Sony Case
Sony: Managing the international R&D network
1. How did Sony internationalize its R&D activities? What were the initial motivations for Sony to establish technology centres abroad? How would Kuemmerle categorize the R&D centres at Sony?
Sony started to internationalize its activities in the 1950s, but in an incremental and cautious way. Because they thought, that “you must first learn about the market, learn how to sell it, and build up your corporate confidence before you commit yourself. And when you have confidence, you should commit yourself wholeheartedly.” They first exported products, then set up manufacturing plants close to markets when sales took off, and after that they also internationalized their R&D activities.
They established technology centers abroad when the overseas sales and manufacturing subsidiaries were successful. They established these centres to solve problems faced by local sales and manufacturing activities, especially requirements to modify products for local markets and to provide technological support to overseas plants.
These centres will be categorized to “home-base exploiting subsidiaries”, according to Kuemmerle. This is home-base exploiting because the information they had is transported to the R&D centre, and the top managers of those plants were the ones with the power to decide what R&D projects to pursue. And the home country has less power on this R&D centre.
2. How have the motivations for internationalizing R&D changed over time?
First these motivations were solving problems faced by local sales and manufacturing activities, but later on these motivations changed into the fact that problems were solved in concentrated clusters, since tacit knowledge is hard to transfer.
3. Why did Sony feel the need to internationalize its R&D activities in the late 1980s and early 1990s?
They felt this need because 30% of Sony’s total production was produced overseas, and foreign sales represented 70% of Sony’s total sales.
1. How did Sony internationalize its R&D activities? What were the initial motivations for Sony to establish technology centres abroad? How would Kuemmerle categorize the R&D centres at Sony?
Sony started to internationalize its activities in the 1950s, but in an incremental and cautious way. Because they thought, that “you must first learn about the market, learn how to sell it, and build up your corporate confidence before you commit yourself. And when you have confidence, you should commit yourself wholeheartedly.” They first exported products, then set up manufacturing plants close to markets when sales took off, and after that they also internationalized their R&D activities.
They established technology centers abroad when the overseas sales and manufacturing subsidiaries were successful. They established these centres to solve problems faced by local sales and manufacturing activities, especially requirements to modify products for local markets and to provide technological support to overseas plants.
These centres will be categorized to “home-base exploiting subsidiaries”, according to Kuemmerle. This is home-base exploiting because the information they had is transported to the R&D centre, and the top managers of those plants were the ones with the power to decide what R&D projects to pursue. And the home country has less power on this R&D centre.
2. How have the motivations for internationalizing R&D changed over time?
First these motivations were solving problems faced by local sales and manufacturing activities, but later on these motivations changed into the fact that problems were solved in concentrated clusters, since tacit knowledge is hard to transfer.
3. Why did Sony feel the need to internationalize its R&D activities in the late 1980s and early 1990s?
They felt this need because 30% of Sony’s total production was produced overseas, and foreign sales represented 70% of Sony’s total sales.