plan be measured?
• Compensation Act of 1923 - an employee is covered if he or she suffers
from any kind of disablement, occupational disease or death.
• Minimum Wages Act 1948 - In our case New Delhi has separated minimum
wages based on your skill set. The categories are self explanatory there
labeled unskilled (203 rupees), semi-skilled (225 rupees), and skilled
(248 rupees).
• Industrial Disputes Act of 1947 - suggests the conditions that need to be
taken when terminating or laying off an employee who has served at least
a year over the employer
• Payment of Bonus Act of 1965 - offers payment to those who are employed
and are working hard providing the company with information and
productivity further advancing the company. = motivation and
competition within Sony employees for peak performance.
• Maternity Benefit Act of 1961 - covers the periods before and after they
have birth to a child. Companies pay for medical reasoning and
maternity absence.
• The Reserve Bank of India - Central Bank of India or the
“banker of banks” and regulates the financial and banking
system. Regulates economic stability of India.
• Banking Regulation Act of 1949 - involves monitoring all
transactions and banking business that is going on in India.
• Reserve Bank of India Act of 1934 – regulates infrastructure of
India
• Securities and Exchange Board of India Act of 1992 -
wants to make the country of India one of the best securities
markets in the world.
• Securities Contracts (Regulation) Act, 1956 and the
Companies Act, 1956 – laws that regulate the stock market.
Constitutional and Administrative
Government of India Act, 1935
Criminal
- Indian Penal Law – covers all crime in India & applies to any offense a Indian
citizen makes by land, air or sea.
- Code of Criminal Procedure in short explains the procedure that is to be
followed while prosecuting someone
Labor
Tort - This covers the Indian citizen from things like assault,
battery, trespassing, negligence, fraud etc.
Property – personal, property, real property
Trust
Indian Trust at 1882
Family
Hindu Law – set of personal laws that settle things like marriage,
adoption, inheritance and divorce.
Nationality
Citizenship Act of 1955 – law granting citizenship of India
Majority of trade by Indian Ocean.
77% of international trade by sea
Expected to be fastest growing economy.
8%.
India has 5th largest retail sector in the
world
Youth population
Economic downturn strengthened India
People from developed countries started
diverting their funds to India to draw
favorable and profitable returns since it is a
growing economy
Unemployment 7.8%
Youngest workforce among largest
economies
402,234,724 employed workers. 25.6%
women & 51.7% men
Self
Employed – different opportunities of
work
Non-Contractual workers
Unemployed seeking work
China = developed vs India = developing

40% of humanity and boast economies
Expanding booming economies
Two of world’s fastest growing militaries.
Large population shifts from very poor to
poor
Employees
Managers
2%
Engineers
20%
Factory Workers
41%
Human Resource
20%
Sales People
10%
Financial Servers
6% Expatriates
1%
Key measures:
• Goals
• Costs to our business
• Business Retention
• Employee Capacity
• Market Shares
Howwill we determine between
success/failure?
Chris Mattie, Steve Day, Matt Klingman, Mike Bridges, James Barrett

Executive Summary
The Sony business purpose in New Delhi, India, follows that of our parent company in
Japan, which is, “Make. Believe,” which shows Sony’s commitment to innovating beyond what
today measures as possible. Some highlights of the parent company are its annual revenue of
over 11 billion dollars, and opportunity for growth in the future, and hopes of becoming a
greener corporation that is environmentally friendly. The corporate structure is headed by
company CEO and President Howard Stringer and headquartered in Tokyo, Japan. The
international business strategy the parent company uses is to maximize the value of a firm as a
result of the ventures it makes. Due to the large size of the venture in India, a global
standardization strategy will be used, because the products of Sony are universal meaning the
product can easily be used worldwide with changes for language.
The marketing plan for our company is to end up taking over a large share of an
estimated $40 billion electronics market in India. The market has already been established in
the area, so our goal will be to make strategic acquisitions in order to break into the market
faster. We hope that our brand status in India will increase as people try and use our products
and see the high quality of what we are able to offer. Although in the first year we plan to
operate at a loss, the following years we believe that we can turn a nice profit, and as a result
our venture into India should go along with Sony’s international business strategy of maximizing
the value of the firm. In order to ensure that this venture is a successful one, we will closely
evaluate the customs and laws of India, which are known to be strict and inflexible. However,
due to the booming Indian economy, and its projected fast rate growth, we believe the benefits
of this venture outweigh the costs, and that is why we will be establishing a presence in India.


