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Products of Their Own
Son of a manufacturer of soy sauce and sake, Morita started out as an engineer. As a wartime navy lieutenant he was assigned to help an engineer named Masaru Ibuka develop a heat-seeking bomb. After the defeat, Ibuka opened a communications-equipment business in a Tokyo shed, and Morita joined him. The two begged and borrowed $500 to start Tokyo Telecommunications Co., later Sony. Ibuka, who was Mr. Inside, developed the products and became president; Morita, Mr. Outside, specialized in marketing and became executive vice president. Sony succeeded because its chiefs were among the first Japanese businessmen who did not copy Western products but used Western technology to develop new products of their own. Ibuka read about transistors and, in 1952, went to the U.S. to look at them. He became convinced that they could be used to make a radio. Morita visited the U.S. the next year and returned certain that the radios would sell fast in the U.S. He was amazed by the number of American radio stations and concluded that "everybody in the family will want to listen to his own program on his own radio." The radios were an instant success abroad.
Sony on the Moon
A long string of Sony products followed: the first small transistorized TVs, the world's smallest AM radio, even the video-tape cassette recorders used by U.S. astronauts on Apollo moon flights. Their development is a tribute to Ibuka's inventiveness and Sony's highly flexible operating methods. The company, says Morita, is not constricted by a formal research and development budget; it simply pours as much money as seems necessary into a promising idea. Sony's top managers also frequently tear up the organization table, assigning people from throughout the company to work on what looks like the next hot new product.
A key part of Merita's marketing strategy has been to target carefully specific products toward individual foreign markets. In the British color-TV market, for example, he has chosen to compete on price instead of screen size. The least expensive British-made set is a 19-inch model, and only 10% of the TV households have color. By importing a 13-inch set, Morita figured that he could save enough on production and shipping costs to get the price down to $480 and bring color TV into the reach of many more British families.
Morita is acutely aware—as many Japanese leaders still are not—of the intense foreign anger provoked by Japan's closed-door policy at home and invasion of markets abroad. Although he expects U.S. protectionism to fade eventually as business improves, he fears that Japanese-American relations temporarily will get worse. That is one of the more optimistic views among the experts; many foresee a long period of mounting resentment, tension and perhaps outright hostility leading to swiftly rising trade barriers and exchange controls.
What can be done to prevent such a trade war? Certainly the solution does not lie in appeasing protectionist sentiment. Apart from the