Sony is strong, but where is it? Few people say it accurately.

Sony's capital operation in the entire international market was first built in Japan. Establishment of a joint venture begins.

As early as the 60s of the 20 th century, Japan slowly recovered from World War II, and in order to recover its economy as soon as possible, Japan began to gradually open its market to the world, and the closed capital market finally opened the door to officially allow foreign enterprises to carry out direct investment activities in Japan.

In July 1967, the Japanese government began to implement the "first capital liberalization", and at that time it made a decision to open up a number of industries and divide these industries into two types, one is to allow 100% foreign investment, which is also a complete acquisition, and the other is to occupy 50% of foreign investment.

Among the industries that allow foreign investment to account for 50%, there is the record industry.

CBS, the largest broadcaster in the whole United States, has always paid attention to the Japanese record market, and as soon as the relevant opening measures were introduced, as a giant with huge energy, it has a super vision, and the policy has just come out, and it was soon decided to establish a record company in Japan, and immediately began to look for partners in Japan.

As one of the CBS business areas, the record group has a super strong existence, not only has a 20% market share of the global market, but also excels in the technical development of records, and has realized the commercialization of LP records.

LP records, which are known as vinyl records!

In the summer of 1967, Harpe Chain, who was specially appointed by the company, came to Japan, and as the general manager of CBS International, it was inevitable that he would have to carry the banner.

I searched for several record companies one after another, and at first, all of them were very interested in CBS's cooperation plan, but when it was time to make a decision, Xia Yin asked about the decision of these companies, and the answer at this time was just repeatedly: "It is being studied." ”

For a whole quarter, Shain got nothing!

It wasn't until October that Xia Yin remembered Mr. Morita of Sony, who had a business relationship with broadcasting equipment, and wanted to get some advice from Morita, so he tried to visit Morita.

Akio Morita is one of the founders of Sony.

In 1945, Akio Morita graduated from the Department of Physics, Faculty of Science, Osaka Imperial University.

On May 7, 1946, Akio Morita and his friend Daidai Ibuka founded Tokyo Telecommunications Industry Co., Ltd., with Akio Morita as the executive director in charge of marketing.

From this point on, Akio Morita, known as the saint of management, began his extraordinary path!

Totsuko developed Japan's first tape recorder in 1950, when a total of 50 units were mass-produced, but because the product was new to Japanese consumers and the price was too high, it has not been sold, and Akio Morita turned to sell tape recorders to Japanese government departments, and finally achieved a good response in schools and courts.

Later, after another 3 years, Akio Morita set his sights on the transistor developed by Bell Labs, and borrowed 20,000 US dollars from his father to go to the United States to buy a transistor technology patent that no one cared about at that time.

However, since transistor radios could not find distributors in the U.S. market at the initial stage, the board of directors of Totsuko decided to accept an order under the name of another brand, but Akio Morita privately rejected the order for 100,000 units in order to maintain the company's brand image, despite the opposition of the board of directors.

Under Akio Morita's leadership, Totsu Kogyo soon developed a portable semiconductor radio that could fit in his pocket, and this product was different from the previous little interest, and sold as many as 1.5 million units after its launch, most of which were sold to the United States market.

In 1958, the Tokyo Telecommunications Industry Co., Ltd. was officially renamed SONY, that is, Sony, Akio Morita began to carry out the strategic deployment of internationalization, two years later, Akio Morita became the president of Sony Corporation, and another year later, Akio Morita served as president and chairman after Sony went public.

Sony's hardware path has been out of control ever since!

And Akio Morita has begun to cooperate with CBS at this time, Xia Yin found Akio Morita after being helpless, but what he didn't expect was that Akio Morita had already had the idea of cooperating with CBS, as soon as Xia Yin came to the door, he immediately recommended himself and said: "How about a joint venture with Sony?" The speed of his decision surprised Xia Yin. In this way, only 30 minutes after Xia Yin and Morita met with Morita who had broken the iron shoes, the cooperation between the two sides was decided.

In March 1968, CBS/SONY Records Co., Ltd. was established with a registered capital of 720,000,000 yen, becoming the first joint venture company after the implementation of capital liberalization. At the time of the establishment of the joint venture, Sony's deputy general manager Morita was also the general manager, but the actual management was handled by Norio Ohga, Sony's manufacturing planning manager at the time. Although the new company is 50% foreign-owned, Sony is solely responsible for the operation and management, and CBS has not even had a single director.

