Repairing a brand – How Microsoft and Sony made the Fatal Mistake of Over-Relying on Their Brand

Repairing a brand – How Microsoft and Sony made the Fatal Mistake of Over-Relying on Their Brand

A company has many tools in their arsenal but none are quite as powerful or as delicate as what can only be described as a glass cannon, their brand. A company’s brand is their image, their perception, their success (or failures). A name alone is strong enough to do away with most competition.

A brand is not constant, it is always improving or decaying but never remains neutral. Even the biggest of brands can fall into irrelevancy with just a few wrong moves. Research in Motion for example used to be a household name, with Blackberry being THE phone to have. This once great brand is now grasping for life, already forgotten by the people who loyally used them for years.

Today’s post is about two behemoths in the tech industry, Sony and Microsoft. Both have been influential, creating new technologies and revolutionizing how we go about our day to day business. Both have brands that can be recognized across the globe and both made the mistake of assuming their brands were untouchable.

This begs the question, can a withered brand fight its way back to relevancy?

Sony’s Arrogance and the Road to Humility

When Kaz Hirai took over as CEO of Sony Corp, the company was already victim of brand decay. Caused by their own arrogance, the company poured countless money into new technology almost recklessly. Many were failures (UMD discs) but a few were successful (blu-ray).

Their television brand was swallowing profits as Samsung and others started to get more aggressive in the quality of their TV’s. Their mobile lines were becoming irrelevant in favor of Apple and Google phones. Even their PlayStation brand was suffering severely due to the high price, lack of games and lack of proper advertisement.

Sony was sure that their high priced (in some cases) lower quality products could send consumers in droves to buy them only to be met with the cold shoulder. Kaz Hirai was tasked with saving a troubled company.

His plan was “One Sony” a plan that would downsize the company in order to shift focus on 3 core competencies (phones, images & gaming). Was he successful?

In 2012 Sony reported their first net profit for the fiscal year in over 4 years after taking consistent losses. Their phone brand the Xperia with its unique design and durability proved to be a success. The PlayStation brand became the leading HD console globally thanks to aggressive price cuts and a healthy stream of exclusive games and services.

You can just tell how humbled the company has become through recent conferences and press releases where it’s all about the customers and developers and not investors and shareholders.

Microsofts 8 Debacles

Whereas Sony was at risk of going under a few years ago, Microsoft was thriving like never before.Windows 7 was setting the world on fire as the company’s fastest selling product to date. A year later they announced a reinvigorated mobile line called WP7 (Windows Phone 7) which seemed poised to take a chunk of the market in the Apple and Google-centric smartphone environment.

Even their videogame market was making strides as the Xbox brand grew ever more influential in becoming the living room product in every household.  

Unfortunately everything started unraveling as the following generation of products failed to catch on. Windows 8 was met with heavy criticism due to the difference in aesthetics and removal of some features such as the iconic start button and became the slowest selling product to date.  WP7 was abandoned after a year in favor of the upgraded line WP8 angering early adopters.

It didn't help that the reveal of the Xbox One was so mishandled that it can be considered one of their most botched products pre-release in the company’s history. With negative rumors that was damaging the Xbox brand that painted the yet to be revealed console in a bad light the reveal of confusing, even anti-consumer policies where met with harsh criticism. It even lowered their stock and raised Sonys due to how tremendously mishandled the entire conference was. 

Product after product the company seems to be spiraling out of control. Their lack of communication mixed with an over-reliance on their brands led to these failures. Recently the company had a huge shift in management so it remains to be seen if Microsoft can learn from these mistakes. 

A Long Road Ahead for Both

Both companies made the grave mistake assuming that these products would sell themselves based on the strength of their name.

By radically changing the design, policy even functions of these products they ended up breaking their brand. Although Sony is currently hitting all the sweet spots they still have a long road ahead of them to match to the success the company had years ago. Microsoft’s major shift in management looks hopeful as it's in the same vein as Sony, so much so that their plan is called One Microsoft (sound familiar?).

These two contrasts in strategy show the importance of maintaining a brand and the limits of relying on past successes.