Sony Corporation
PARENT COMPANY HIGHLIGHTS
Name: Sony Corporation
Location: Tokyo, Japan.
Founded: May 7, 1946
CEO/President: Howard Stringer
Company Annual Revenue: $78.9 Billion (fiscal year ended March 31, 2009).
Number of Employees: 171,300 Employees worldwide (fiscal year ended March 31,
2009).
Type of Business: Electronics, Entertainment.

PURPOSE OF THE BUSINESS
“make. believe” ‐ Sony Corporation looks to provide the leading audio‐visual electronics
and information technology in the US and worldwide. Sony also is a leading motion
picture and television company in the world. Sony operates in five segments:
electronics, games, pictures, financial services and music. Sony has products in several
different markets but it looks to win over each one of them with the uniqueness in each
of its designs. With this uniqueness they hope to continue to reach the expectations of
the ever‐changing electronic and information technology markets. They employ over
171,000 employees all over the world and jobs include business development, corporate
development, corporate communications, marketing, SOX auditing and engineering. All
of these categories, especially engineering, include several positions that require
different skills and education.
PARENT COMPANY STRATEGIC PLAN AND GOALS
2‐Year Goals
Company Annual Revenue: $90 Billion by March 31, 2011.
Number of Employees: 200,000 employees worldwide.
Type of Business: Same industries except strive to go green.
Change Between Present and 2‐Year Goals

Company Annual Revenue: $11.1 billion (about $5 billion a year as the economy
begins to strengthen and company continues to cut costs)
Number of Employees: 28,700 more employees – unemployment rate will start
to fall and more and more business units will be established in markets where
Sony is not present.
Type of Business: No change, except becoming more green as the rest of the
companies in the industry do as well.
STATEMENTS FROM OUR CEO, HOWARD STRINGER
Mission and Action Plan:
“As I mentioned in my letter to you last year, our mission is to become a leading global
provider of networked consumer electronics, entertainment and services. To do this, we must
strengthen each of the pillars of our core businesses and be coordinated in our efforts to
innovate for further growth.
Innovation has always been one of Sony's celebrated strengths, and it is through
innovation that we will continue to develop the unique products, content and services that
deliver rich user experiences and inspiration to our customers.
This innovation is what has driven Sony's success in the past, and this in turn has driven
our brand‐one of the strongest weapons in our arsenal‐to what it is today. In a survey
conducted by Harris Interactive, Sony is ranked as the third most admired company, ahead of
all of our competitors, number three in the Business Superbrands survey of U.K. business
professionals and number four in the Brand Japan Survey.
To let this innovation drive Sony to new heights, we need to challenge our engineers,
designers and producers to enhance our exciting hardware with a new focus on the software
and content that will help establish our differentiation going forward, nurture an “Asset Light”
corporate structure and efficiently use our capital so that it will generate sufficient returns on
our investments.”
On Improving Our Financial Position
“The immediate and lasting improvement of our operating performance is crucial to
achieving our mission. The restructuring measures and other cost reductions I described above

are expected to reduce our costs by more than 300 billion.
In addition, Mr. Nakagawa has already announced initiatives that will substantially
reduce our procurement costs by consolidating our procurement activities across product lines,
reducing the number of component suppliers and optimizing pricing schemes.
Furthermore, we are continuing efforts to reduce costs and rationalize operations
across all divisions of the company. Additional points of focus include the streamlining of our
sales and marketing organizations, improving our inventory planning and supply chain
management, reducing our level of inventory, and returning the TV business, which has
struggled to make money despite achieving a very strong market share, back to profitability. By
further standardizing the design of our TVs worldwide, optimizing our LCD panel procurement
and shifting assembly to third‐party partners, we can increase our cost competitiveness while
maintaining the technological and design edge for which Sony is known worldwide.
These initiatives and others will improve our profitability and cash flow, but this is just
the beginning. Going forward, we must also be focused on how we use our capital and make
sure that our investments generate sufficient returns on capital. The more efficient we become,
the more resources we will have to incubate new businesses and to invest in the R&D and
acquisitions that will drive our innovation.”
STRUCTURE OF PARENT COMPANY OPERATIONS


