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The 1960s and 1970s were not just a time of overseas expansion for Sony. Morita was also pursuing other projects during this time.
One day in May 1972, while the San Diego plant was still under construction, Morita who was then president, and other Sony top management gathered for a brainstorming session on the future course of Sony. Morita's suggestion of importing products from the US took everyone by surprise. Some agreed, others kept quiet, and the rest were strongly against the idea as they were concerned about the hassles their salespeople would face. Tetsuro Yotsumoto, then director of the International Division, was one of the people who strongly opposed the idea. Morita replied to him by saying,  I can see where you are coming from, but it will help Sony Corporation in the end.
At the time, the dollar was still unstable, despite the Smithsonian Agreement on a fixed exchange rate of $1=308 yen. Additionally, the US trade deficit with Japan was showing no signs of decreasing. Protectionism was on the rise in the United States, and Japan was being branded an economic animal. Many US industries were accusing their Japanese counterparts of dumping and claiming that the Japanese market was closed to them. Neither European nor US companies had much sympathy for Japanese companies. While establishing sales channels in the United States, Morita had been concerned that emotional clashes between the two countries might irrevocably damage their relationship. At that time, Sony was exporting just under 50% of its Japan-made products.
Morita was convinced that Japan's export volume would continue to increase and that pressure for Japan to step up imports would rise accordingly. Hence he insisted, If Sony is a leader in exporting, it should also become a leader in importing. Before the pressure mounts, we should introduce Japan as a market for US and European exports. Let's make a solid push in that direction.
Morita was in the United States when the dollar was devalued and the yen was introduced to the floating exchange rate system. There he experienced the harsh anti-Japan sentiment prevalent in the United States firsthand. This experience led him to think that, Japan as a country must be more aware of its role in the international community. The Japanese government had just begun to implement such measures as tariff reductions to encourage imports.
Two weeks after the brainstorming session, Morita flew to New York and held a meeting with the public relations and advertising managers of Sony Corporation of America. This was the first step in Sony's preparations for importing items from the US.
On May 31, 1972, Sony placed full-page advertisements in four major US dailies proclaiming, SONY WANTS TO SELL U.S. PRODUCTS IN JAPAN. The first line of the ad read, Japan is a promising market for US-made products, and announced that Sony would draw on its sales expertise and knowledge of the Japanese market to provide support to US firms wishing to export their products to Japan. As Sony was known primarily as a company that sold transistor radios and color televisions, the initial response to this ad was one of surprise that a firm such as Sony would venture into the importing business, but the company soon drew support for its efforts. The aim of the ad was simply to deliver the message that in Sony, US firms had a friend thousands of miles away across the Pacific.
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A Sony advertisement in U.S. Time Magazine. |
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SONAM received over 1,500 inquiries following the placement of the advertisement. They were so busy handling the replies that help had to be sent from the International Division in Japan. Morita was delighted with the response, which was much greater than he had anticipated. He announced that Sony would establish a trading firm to carry out the operation in the proper fashion. Hence, in July 1972, Sony Trading Corporation was founded with Taketoshi Kodama as president. A similar advertising campaign was conducted in Europe shortly after the one in the United States, and managers stationed abroad received orders to look out for products that would be suitable for the Japanese market. Morita implemented all the measures he could think of to promote imports to Japan.
The criteria for selection were that the products had to live up to Sony's reputation for quality, and they had to enrich the lives of Japanese consumers. The first foreign company to sign an agreement with Sony Trading was the Whirlpool Corporation. Shipments of large refrigerators and other electrical appliances were scheduled to begin from January 1973.
Sony Trading's import business grew to include everything from whiskey and vacuum cleaners to helicopters and jet airplanes from all over the world. However, high after-sales service costs exceeding the price of the products themselves, and competition from Japanese domestic products, resulted in constant headaches for Sony Trading staff.
Meanwhile, Japan's trade surplus was surging and in 1978 a new catch phrase emerged: US-Japan trade friction. In 1979, Japan was described by the EC as a workaholic country where people live in rabbit hutches. This prompted other Japanese companies to begin importing activities of their own. They came to Sony to learn about importing. Sony received an award from the Japan External Trade Organization (JETRO) for promoting imports to Japan and won praise for its leadership in the field.
In 1985, the G5 countries met to address how to deal with the yen-dollar currency rate situation and the strong dollar. They signed the Plaza Accord as an expression of their shared desire to avoid increased protectionism. At the meeting Morita exclaimed, Thank God we made Sony Trading.
In the 1980s and 90s, while Sony was busy expanding abroad, Sony Trading continued to grow under the successive leadership of Tetsuro Yotsumoto, Hajime Unoki, Tamotsu Iba, Toshio Miyamoto, and Haruo Akita. Sony Trading has religiously stuck to its founding principle that trade should be an interactive and bilateral process and continues striving to find quality products regardless of their country of origin.
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