With all the hype these days about companies like Apple, Google, Amazon, and Samsung, it’s
hard to remember that companies like Sony once ruled. In fact, not all that long ago, Sony was a
high-tech rock star, a veritable merchant of cool. Not only was it the world’s largest consumer
electronics company, its history of innovative products—such as Trinitron TVs, Walkman
portable music players, Handycam video recorders, and PlayStation video game consoles—had
revolutionized entire industries. Sony’s innovations drove pop culture, earned the adoration of
the masses, and made money for the company. The Sony brand was revered as a symbol of
innovation, style, and high quality. Today, however, Sony is more a relic than a rock star, lost in
the shadows of today’s high-fliers. While Sony is still an enormous company with extensive
global reach, Samsung overtook the former market leader as the world’s largest consumer
electronics company a decade ago and has been pulling away ever since. Likewise, Apple has
pounded Sony with one new product after another. “When I was young, I had to have a Sony
product,” summarizes one analyst, “but for the younger generation today it’s Apple.” All of this
has turned Sony’s “Make. Believe.” brand promise into one that is more “make–believe.” Sony’s
declining popularity among consumers is reflected in its financial situation. For the most recent
year, Samsung and Apple each tallied revenues exceeding $170 billion—more than double
Sony’s top line. Samsung’s profits have surged in recent years while Sony’s losses reached
catastrophic levels. And whereas stock prices and brand values have skyrocketed for
competitors, Sony’s have reached new lows. Adding insult to injury, Moody’s Investors Service
recently cut Sony’s credit rating to “junk” status. How did Sony fall so hard so fast? The answer
