Although more does not always prove to be better, as visible in the AOL Time Warner case, where the company has the unpleasant honor of having suffered the largest loss in US corporate history. The media conglomerate may need to sell off part of its business to save the overall brand.

But big doesn’t always have to be monstrous. Generally, companies that grow organically do so more smoothly than those that grow through acquisitions. In the case of Sony, the company’s rise to prominence has been marked by steady growth, devotion to technological innovation, and a Zen-like ability to shrug off defeats.

Some of those defeats have been huge. In 1994, Sony announced a US$ 3.2 billion loss for its second quarter because of excesses accumulated during Peter Guber's and Jon Peters’s disastrous tenures as the heads of Sony Pictures. Early the following year, Time Warner and Matsushita endorsed Toshiba’s version of the nascent digital videodisc (DVD) system, crushing Sony’s rival DVD technology. The defeat was reminiscent of Sony’s 1980s failure with the Betamax, which lost the battle with JVC’s competing VHS technology.

Some brands never survive one disaster, but Sony simply stayed on course after all three stumbles. Like Coca-Cola after the New Coke fiasco, the company admitted defeat and humbly adopted the victor’s technology as part of its product line. In the case of Sony Pictures, it eliminated the “problem” people and stubbornly stuck with the movie business; in 2002, the studio released the runaway hit Spider-Man, which grossed US$ 821 million worldwide.

Even when Sony adopts a rival’s technology, as in the DVD and VCR wars, it quickly uses that technology in its own products and turns the emphasis to the creation of sleek, attractive designs that win over consumers despite the availability of cheaper alternatives. The company sold 86 million electronic devices in 2002 and remains the second-largest electronics maker, after Matsushita (best known for its Panasonic brand products).

Not only does brand loyalty help drive those sales, but Sony’s desire to provide the whole experience also provides a boost. You can buy blank Sony VHS tapes to use in your Sony VCR. You can purchase Sony CD-RW and 3.5-inch floppy discs for use in your Sony computer. Or maybe you have a Sony cassette player, in which case you’ll need some blank Sony audiocassettes to record an artist signed to one of Sony’s many music labels.

The company produces the number one video-game console in the world, PlayStation 2, and even owns a subsidiary, 989 Studios, that produces software for the machine. Of course, you can hook your PlayStation 2 into a Sony TV, and if you want to play games online against other opponents, which is the next frontier in consoles, you can access Sony’s service for that too.

The company has followed a fairly consistent model in the 58 years since Masaru Ibuka founded it in a burned-out Tokyo department store with seven employees and US$ 1,600 in savings. Its 1949 breakthrough product was a reel-to-reel tape recorder that became a runaway success once Japanese customers discovered how important audio recordings could be. Of course, the company also sold the blank tape reels.

The company followed that up with more must-have consumer products over the next 50 years, including the world’s first pocket-sized transistor radio (1957), Trinitron color TVs (1968), micro televisions (1962), the smash-hit Walkman (1979), and the VAIO notebook computer (1998). Those products solidified the company’s reputation for producing hip, cutting-edge technology that most consumers just had to have.

While its prices, which are 20 to 30 percent higher than comparable products, could be considered a weakness, Sony relies on its name to help make sales. In the video-game console business, for example, Sony lords over the competition, Nintendo and Microsoft, despite the fact that Nintendo’s GameCube retails for US$ 50 less and Microsoft’s Xbox boasts higher-end specs and a hard drive for the same price, US$ 199 (Microsoft actually loses money on each unit, supposedly as much as US$ 200).

Sony used its brand name to push the original PlayStation into a dominant position in the industry when the company introduced the console in 1995. Despite the fact that Nintendo owned 70 percent of the market at the time, Sony quickly took over and worked on improvements. It introduced CD-based games at a time when Nintendo was still relying on outdated cartridge technology, and it wooed developers who didn’t care for Nintendo’s strong-armed tactics. Despite the fact that PlayStation 2 is notoriously difficult to create games for (many developers love Xbox because it uses a scaled-down version of Windows), Sony’s dominance ensures that developers will create plenty of games for console owners to choose from.

Sony can also bank on its robust R&D department, which consistently remains on the cutting edge of technology. In the 1986 book Made in Japan, Akio Morita, who was Sony’s most well-known chairman and CEO, talks about the future emergence of high-definition TVs as well as cameras that can take pictures without film. Both products have only recently gained a foothold in the worldwide electronics industry.

This year, the company will launch the next generation of DVD: a player/recorder that uses discs, which Sony calls Blu-Ray. It will be able to hold 23 GB of data (five times what current DVDs can handle) and promises to provide perfect audio and video for the increasing number of people who are buying HDTVs and home theater set-ups. Blu-Ray isn’t the only format in the next-generation DVD wars, so time will tell if Sony has another Betamax on its hands, although this time Matsushita is on its side. Sony’s other plans for the next two years include a PlayStation Portable (PSP) and an enhanced PlayStation 2 console with a built-in Internet adaptor.

With sales for the quarter ending December 31, 2002, at US$ 19.5 billion—rising 1.2 percent over the same period a year earlier—and a US$ 1 billion profit in the bank, it’s clear that consumers have come to rely on the Sony brand for innovative products that push the technology envelope and carry a cache of cool about them. And by providing the whole widget, Sony can increase sales as well as let customers know that they’re a one-stop shop for all their electronics needs.

Brad Cook is a freelance writer based in Sunnyvale, CA. He has published over 120 articles in a variety of print and online media since 1995.