Product mix strategy

English: Representative CEO and EDP of Sony Co...

In a rarity on TPS planet, we are actually going to present two consecutive posts that have something to do with each other. Don’t worry, we’re not going all rational planning on you…just a coincidence.

Sony has selected Kazuo Hirai to become the new CEO at Sony. As a student/commentator/practitioner of business management, I enjoy articles based around CEO’s philosophy. Ironically, we on TPS planet believe that CEO’s, like Presidents and Prime Ministers don’t have as much control over their fate as is generally thought.

Having said that, we believe that CEO’s have their greatest impact by assisting (not fully controlling – because how could they?) the culture of their operation. E.g is the culture one in which people feel empowered to work things out amongst themselves? Is it cooperative? Is it passive aggressive? Is it dynamic? Is it top-heavy or are there strong thinkers throughout? Is credit assigned to individuals, or teams?

There is also a strategic aspect, of course, which, we believe, is both directed from the CEO and emerges from within the organization. In terms of strategy, I applaud Hirai and his lieutenants’ focus on their product mix.

According to the article in the WSJ today, which you can access here with subscription, they had four different teams working on a new tablet at one point. Also, individual businesses made their own decisions on which projects to develop, resulting in an unmanageable mix.

We believe – based on anecdotal evidence – that this problem is common to organizations large and small. Why not make a product for everyone based on every customers stated interests? Well, for one, each product must be managed, and if there are too many, no matter how organized – or heroic – the managers are, each product will not be as good as it could be.

Opportunity cost and focus. Strong planning of product mix is one of those strong fundamentals of strategy that is easily forgotten. Sony looks like it is on the right track. Good luck, Mr. Hirai!


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One Response to “Product mix strategy”

  1. Can TPS report make project buying fun? « It's more fun than a TPS report… Says:

    […] Product mix strategy ( […]

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