Niyamath Parveez

One of the most surprising things about the current recession is that some people are still spending money on certain products and items. The recession may mean that people are not going out socializing as much as they used to but instead, more money is being spent on staying home entertaining. Whether this means that friends are coming over for more parties or people are considering their home entertainment systems, it is fair to say the staying in is the new going out. These has led to many people looking for the new wave of televisions and are switching to flat screen TVs, plasma TVs and ones that are HD ready. All of these technological advances are changing the way that people watch television and are stimulating some demand and movement in the economy for the industry. However, it still seems that some firms are struggling to justify all of their costs and are looking for ways to reduce their labor costs. Even a big firm like Sony, long regarded as one of the major market leaders in top of the range televisions are finding times hard at the moment and they are looking to outsourcing as a solution. A great number of companies in recent years have decided that outsourcing services or manufacturing will offer them a greater chance of remaining healthy and vibrant in the market and this has led many companies to shift their focus to offshore outsourcing.

Sony, as a firm, has always seemed keen to retain control over all of their manufacturing output, believing that the quality control that comes from producing their own products to be worth the cost involved with undertaking this work. Times change though and the bosses at the company are now starting to realize they can have high quality work for a low cost and the firm is said to be closing two factories that produce their flat-screen television sets. Even though Sony has factories and manufacturing plants all over the world, the lure of offshore outsourcing is proving to be extremely strong and the opportunity to make a huge saving with regards to production costs cannot be under-estimated.

Industry insiders believe that the Taiwan based company Wistron is likely to be the company that Sony turn to for the production of their television sets and this will be of great benefit to their firms employees and the local economy. A recommendation from a multi-national firm like Sony can make all the difference to an outsource supplier and Wistron will likely feel the benefit in years to come if they are able to do a good job for Sony.

For all that outsourcing this level of manufacturing will be of great help to Sony during these troubled times, it is unlikely to provide a solution to all of the problems that the company is facing. The firm posted over 1 billion in losses in US dollars last year and whilst this year’s figures are likely to be nowhere near as bad as this, they are still expected to be over $500 million, more than small change, even for a company like Sony.