INTERNATIONAL BUSINESS STRATEGY OF PARENT COMPANY
When we say strategy of a firm what we really mean is “the actions that managers take
to attain the goals of the firm.” (420). The main goal of this strategy should be to maximize the
value of the firm, or in other words increase profitability so that its shareholders make the most
money possible. Value is the key to the success of any firm. When great value is placed on the
products that a firm offers customers are willing to pay high prices to obtain them. Due to
consumer surplus the price actually charged is usually less than the value a customer places on
the product. Because firms are competing with one another the highest profits are reached
when value is created at the lowest costs. Firms can take two different perspectives when it
comes to an international business strategy. The first type of strategy is a low‐cost strategy
which focuses primarily on lowering production costs to achieve the highest profits. The second
type of strategy is referred to as a differentiation strategy. When firms take on this kind of
strategy they look to increase the attractiveness of their product so that customers will choose
them over the competitors no matter what the price charged. It is mentioned in the book that
“it is important for management to decide where the company wants to be positioned with
regard to value and cost” (423) so that the company is working as efficiently as possible. To
maximize its profitability a firm must do three things: first they must choose a position on the
efficiency frontier so that there is enough demand in that particular area to support their
decision; second, they must configure their operations to support that position; and last, the
firm must be sure that their organizational structure is right so that the strategy can be
executed.
When firms decide to go international with their business they face two competitive
pressures. They include pressures for cost reductions and pressures for local responsiveness.
Pressures for cost reduction force a firm to try to lower the costs of value creation, and there
are a few ways on how they can do this. One way could be to mass produce a standardized
product in a location around the world which takes advantage of factors such as economies of
scale, learning effects and location economies. A firm can also outsource to places where the
cost to manufacture their product is much lower. This allows them to make more of a profit on
each unit of production. Pressures for local responsiveness arise from several different sources.

These sources include differences in consumer tastes and preferences, differences in
infrastructure and traditional business practices, differences in distribution channels, and
demands from the host‐government.
When firms compete internationally they can choose between four different strategies:
global standardization, localization,
transnational and international.
Deciding which strategy to approach
will be determined by the amount of
pressures for cost reduction and local
responsiveness that the firm faces.
Firms may choose a global
standardization strategy when they
want to increase profitability by
obtaining cost reductions through
economies of scale, learning effects
and location economies. In other
words, this firm wants to “pursue a low‐cost strategy on a global scale.” (436). Normally a firm
taking this route will offer a standardized product that can be mass produced at a low cost. On
the other side of the “spectrum” is a localization strategy. This particular strategy does not
focus much on cost reductions. Instead the firm will look to increase their profitability by
offering a customized product to match the host country’s tastes and preferences. The third
type of strategy is referred to as transnational. This type of strategy is used when the firm is
faced with strong pressures for both cost reduction and localization. They look to reduce costs
while simultaneously trying to satisfy the local tastes and preferences. This strategy becomes
less viable when competitors are present in the market. The final strategy is called an
international strategy. When a firm is confronted with low pressures for both cost reductions
and local responsiveness they may take on an international strategy. Like with a transnational
strategy this type becomes less possible as competitors begin to emerge.

As for our particular company, Sony Incorporated, they will be taking on most likely a
global standardization strategy. They will not be trying to customize their products or marketing
strategy for their international markets because this will raise costs. Many of the products and
services offered by Sony are universal, meaning besides language the product can be used
worldwide. A term that the textbook uses is “universal needs”. These “exist when the tastes
and preferences of consumers in different nations are similar if not identical.” (434). The
international business strategy for Sony will have to take into account political factors,
economic factors, leadership and interpersonal skills and also functional factors. Politically, they
need to determine if their international investment will be feasible in the host‐country. This is
similar to what Google is experiencing in China. China’s government does not allow for
censorship and this is one of the founding principles behind Google’s business. They also need
to take into account some of the host‐country’s regulation regarding international business.
There may be regulations that address national security, protecting jobs and industries, human
rights, and preserving businesses within the country. When it comes to economic factors there
are many questions that need to be answered before starting a business up in a foreign market.
The first question Sony needs to answer is how this investment will be funded. What Sony will
be doing to fund our particular business unit in New Dehli, India will be to borrow the money
and pay a certain amount per year plus interest. Another economic issue that must be dealt
with is currency. The headquarters of Sony are located in Japan, which has Yen for currency.
Our business unit is located in India which has the Rupee. Sony needs to decide how money will
be exchanged between the two locations and how this can be done at the least cost. Also, Sony
needs to determine if the cost of opening a new division in New Dehli will be less than the
benefit received. More importantly, does a market even exist for the products that are offered
by Sony? They will need to perform some studies and perhaps conduct a few surveys to
determine whether they will be able to sell their products at their normal prices and in the
same quantities. We will be using expatriate managers to start up the business in India. These
managers will be chosen from Japanese headquarters that have experience with the company
and industry. They will need to go through training in order to learn and understand the values
and attitudes of the Indian people. This will ensure that misunderstandings will be less likely to

