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Lessons from Sony's Struggles

Stringer and Hirai are two examples of the same mistake. Both succeeded running focused units -- TV in Stringer's case, gaming in Hirai's. But neither could translate that into conglomerate success. And I don't think it's their fault.

It's the nature of the conglomerate. Without the discipline of the market, and without a unified strategy that ties units together and makes sense, success becomes an excuse for complacency and failure just isn't punished.

The lesson was finally learned by Microsoft (MSFT). Between the end of 2003 and the start of 2011, Microsoft and Sony shares mirrored each other, and by the end of the period, both were doing no better than they had eight years before.

The difference is that Microsoft developed a cohesive vision for its company, services and devices, while Sony didn't. Since the start of 2011, Microsoft's stock is up 35%, while Sony is down almost 50%.

A weaker yen masked Sony's lack of vision early this year -- between January and July the stock doubled in price -- but the problems are again too obvious to ignore.

Merely hiving off the movie and TV business, as Loeb suggested, may no longer be good enough to bring Sony back. The conglomerate needs a unified vision or a complete break-up. Dumping a small software unit that sells digital technology to movie theaters isn't good enough. Wholesale change is required.

Sony's units need to be forced to sink or swim on their own. Otherwise, they will continue to go down together.

At the time of publication, the author owned no shares in companies mentioned here

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Dana Blankenhorn has been a business journalist since 1978, and a tech reporter since 1982. His specialty has been getting to the future ahead of the crowd, then leaving before success arrived. That meant covering the Internet in 1985, e-commerce in 1994, the Internet of Things in 2005, open source in 2005 and, since 2010, renewable energy. He has written for every medium from newspapers and magazines to Web sites, from books to blogs. He still seeks tomorrow from his Craftsman home in Atlanta.
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