CBS/SONY Records started from scratch, but one after another succeeded in discovering new talents, and a unique music business was launched. In the same industry centered on the singing route, he has successfully developed a classic singing route and idol route that will become popular all over the world in the future!

As a result, CBS/SONY records have grown rapidly.

On the occasion of the company's 10th anniversary, sales have risen to the top three in the industry.

Five years later, CBS/SONY joined forces with Sony to introduce CD. Only a few years later, the CD overtook the LP as the preeminent medium for music. At this time, CBS/SONY was able to invest in CD software development such as factory construction, and not only did it not need financial assistance from Sony, but BS/SONY had sales of 700 million yen in the first year of its establishment, and in 1988, 20 years later, annual sales had exceeded 110 billion yen, becoming a successful example of the Sony Group's strategy of "running on two wheels of hardware and software at the same time".

The success of CBS/SONY Records in Japan made Sony determined to take a more aggressive approach in the field of records.

In early 1982, Norio Oga persuaded CBS to build a CD factory in the United States with $35 million of CBS/SONY's own funds, and in the summer of 1986, Lawrence Tehugh acquired a controlling stake in CBS Group, a billionaire who had made his fortune running resorts, to consider selling his CBS record company.

Walter Etonnikov, then president and CEO of CBS Records, proposed to Sony Corporation, a joint venture shareholder of CBS/SONY, the group's largest and most profitable subsidiary, that Sony buy CBS Records.

It was a once-in-a-lifetime opportunity for Morita and Oga, who had been looking forward to the opportunity to develop their record business independently, and they immediately agreed to negotiate with CBS on behalf of Sony by Michael Schulhoff, vice chairman of Sonymi Mine.

Sony's acquisition of the world's largest record label was the largest acquisition of a Japanese company over an American company at the time, and the merger process was not destined to be smooth sailing from the outset due to the huge differences in management systems and cultures between the two companies. For nearly a year, from the end of 1986 to the autumn of 1987, the negotiations between the two sides were full of twists and turns, and the exchange of views on the amount of the acquisition was repeated, and it was only with the enthusiasm and determination of Morita and Oga that the merger finally became a reality.

In November 1986, when Yetonikov first proposed a takeover to Sony, Texiu offered CBS Records $1.25 billion. The price was confirmed by Akio Morita and Norio Oga, while Schulkhov and Etonnikov reached an agreement guaranteeing that there would be no serious changes in management when CBS Records was handed over and, more importantly, that there would be no problems with the recorded music.

But it wasn't long before the bad news came from Trugh: he had been consulting with the directors separately and found that they were resisting the transfer motion, and expected the board to veto the proposal.

Texiu's fears were validated: CBS Group's chairman, Pale, strongly opposed the abandonment of the record business and persuaded the board to veto the proposal. This result was very disappointing for Sony.

Fortunately, Lawrence Turhue did not give up on the idea of divesting the record company, and nine months later, the company's capital increased significantly, and he decided to try again, and proposed a new price of $2 billion. Schulhoff once again went back to report to Akio Morita and Norio Oga, who once again agreed to act, despite a 60% price jump in just nine months.

It was a time when Japan's economy was booming, and the yen was trading at 80 to 1 against the dollar, but $2 billion was still a huge sum for Sony in 1987, but Akio Morita once again showed a remarkable eye!

As long as he sees the possibility of long-term returns, he never hesitates to invest heavily.

His only concern was whether Sony had the ability to manage and grow the business in the long term. Morita emphasized the extreme importance of skilled management and was relatively unconcerned about the size of the initial investment.

However, at the September 1987 meeting of the board of directors of CBS, the proposal for the transfer was still not approved, and the vote was postponed to consider the transfer of the record business by way of a public sale of shares. Just when Sony was shocked, things suddenly took a turn for the worse.

On October 19, 1987, known as Black Monday, the stock market crash of the United States severely shaken CBS's prospects for financial markets. The next morning, Mr. Tehugh told Schulhoff by phone that if Sony remained interested in the label, he assured that the board would agree, but that the price would remain at $2 billion. Schulhoff asked Tokyo for the third time.

Apparently, however, Akio Morita showed that he was playing with the air and was not bothered by the price issue, telling Schulhoff: "If it was worth $2 billion last month, it would be worth $2 billion." "On November 18, the two sides finally reached an agreement!

(End of chapter)