Book Summary on The book " Made in Japan " ,author of the book is Akio Morita. short summary of the book in Pdf format. entrepreneur story , MBA project on Innovation and Entreprenurship

1. MADE IN JAPAN – AKIO MORITA
New company was formed on May 7, 1946, in Tokyo called Tokyo
TelecommunicationsEngineering corporation, which we call it as Sony
Corporation by some Twenty people on the Third floor of a bombed out
department store in downtown Tokyo. The founders of Sony were Akio Morita
25 years old, having physics background, Masaru Ibuka, 38-year-old electronics
designer.
The devastation of Tokyo after the Secondworld war and due to dropping of
an atomic bomb on Hiroshima on August 6, 1945 was extensive, with an
estimated 46 percent of the population having had their houses and factories
destroyed. To earn money to survive newly recruited employeesof Tokyo
Telecommunicationsworked on a Rice cooker, which used the electrical
connectivity of wet rice, but once the rice was cooked, it would no longer be
moist and thus the electrical circuit would be broken. Despite having so many
prototypes and testing, it was never released in the market.
So, Ibuka developed a short wave adapter that was fitted to AM Radio, which
enabled the listener to hear the short-wave radio broadcasts. The Product
yielded a positive response during the post war in Japan, these made them to
diversify into manufacturing of different parts like phonographs, small heating
pads and a variety of other products.
As Ibuka’s objective was always to manufacture High-Tech Equipment, therefore
when a tender for audio mixing units and studio broadcasting equipment by the
Japan Broadcasting Company, Ibuka submitted a bid which was accepted as he
had a close friend inside the company Japan Broadcasting, who was in charge
of engineering reconstruction department.
He saw a tape recorder machine created by Ampex and using magnetic tape
manufactured by Minnesota Mining and 3M, when he went to deliver the Mixing
unit to Japan Broadcasting. He managed to bring the tape recorder to his
factory, to give his workers live demonstration. Except the company accountant,
everyone liked the idea of going to manufacturing tape recorders.
Main hurdle was the company knew nothing about how to manufacture Magnetic
Tape. So, Ibuka, Morita and Nobtoshi kihara made efforts to learn how to
manufacture Magnetic tape. Initially they tried using Cellophane, but was
rejected due to material can be stretched too easily distorting the sound. They
also tried using craft paper as the base onto which the magnetic coating was

2. applied. Once they were able to source some better plastic material, they were
then able to start producing magnetic tape of consistent quality and durability.
First tape recorder of the company was launched in 1950, a big machine
weighing 35kg at 1,70,000 yen(US$470). The machine worked well, but nobody
had clue about what the tape-recorder is and what could we do with it. So
Morita to sell the tape recorders, demonstrated one machine to the Japan
supreme court, and they immediately bought 20 units since the stenographers
were in short supply. They also added a smaller, sturdier unit for schools so they
could add Japanese soundtracks onto the 16mm educational films being used, as
a result Sales increased gradually.
Company got caught up in patent dispute around this time. The new tape
recorders were built using an AC bias recording system, which was created and
patented by Dr. kenzo Nagai in Japan of Anritsu electic, a subsidiary of Nippon
Electric Company. So Ibuka and Morita bought half ownership of patent in 1949
and they learned that the application filed for U.S. patent on the technology
during 1941, but the application had never been processed due to the outbreak
of the war. Sony won the three-year court battle, which was going on when the
Balcom Trading Company of Tokyo imported some tape machines from U.S.,
which used the AC bias recording System.
Company’s goal was to produce a radio small enough to fit into someone’s
pocket, which would have never been possible without transistors. For this to
happen Morita went on tour to the United States and Europe in search of new
ideas for their company, whereas Ibuka worked on developing high – frequency
transistors which could finally be used to produce a compact, transistor radio. So
in 1953, a licensing agreement for the transistor was signed by paying a
licensing fee of $ 25000.
Ibuka and Morita wanted to come up with a new name for their company. The
company current name in Japanese was Tokyo Tsushin Kogyo Kabushiki Kaisha -
a real mouthful. Since the English translation – Tokyo Telecommunications
Engineering Company was not much better, it was decided to think of a
completely new name. they first came up with a name “SONNY”. Due to the fact
in Japanese. “SOHN-NEE” means to lose money,therefore eventually rejected it
because sound in ‘Latin’ was Sonus, the Japanese had a slang word for bright
sound they called “SONNY”. Finally, they came up with a name for the company
“SONY” because it didn’t mean anything in any language and therefore was
made available in all countries in the world.
Sony released the first transistor radio in 1955 and its first small pocket
transistor radio in 1957. By 1958, the company’s name was changed to SONY
CORPORATION and in by end of 1958, the company was listed on the Tokyo
Stock exchange. During this time, SONY CORP had great difficulty in handling

3. financials to fund company’s growth in spite of having connections with former
chairman of Mitsui Bank and former cabinet ministers and other business on its
Boards of advisors.
Sony was continually being first to market with new innovations, such as transistor
radio and first solid state TV set in 1959. Due to this company got a reputation
as the ‘GUINEA PIG’. Sony would take advantage of being first into the markets,
where ad other manufacturers would sit back and see whether markets emerged
for those products. To keep Sony at the leading edge, up to 10 percent of the
company’s sales were committed to research and development.
Most of Japanese companies tend to work through Japanese trading companies
to develop international sales operations. But Morita decided Sony would set up
its own sales offices being the first one to be established in New York. Morita
also resisted the urge to move the company into OEM deals – making a radio
and putting someone else’s brand name on it, as he was more focused on getting
a Brand Recognition for Sony.
Morita slowly build up a network of trusted advisors who were familiar with the
American business scene and who would could give a more likely suggestion on
how to build a business there. His network comprised of Business associates from
various manufacturer’s, lawyers and accountants. By 1960, about half of Sony’s
turnover was from markets outside Japan. To develop its own sales network and
to act as a distributor for Sony products, they decided to form a U.S. Subsidiary
called Sony Corporation of America. With a market share capital of $500,000,
the company was established in February 1960.
In late 1960, Sony corporation decided to raise equity funding in U.S. capital
markets by selling Sony commonstock as American Depositary Receipt. The stock
offering was highly successful, raising more than $4Million. Sony also opened
new showroom in Ginza district of Tokyo,where people could get familiar with
Sony products without any sales pressure.
Sony continued to diversify its range of consumer electronics by adding more
products. In 1969, the Sony U-Matic video recorder was released, featuring
three quarter inch wide video tapes, whereas earlier videotape units were
large, expensive and used mainly by broadcast stations. Sony then perfected a
home video unit, using a self-contained half-inch video tape cassette about the
size of a book.
Sony entered the Desktop calculator market, but discontinued it as future
projection about the number of companies were planning on entering that
market which would force the company to provide discounts on its products to
secure a market share. In colour television technology, Ibuka had a team working
on the technology called Trinitron – an innovation in which the electron beams

4. generating the TV picture were packaged in one compact, highly efficient unit.
The new technology was introduced in 12-inch and 7-inch TV sets, which was a
niche markets which the competitors ignored and movedon to colour TV’s.
Since the inception of Sony Corporation of America, Sony established Sony
Overseas and operated in Zug, Switzerland to handle marketing of Sony
products in Europe. They also established in United Kingdom, Germany and
France as Sony UK, Sony Germany and Sony France. They also opened
showroom on the Champs Elysees in Paris, set up Sony-CBS Records and
established a new research canter in Japan. Sony decided to set up its U.S.
factory on west coast location in the industrial park on the outskirts of San Diego,
California, as they thought it would make good business sense since by 1971,
Sony was shipping most of their products to U.S.