Rise and fall
Sony vs. Samsung: The Inside Story of the Electronics Giants' Battle for Global Supremacy
By Sea-Jin Chang
Wiley, $27.95
When the mighty fall, new giants rise. In a world of globalised commerce, the question is: how? This is what interests Sea-Jin Chang, a professor of business administration at Korea University, in this study of the slow decline of Japan's Sony and the ascension of South Korea's Samsung.
He brings an impressive array of statistical data to the task, examining the shift from analog to digital technology as a key part of the story. Sony, which had a legacy of successful innovations and a deep R&D commitment to a number of analog-based projects, was slow to understand the transition, sticking with products like the Trinitron television system long after they had been surpassed.
Part of the difficulty in shifting direction was its sheer size and complexity: its operations ranged across games, appliances, films, electronics and television. This might have generated crucial synergies, but according to Chang, Sony's rigid divisional structure prevented such thinking. On top of this were personnel problems at senior levels, Chang notes, as the company struggled to make the transition from family ownership to professional management.
The way Chang sees it, Samsung was much more able to see the opportunities of the digital era. Mainly an exporter of cheap Original Equipment Manufacturing (OEM) products until the early 1990s, it leveraged its expertise in chips to leap into the Dynamic Random Access Memory (DRAM) business, applying the technology across a range of products.
During the 1990s the electronics industry was becoming prone to commodification. Chang suggests that this played against Sony's dependence on stand-alone product breakthroughs and towards Samsung's fast-adopter attitude.
So is the story about the wrong ideas at the wrong time? Chang thinks not: Sony's failure was not strategy but execution. A unified management team might have identified the problems and led the way forward, but unity was lacking.
Samsung emphasised military discipline from a no-questions central command. It did not really have a plan, but grabbed opportunities as they arose. This points to problems down the track, according to Chang, especially as the company is now in a leadership position, with no one to benchmark itself against.
Sony might, in fact, be better placed for the future, Chang thinks. It seems to have settled its leadership issues, has re-focused on its core strengths, and it retains a huge presence in the marketplace. The contest is not yet over.
Chang makes this two-track story both interesting and convincing. A working knowledge of the electronics business would deepen an understanding of the book, but there are also plenty of insights for the general reader.
The Airport Economist
By Tim Harcourt
Allen & Unwin, $24.95
Economics might be a dismal science but Harcourt, chief economist with the Australian Trade Commission (Austrade), approaches it with a good sense of humour. He has travelled the world to promote Australian industry, but he seems to like Asia the most. In The Airport Economist he mixes hard-headed analysis with anecdotes about cricket-based diplomacy in India and Australian ballet dancers in China. He identifies Vietnam and South Korea as countries that are particularly dynamic, although he has interesting things to say about Australia's growing links with Thailand and the booming area of education-related services. It adds up to a book that can be read for serious business research, or just for fun.
2011: Trendspotting for the Next Decade
By Richard Laermer
McGraw-Hill, $39.95
This book has some interesting things to say about the future, but few of them have any basis in scientific forecasting.
Laermer is more like a grumpy old man, forthright in his views of what he dislikes and why it matters. The past few decades, he says, have seen the elevation of mediocrity into a sort of egalitarian dogma, driven by short-termism, sound-bite politics, and uber-cool irony. But all this has reached the point where the daily functions of life and business have become dangerously difficult. Hence, Laemer forecasts (and hopes for) a return to useful things like good business planning, responsiveness to customers, and decent work for decent money. It would be unwise to take 2011 seriously, although it might be also unwise not to.
Reference: August 2008, volume 78:07, p. 77
