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France proved to be the country where it was most difficult to set up a new business. Idei began preparations to establish a sales company there in 1971. At the time, France had effectively sealed its borders to direct investments from abroad. Idei paid many visits to the Ministry of Finance in the Elys es Palace, seeking permission to establish Sony France. France's Ministry of Finance emphasized the protection of homegrown industries and thus was not amenable to the idea of Sony France. Furthermore, the owner of Tranchant Electronique, then Sony's exclusive distributor, and Minister of Finance Giscard d' Estang were close personal friends. Accordingly, Sony's request to terminate the distributor agreement as a premise to the founding of a 100% Sony-owned subsidiary was not warmly received.
After Idei spent much time negotiating through lawyers, a three-year contract to form a quasi-joint venture with the Suez Bank was finalized. In February 1973, Sony France was founded with Jacques Dontot, former chairman of the French Electronics Industry Association as its president, and Yasuhiko Ohga of Sony as its vice president. The two years of negotiations were a nightmare for Idei, but the solid relationship that was formed during this period later enabled Sony to buy out its partner with relative ease.
In September 1971, a showroom was completed on the busy and fashionable Champs Elyses, just as Morita had requested. Idei was gradually awakening to the realization of what it takes to establish a brand name in a market. Brand name goods are those goods which are not easily attainable, but yet are in constant demand. He was beginning to understand that in Europe, and especially in France, brand name goods were desirable. Thus, it was very important for Sony, virtually unknown in France at the time, to quickly establish its brand name. The Sony showroom on the Champs Elyses played a crucial role in measuring the improvement of the Sony image among those who visited Paris.
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Idei in front of the Tranchant Electronique building in Paris.
In the background is a Sony van painted with a Japanese red rising sun motif. |
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The success of these sales efforts effectively ended an era when Sony sales staff worked from a rented office belonging to an exclusive distributor. With its own sales operations, Sony was now ready to directly promote its high quality products and establish a brand name both in Europe and the US.
Each Sony pioneer went through many hardships. Yet to have been given such a large task at such a young age, and to have experienced the building of a business in a foreign country, was enriching and satisfying to both Sony and the pioneers. Once the new companies were established, local staff members were sought. The fact that Sony was an unknown foreign firm worked to its advantage because the people who came to work for Sony in those days were ambitious risk-takers.
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