happen between the two cultures. Sony will use four attributes to make sure the best people
are selected to manage the new division. They will look at self‐orientation, others‐orientation,
perceptual ability and cultural toughness. As the business begins to strengthen we will promote
from within the company and expatriate managers will begin to return to headquarters in
Japan. One thing we will make sure not to do is to take these managers out of India before the
business is ready to run on its own. This is a common mistake with many foreign subsidiaries.
The main goal of expanding into this new market is to reach out to more potential
customers. New Dehli is the capital of India and is populated by over 300,000 people. As Sony
continues to compete in its industry it will help to gain more of a market share. These
customers can boost Sony’s revenues and increase their brand awareness as well. A good part
about the country of India is that the majority of the population is able to read and speak
English, so therefore manufacturing of the products will not have to be altered much from
those that are manufactured in the US. This can cut down on costs and therefore increase
revenues.
We can see below a chart which maps out our plans for when we move into this new
market in India:

BUSINESS UNIT ORGANIZATION CHART
SEE APPENDIX

MARKET PLAN
Our product goals for our market plan are to take a large share of an up and coming
electronics market in India. India is a middle class country that has recently benefited from
rapid economic growth. According to an evaluation of the Indian electronics market in dollars, it
is valued at roughly $40 billion in 2010. Key players in the market are largely national
businesses and some foreign companies so we hope to tap into the market with the power of
our brand recognition. Therefore, our goal is to acquire a few of the smaller already established
electronics firms in the area, and to gain about 10% of the market share, being four billion
dollars and to increase that number greatly in the following years.
In regards to our brand status, we have already achieved worldwide recognition as Sony
is a large and profitable corporation from Japan to the United States. However, we realize that
because of our lack of a presence in India many might have never been exposed to our products
and therefore we can expand our status here in India. Therefore, by joining together in a few
small joint ventures, we can acquire the already established electronic market of India faster.
Therefore, we hope to increase brand awareness and status through advertisements and sales.
Once the market is exposed to our product and actually uses it, we believe our superior
products will prevail and our image in the market will increase greatly.
CAPITAL INVESTMENT (FDI) PLAN
The money that must be budgeted in the first three years will be substantial with the
large amount of market we are going to try to acquire, as well as the breath of operations we
will be operating. We believe that in the first year we will have to spend the most due to our
plan of acquiring several smaller Indian electronic firms. We believe the first year our total
expenses should be eight billion dollars to set up acquisitions, pay salaries, create
infrastructure, launch advertising in India, make products, and to offer customer service as well
as to research Indian compliance laws. Then we believe for the following year we need to
budget two to three billion dollars, and the third year about two billion maintenance expenses
as well as the previous expenses mentioned, with the reason for the drop in budget resulting
from no acquisitions and less need to set up additional infrastructure over the years.

We believe that the return on capital for the first year will be negative. This is because
the startup costs should be high (as stated eight billion dollars) and we only plan to bring in
total revenue of four billion. Therefore, we believe we will operate at a loss of four billion for
the first year of our venture. However, after that as the market share increases and the
expenses decrease we believe that in the next two years we can operate at a profit. The second
year we feel that a slight profit will be possible, and the third year we believe that a strong
profit can be achieved.
WHO IS REPSONSIBLE FOR THIS PLAN?
The mergers and acquisition department would be in charge of making this plan go into
effect by partnering with the small joint ventures throughout India. By allowing this department
to facilitate this acquisition not only does it allow for Sony to expand into the Indian market
place but it also allows for the increase in market share as well as capital gains. The marketing
and advertising departments would be in charge of targeting the consumers and getting our
company noticed everywhere people look, we want the marketing department to make our
products stick in the minds of as many consumers in the Indian marketplace as possible.
HOW IS THIS PLAN MEASURED
Both our marketing as well as capital investment plan would be measured in quite a few
different ways. The first of which would come down to overall market share and placement in
the world marketplace so far. This would give us a good idea of how our products and our
company are viewed by others across the globe. The second way in which we can evaluate and
measure these strategic plans would be to look and previous financial records to find out which
products as well as services created the most capital for our company. Once we have
accomplished those tasks we can pass that information on to the marketing and promotional
divisions of our company who can then start establishing interest as well as an increase in
market traffic towards our products.
COMPANY FLOWCHARTING

