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Can Kazuo Hirai save Sony?

By Jeff Blagdon | The Verge,

After Sony's disappointing third-quarter financial report today, soon-to-be President and CEO Kazuo Hirai took the stage to discuss his plans for saving the troubled company. His four-point plan consists of building on Sony's core competencies, getting its TV house in order, figuring out where it can cut costs, and speeding up innovation.

1. Re-enforcing Sony's core businesses: Hirai recognized that digital imaging and gaming are Sony's strong suits, and stated that he plans for the company to capitalize on its assets in these areas in order to strengthen its position in the growing mobile market, which will become a big focus for the company after it takes full control of the Sony Ericsson partnership. In addition, the new CEO wants to apply the advances the company has made in digital imaging to the medical industry, hopefully turning it into a future core business. He also wants to leverage Sony's gaming assets by building unique mobile products only Sony can provide.

2. Pulling together Sony's TV business: Hirai believes TVs will continue to be at heart of home entertainment, but LCD TVs have been commoditized and Sony can't waste any more time futzing around in this market. Sony divested of S-LCD last year and the new CEO plans to continue on this asset-light approach, being selective about the use of resources, and considering collaborations with other companies in order to reduce costs. At the same time, he believes the company can use its proprietary Crystal LED and OLED technologies to create compelling TV products.

3. Transforming Sony's business portfolio: Sony has diverse businesses, which has been good for the company in some ways, but it needs to figure out which of its products are becoming commoditized products without added value so that it can either get rid of them, or make better use of collaboration to reduce costs.

4. Accelerating Innovation: Hirai believes Sony is well-positioned to make the medical area a future core business. Sony has a lot of innovations in sensors, signal processing, lenses, and displays, and can create innovative products by applying these to endoscopy, X-Ray diagnostic equipment and ultrasound. The company was reportedly interested in acquiring a 20-30 percent stake in Olympus (although Hirai refused to comment on the proposed deal), which would be a perfect fit given its strengths in both imaging and medical equipment. The soon-to-be CEO also added that Sony needs to strengthen ties between its R&D and business groups, a movement that he is spearheading.

Hirai went on to say that since 2009 he's been focused on producing products befitting of the name Sony — "wonderful products" with a focus on creating a compelling user experience. In fact, Kaz came back to the subject of user experience repeatedly, stressing that creating great hardware just isn't enough. Responding to a question about management changes, Hirai also said he wants to focus on the free exchange of ideas, and build an executive management team that will challenge his ideas, rather than surround himself with a bunch of yes-men.

This article originally appeared on theverge.com as Kaz Hirai details his plan to save Sony.

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