Philips vs Matsushita

s

Case – Philips versus Matsushita: Competing Strategic and Organizational Choices

Quick Overview:

Philips builds its success on a worldwide portfolio of responsive national organizations while Panasonic bases its global competitiveness on its centralized operations in Japan

Philips

* Brief Summary of the case and company situation

They started operations in Holland selling small light-bulbs in that country, but soon started expanding sales and product lines. During the 20s they started producing other products such as electronic vacuum tubes, radios and X-ray tubes. They established National Organizations in different regions, which took major responsibility for financial legal and administrative processes and also established different product divisions, responsible for development, production and global distribution. During the 60’s, competitors started to move electronics production to facilities located in low-wage areas and were quickly gaining international market share while Philips’ financial performance was declining and global competitiveness was being questioned.

* Analysis of what major issues are

Because of the National organizations and Product Divisions, it was difficult to determine in any given situation which one of the parties was responsible while lowering the speed of reaction of the enterprise. Also there were marketed many products and there also were plants not as efficient as others.

* Recommendation how to solve main issues

Selling less profitable businesses while focusing and investing in more profitable ones. Focus more on established platforms. Consequently, reduce the number of different product divisions, separate the remaining product division by markets and centralize operations, giving back the power to the parent company. Invest more in R&D. Reduce costs by relocating some factories to low-wage places and joint-venturing in the development of some common technologies. Start focusing more in net...