Japanese Indian
Exporter Importer
Bank of Bank of
Tokyo New
Dehli

Flowcharting Steps for Sony Subsidiary in New Dehli, India:
1. Goods are ordered from subsidiary in India.
2. Japanese headquarters agrees to fill order request.
3. New Dehli subsidiary arranges for a letter of credit from Bank of New Dehli.
4. Bank of New Dehli sends letter of credit to Bank of Tokyo.
5. Bank of Tokyo informs Sony Headquarters about letter of credit receipt.
6. Order is shipped from Japanese exporter to New Dehli, India.
7. Japanese exporter presents draft to Bank of Tokyo.
8. Bank of Tokyo presents draft to Bank of New Dehli.
9. Bank of New Dehli returns draf once it has been accepted.
10. Japanese exporter sells drafts to bank.
11. Bank of New Dehli inform Indian subsidiary that documents have arrived.
12. Sony of New Dehli pays Bank of New Dehli.
13. Bank of Tokyo presents a matured draft to Bank of New Dehli and receives final payment.
The letter of credit is the most important part of the international transaction. This document
states that the bank will pay a specified sum of money to the exporter on presentation of particular
documents, in our case the draft. Using banks on both sides of the transaction cuts back on the chance

that one side may not pay or that goods ordered may not be shipped. Documents that are created
ensure that what the subsidiary orders is what is going to be delivered, and the price for these goods will
be known by both sides of the transaction. The subsidiary in India agrees to pay the Bank of New Dehli,
which in turn pays the Bank of Tokyo that finally on presentation of a draft pays the headquarters of
Sony in Tokyo.
CULTURAL DIFFERENCES
SEE APPENDIX
INTERNATIONAL ISSUES FOR OUR UNIT
Labor Laws
Sony Corporation wants to expand into the global market by doing business with its unit
in New Delhi, India. India has a lot of laws that deal with our business. We have to make sure
that we follow and abide these laws of India as well as other global countries’ laws in order to
run a successful International Business. What this section will include are both the state and
central laws and why it is important to take these laws into consideration.
Overall India’s labor laws are strict and inflexible. There have been signs of lack of skill
among the employed. This is important because how is a business supposed to succeed if the
labor force is not at par with other businesses’ workers. An explanation of India’s labor laws
are as follows; The Workmen’s Compensation Act 1923. This act is covered to all of India and it
details us that if a worker during his time of employment is suffering from a severe injury or to
his dependents is in the case of death, compensation at his or her rate will be received to the
dependents of the workmen. Basically the Workmen’s Compensation Act of 1923 is saying that
an employee is covered compensation if he or she suffers from any kind of disablement,
occupational disease or death.
Another labor law is the Minimum Wages Act 1948. This act ensures that workers
receive a minimum wage for their work efforts. It helps prevent labor exploitation through low
wage payments. The minimum wage has grown significantly since the nineties. The National
Floor Level Minimum is 100 rupees. Both the Central and State Governments minimum wages
are revised. Different states have different minimum wages. In our case Delhi has separated

