Philips Vs Matsushita

Case analysis

Philips vs Matsushita

Dutch Royal Philips Electronics and Matsushita Electric Corporation of Japan in their long history followed a very different strategy, leading the two companies showed distinct organizational capacity. Philips successfully established in its distribution operations in the world based on assets, and Panasonic will build its global competitiveness in Japan, focused and efficient operation basis.

The 1980s, the two companies have experienced a history of competitive position of its major challenges and major changes in organizational methods, and in the 1990s, the two companies are to re-establish the competitiveness of their own struggle. The dawn of the 21st century, observers on the one hand the two companies have implemented in the study of large-scale strategic and organizational change, the other in the study of how these changes will affect their long-term competition.

Philips: Background

1892, Gerard Philips and his father in Eindhoven, The Netherlands set up a small light bulb factory. When their investment verge of failure, Gerard's brother Anton joined the company, Anton is a good salesman and manager, made his arrival in 1900, Philips became Europe's third largest light bulb manufacturer.

Since its creation, Philips formed a focus on traditional employees. In Eindhoven, Philips established a company apartment in support of education, while providing good benefits to employees, which Philips has incurred complaints from other local employers. Company established in 1912, Philips will leave 10% of its profits to employees.

Technical capabilities and geographic expansion

When all larger electrical companies to diversify, Philips still only produce bulb. Philips Gerard single product strategy and outstanding technical capabilities enables the company has achieved many significant innovations. The company's policy is to make progress once production technology, it has gradually abandoned the old factory, using the new machines and factories. Anton record of assets, and extract sufficient capital reserves to update old equipment. Philips has also become a leader in industrial research, the creation of the physical and chemical laboratories, not only in the abstract, scientific studies, but also focus on production issues. The laboratory achieved huge commercial success of the invention of incandescent light bulbs, Philips received the product so that competitors can compete with the powerful financial advantage.

Professor Christopher A. Bartlett prepared this case for class discussion rather than to illustrate the effectiveness of the management practice.

Limited to Philips of the Netherlands to the domestic market to overseas development in order to obtain sufficient market to support its large-scale production capacity, so in 1899, Anton Philips hired the first export manager, and soon the company's products in the multi- countries to sell, has opened up new markets such as Japan, Australia, Canada, Brazil and Russia. In 1912, light industry, there are signs of excess capacity, Philips began in the United States, Canada, France and other countries to allow the establishment of corporate alliances sales organization, while other functions are still highly concentrated in Eindhoven, in many countries, Philips to enter the local market and the establishment of joint ventures with local enterprises.

Philips: organizational evolution

An early tradition of Philips business and technology activities both shared and mutually competitive. Gerard is an engineer, and Anton is a businessman, which between them there is a subtle competition between, for example, Gerard may try to produce more products, regardless of whether it can Anton products are all sold, and vice versa. However, they both believe that a strong R & D capability is crucial for the survival of Philips.

The late 1930s, the war will be expected to come, Philips will transfer its overseas assets to the UK and North American Philips Philips two companies, but also the company's most important laboratories have moved to the United Kingdom Sa in the county of Redhill, and the company's senior management issues were transferred to the United States. Subsidiaries in various countries due to the support of assets and resources, while with the parent isolate, become more independent during the war.

After the Allied victory in World War II, due to Philips in the Netherlands, Germany, most industrial facilities have been destroyed, the company management decided by virtue of its subsidiaries in various countries to reorganize the company. National subsidiaries in the war has greatly enhanced their ability to operate independently, making them well adapted to respond to market conditions in different countries, the post-war period, this ability to become Philips valuable asset. For example, when the international debating on television transmission standard can not reach an agreement, countries should decide at different times is the use of PAL, SECAM or NTSC standard; another example, consumer preferences and economic conditions in each country is different, In some rich countries, which can be placed in the TV cabinet is possible, but in other countries, flexible, free TV display may dominate the market; in the UK, the only way to enter the market to carry out leasing business, while in richer countries, the main marketing challenge may be to overcome the prejudices of people on television. In this environment, an independent subsidiary of countries and for understanding the differences between the countries to respond to these differences have outstanding advantages.

Later, a subsidiary of the national response beyond the local market, the scope of marketing, they start building their technological capabilities, product development, they often become involved in an important competition in the local market conditions. For example, Philips has created Canada's first color TV, Australia built the first stereo TV, and built the first British companies with teletext-capable TV sets.

National subsidiaries assumed financial, legal and regulatory aspects of the main responsibilities, and 14 in Eindhoven products division is formally assumed the development, production, and global distribution of tasks. (In fact, as countries benefit in control of a subsidiary division of assets and products from their respective countries in operational matters, which is often the