Sella174 said:Right you are. But then why (a) does Sony keep the electronics division, and (b) would anyone "invest" in Sony (electronic) products? One managerial change and - poof! - no more cameras and TV's. I simply cannot believe that Sony management can be so, well, non-businesslike. But then, cow-dung baffles brains.J.R. said:You could however, go here -
I work in China where tons of companies are making losses just to be there so let me share some cases.
You suck up losses to build up brand, to be well known. Can be across product lines or even divisions.
Can also be used to technically corner a market (think microsoft who earns its software cash on pro and servers, not consummer level stuff).
There's also a darwinian aspect, sort of a James Dean-esque chicken run. Everyone in the industry is making losses. The one(s) that will stand the longest will have the market to himself, rake up price and finally make up a profit. This works in industry where the "entry price" (i.e. build up your production capacity) is high as it will be very hard for new competitors to come in (or come back in) once the market is profitable.
And that's just for manufacturers, others sectorssuck up losses in some aspects to cash in on others. The only important point being the final balance of the company. Distribution (especially ecommerce) takes losses on sales but money on selling market space. IT suck up loss for a certain time, until you reach critical mass of users that allow you to be "bankable" when you launch paying services.
And I'm not even talking about "PR divisions", businesses taking a loss to make the evil mothership look less evil.
TLDR: In short there is a truckload of reasons to keep unprofitable divisions and even companies floating. It's just not always good that people outside of top management know why and for how long.
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