minimum wages based on your skill set. The categories are self explanatory there labeled
unskilled (203 rupees), semi‐skilled (225 rupees), and skilled (248 rupees). Sony uses this
system since they are based out of New Delhi. Along with this Act another major law is the
Payment of Wages Act of 1936. This act just explains that every person that is employed should
be paid by the employer and he is responsible for getting that payment to the employee.
The Industrial Disputes Act of 1947 suggests the conditions that need to be taken when
terminating or laying off an employee who has served at least a year over the employer. They
should be given a one month’s notice in writing along with reasoning for the lay off and for
every year they have worked in service, an additional 15 days of pay. This act has significant
because it is important to give the employee a good portion of time to maybe find a new job or
jobs. Also this gives the employee some money to tend to his or her family if they have one.
The Payment of Bonus Act of 1965 offers payment to those who are employed and are
working hard providing the company with information and productivity further advancing the
company. The Payment of Bonus Act of 1965 only applies to those businesses with twenty or
more personnel. Also under this act, bonuses have to be either one hundred rupees or at least
8.33% of an employer’s salary. We like to give bonuses to our employers as a reward for their
hard work. With this we hope to establish motivation and competition within our unit among
our working personnel so we can run the best business out there.
The Payment of Gratuity Act of 1972 provides payments of gratuity to all employees in a
business unit as long as the business unit has ten or more different types of workers. When an
employee retires or resigns from his job he will be granted a payment of gratuity. The amount
of gratuity an employee receives is based on his salary for fifth teen days multiplied by how
many years of service he has given his or her company. The maximum amount of gratuity one
can receive is 350,000 rupees which is approximately $7780.
The last major labor law that has to do with India is the Maternity Benefit Act of 1961
and it covers the periods before and after they have birth to a child. Since more women are
entering the workforce this benefit is getting more popular. This act grants maternity benefits
for every women employee who has worked in a business for at least eighty days after her
expected delivery date. This requires the company to pay for medial reasoning and allow

maternity leave. Sony wants to be fair to its female employees and wants to be there to help
the best they could in certain situations.

Financial Laws and Regulations
According to the Embassy of India, “India has a financial system that is regulated by
independent regulators in the sectors of banking, insurance, capital markets, competition and
various services sectors. In a number of sectors Government plays the role of regulator.” The
Reserve Bank of India is the Central Bank of India or the “banker of banks” and regulates the
financial and banking system. It regulates the economic stability of India. Also, it prepares
economic policies and ensures suitable exchanges in currency. There are two different laws
that authorize the Reserve Bank of India bank sector in India; The Banking Regulation Act of
1949 and the Reserve Bank of India Act of 1934. The Banking Regulation Act of 1949 involves
monitoring all transactions and banking business that is going on in India. A “banking company”
is noted as any business that does banking in India. The Reserve Bank of India Act of 1934 is
just another act that regulates the infrastructure of India. In order to make transactions with
other businesses, Sony will probably want to work with the Reserve Bank of India because it is
the “banker of banks”.
The Securities and Exchange Board of India Act of 1992 wants to make the country of
India one of the best securities markets in the world. This has been revised many times to the
improvements of securities markets in the world. The Securities and Exchange Board of India
Act of 1992 regulates India’s capital markets. Under the supervision of the government India
has twenty three stock exchanges; The Stock Market, Mumbai and the National Stock Exchange
being the most popular. The laws that regulate these stock markets are the Securities Contracts
(Regulation) Act, 1956 and the Companies Act, 1956. These acts prevent undesirable
transactions in securities by regulating the business of India making sure protection is made
against fraud or unknown errors. These are important for Sony because of the stock market.
Sony wants to be able to contribute to the securities markets of India. Sony wants its
customers to know that it is one of the best business units out there for them to purchase
items.

Political Laws/ Common Law/ Statuary Law
India’s government or called the Central Government consists of twenty eight states and
seen union territories called the Republic of India. It is located in the capital New Delhi where
Sony is also located. Like the United States, the government consists of an executive, legislative
and judicial branch. In order to keep peace in India they have set of laws that the people
should abide by. The major civil and criminal laws that are set for the people are determined in
parliamentary legislation. Some of the major laws and codes that determine the civil and
criminal justices can be found in the following; Indian Penal Code of 1860, the Code of Criminal
Procedure of 1973 and the Code of Civil Procedure, 1908. These set the standards that the
people of India should follow. The Indian Penal Code addresses need for changes in society.
This code also is the basic governing statute for determining criminal liability. The Code of
Criminal Procedure in short explains the procedure that is to be followed while prosecuting
someone. These are all a part of the common laws of India. These basic common laws are
known and put into action throughout the republic of India. When we talk about these “basic
laws” we are talking about laws that have to do with everyday things like penal and criminal
laws, adoption laws, civil procedure and marriage and divorce laws. The legal system as
applicable to the federal and individual state governments is based on the common law and
statutory law.
Another thing that Sony has to be aware of is the different religions that are practiced.
India is a diverse group of people when it comes to religion. Hinduism, Islam, Christianity and
some Buddhism is practiced in India. The majority of the population, approximately eighty
percent, practices Hinduism. People of different religions also have different opinions on own
personal laws like marriage and adoption. “The British maintained a policy of non‐interference
with custom and personal laws, and so it was decided that Hindus were to be governed by
Hindu Law and Muslims, by Muslim laws. The British administration attempted to give a
framework to these laws by enacting specific legislations governing various religions. Few
examples are the Indian Christian Marriage Act, 1872, Parsi Marriage and Divorce Act, 1936,
Dissolution of Muslim Marriage Act, 1939, Hindu Marriage Act, 1955 and the like. The term

