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Sony ’s Howard Stringer eyes cost cuts to counter profit slide

By Amarendra Bhushan for CEOWORLD Magazine Updated:October 27, 2008

Sony Corp chairperson, Chief Executive Sir Howard Stringer said the electronics giant was keeping up its long-term global ambitions despite taking a “very, very strong” hit in the global financial crisis.

The iconic Japanese firm last week slashed its net profit forecast for the year to March by more than half, blaming a soaring yen, intense competition and a global financial crisis that has sapped demand.

“We are a very strong, export business in Japan. Most of our business comes from exports, over 80%,” Stringer, Sony Corp., which cut its full-year profit forecast last week because of the strong yen, maintained its target of achieving 10 percent return on equity three years from now.. Sony’s first foreign chief, told a business forum in Tokyo.

“So the impact on us is always going to be very, very strong. There is no hiding that,” he said.

Stringer said, however, that the global crisis can provide Sony opportunities to seek out acquisitions, reorganise or to seek out talent from other firms.

“Those who say crisis is an opportunity are usually right, We are selling a lot of television sets, more than ever, but we are not making money on them, and that’s a by-product of a fixed-cost problem that we need to address,” he said.

Sony can use the crisis as “an opportunity to make things more smooth and streamlined and more effective,” he said, adding that Sony will maintain its long-term business goals for now. Stringer said Sony was continuing to boost digital networking functions of its products including its games, hoping for an area to challenge US rivals Intel, Microsoft and, ultimately, Apple.

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