‘Hindu’ has been viewed flexibly to include Sikhs, Jains and Buddhists.” This is important when
dealing with customers. If they have special ways or specific hand gestures that they use.
Language is important because something in one culture can mean a whole different thing in
another country, even something offensive.

KEY CONSIDERATIONS
Things important to your particular industry/business
One of the most important things we will need to be assure of is if the population of
India will be able to purchase our products. Sony carries many high end products, such as
Playstation 3 and LCD TV’s, but with the savings we will be experiencing with many of our
expenses we will be able to price many of these products much lower. This will give the
population a greater purchasing power with the money they have when it comes to our
products.
Things important to your geographic and environmental interests
India’s geographic location leads little trade by land. However it is a different story
when it comes to trade by sea. Located on the Indian Ocean gives it plenty of trading
opportunities with the countries around India. Approximately seventy seven percent by value
of India’s international trade is done by sea. India being primarily a country with an enormous
coastline has a huge share in the annual economic growth report. Sony will take benefit in
exporting its products to other countries. Sony will do whatever is the most efficient way to
customer satisfaction.
Economic considerations
India’s economy is booming and is expected to be the fastest growing economy this
year. It is projected to grow eight percent in 2010. “The slow pace of reforms in critical areas
had affected India's growth in the past years. However, the re‐elected Government has
promised to bring about desired reforms in infrastructure, social sector and financial sector.”
(Mishra) This will help Sony significantly. India has the fifth largest retail sector in the world.
The economic boom is expected to grow at a rate of ten percent. As the youth population is

also growing Sony will greatly benefit from this boom because of the electronics and things that
kids are attracted to. This will be one of Sony’s biggest benefits to doing business in India.
Financial considerations
India is a country that is developing. It is not a country that is already developed. Sony must
take this into consideration because they may not be accustomed to development. Financial
advisors are making way into the country as the economy starts to boom. Merger and
Acquisition advisory firms are helping businesses in India. Sony will look into these m&a firms
to handle long term investments and finances. The developed economies were worst affected
by the global economic downturn. India's investment on the other hand was able to face
downturn and it had placed itself in a very strong position compared to other countries. People
from developed countries started diverting their funds to India to draw favorable and profitable
returns since it is a growing economy. A balanced profit and loss approach has made a ground
for both the domestic and the foreign investors to find India a secure place for investment.
Political considerations
Workforce demographics
The India workforce has an estimate unemployment rate of 7.8%. India also has the
youngest workforce among the largest economies in the world. There are currently
402,234,724 workers in India that are employed. Of these workers employed 25.6% are
women. Men account for 51.7% of this number. The younger workforce will have significant
benefits to Sony. Injuries will occur less because of age and maximum work potential will
happen since they are a younger workforce.
Labor Market
The labor force can be divided into four categories; self employed workers, wage and
salary earners, casual workers and those who are unemployed. The labor market is most

loosely connected to the self‐employed because of all the different opportunities of work.
Laborers who are not on contract work with the labor market from a day to day basis. The
unemployed who are also seeking for work have a close relationship with the labor market.

Competition
India’s main competition is that of China. This can signify the world’s most important
relationship since they are both growing enormously. According to Time Magazine, “China and
India comprise 40% of humanity and boast economies that are expected to loom large over the
21st century. They also represent two of the world's fastest‐growing militaries, armed with
nuclear weapons, and are expanding their spheres of influence across oceans.” With large
economies booming and natural resources everywhere there could be conflict between India
and China. Both countries are looking to expand global market so watch for these two
countries to try and get potential customers. As a business unit Sony needs to be able to reach
out to its customers.
INTERNATIONAL BUSINESS DEVELOPMENT
Like any new company that opens up our business unit in New Dehli, India will need
hundreds of new employees. These employees will range from managers all the way down to
sales people within our stores. The majority of new hires will be working in our manufacturing
department where most of our products will be made. They will be making video games and
consoles; different electronics like TV’s and satellite radios, and also DVD’s. The managers that

will actually oversee the company will be expatriates chosen carefully from headquarters
located in Tokyo, Japan. In addition to these managers we will also have managers hired from
the host‐country to serve in different departments such as finance, sales, R & D, budgeting,
acquiring, customer relations, technical support, repairs and international business. We will
also need for sure engineers that will develop our products, and many of these will be hired
right from India where the job pool is very rich in knowledge.
Sony Corporation (New Dehli, India)
Employees
Managers
2%
Engineers
20%
Factory Workers
41%
Human Resource
20%
Sales
People
10%
Financial Servers
6% Expatriates
1%

SUCCESS FOR INTERNATIONAL BUSINESS ACTIVITY METRICS FOR OUR BUSINESS UNIT
For success to occur, we must project several key measures in our business plan. To
ensure that we are profitable, some aspects we must foresee include: the outcomes of our
business, costs acquired, business retention, employee capacity, and market share. It is crucial
to be able to predict all expenses so that you can eliminate the unknown and project your
future earnings. Without this knowledge in a global market, hidden expenses could result in a

net loss and without proper planning, could ultimately result in bankruptcy. Like all other
companies in the world, the main goal of this business unit is to make money. Shareholders
invest their capital into firms with the hope that they will make a return on their investment. In
the first few months of this subsidiary we hope to minimize our costs by preparing for it as
much as possible prior to its opening.
Above all else, on the final line of our income statement we want to project profit. For
this outcome to occur we need to carefully manage each of our divisions within the business,
including marketing, financing, engineering, and human resources. For this to happen we must
hire experienced managers to train and expand our employees. We are projecting to lose
money in the first year as the business settles in but in the coming years we will turn a profit.
Currently our staff totals around 171,000; however our two year goal is projected at 200,000.
So we must factor in the future costs of salaries. Costs are a very broad area, and include many
components. Labor costs are the highest expense that a business faces so we will make it a
necessity to hire only workers that are qualified and will help the company in the long‐run. We
do not want employees that will quit within a few months because it will cost us huge amounts
of money to replace that person when we have to train a new employee. To prevent this from
happening, we will have a strict screening process prior to hiring new employees so to see if
they are truly qualified. We are attempting to maintain a low‐cost strategy on a global scale so
we can increase profitability and hopefully adapt to foreign cultures. By using the joint‐venture
technique, we will have access to local partner's knowledge as well as sharing development
costs and risks. This helps reduce the costs, coinciding with our "low‐cost strategy".

By entering a foreign market there is a high potential for a large market share. Being one
of the largest distributors of electronics, we intend to dominate the Indian market in our joint
venture. We project for a 2 year goal of maintaining 30% of the market with Sony products.
With about a third of the market, we can reduce costs on advertising and use brand equity and
product placement. Many believe that globalizing a business can hurt the business overall, but
as our unit in New Dehli improves and begins to make a profit it will only help the company as a
whole. They will become more successful and have more cash to invest in such things as
research and development, and other capital investments.
We will set annual goals for the first two years of this business unit’s opening and
compare actual results to these goals. If these goals are not met we must rethink our strategy
so that changes can be made. New managers may have to be brought in, and new marketing
campaigns could be created. If these goals are met, and even passed, the employees and
especially top managers will receive bonuses for their superior work. If we set goals prior to the
unit starting business we can determine at what point the expatriate managers will be able to
return home to headquarters in Tokyo. This will ensure that expatriate failure will not occur and
they will leave when the business is ready to run on its own.


Works Cited
Hill, Charles W. L. International Business: Competing in the Global Marketplace. Boston:
McGraw‐Hill/Irwin, 2009. Print.
Indian History, India History, History of India. Web. 29 Apr. 2010.
<http://www.indhistory.com/>.
Sony Style USA | Sony VAIO® Computers | Sony Consumer Electronics. Web. 29 Apr. 2010.
<http://www.sonystyle.com/webapp/wcs/stores/servlet/StoreCatalogDisplay?storeId=1
0151&catalogId=10551&langId=‐
1&XID=O:sony:dg_brand_gglsrch:ad_3259234534:mt_exact>.
Mishra, Neena. "India Projected to Be the Fastest Growing Economy in 2010."
Seekingalpha.com. Web.

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