Philips versus Matsushita: A New Century, A New Round

GLOBAL BUSINESS: CASE 1

Group Members:

Quazi Afzalul Haque (6561674)

Tamzidul Islam (6442198)
Maisha Afroz Siddiki (6478408)
 Introduction

• Two electric appliances companies, Philips and Matsushita have a different

business culture and organizational competencies
• Phillips had a successful worldwide portfolio of responsive national
organizations
• Matsushita had global competencies on its centralized, highly efficient
operations
• In 1990s, both the companies struggled to maintain their competitiveness
• New strategies and organizational restructures were implemented
 Competencies
• Employee oriented
• Focused on innovations
• Own Industrial research
• Decentralized structure leading to
creation of National Organizations
• Developed products based on local
market conditions
Incompetencies
• No clear division of responsibilities
between National Organizations (NOs)
and Product Divisions (PDs).
• Operational inefficiency in global
markets
• Poor financial performance
 Strengths Weakness
• Low labour turnover • No control on national
• Local responsiveness organization
• Innovation • Low profit
• Decentralization • Inefficiency in global
operations

SWOT
Opportunities Threat

• More focused R&D facility • Globalization

to serve different markets • Disruptive technology
• Giant rivals
Competencies Incompetencies

• Detailed 250 year plan. • Poor communication.

• Focus on VCR production. • Unwilling to restructure.

• Centralized system. • Lack of innovation.

• Huge number of retail stores. • Weak R&D.

 Strengths Weakness

• Planning
• Communication gap
• Top Management Control
• Restructuring problem
• No of stores
• Research and development

SWOT
Opportunities Threats

• Emerging Market • Intense competition

• Investing more on R&D • Law suit threats
Implementation

Philips Matsushita
• Maximize profits. • Expanded products globally.

• Primary production. • Cost effective method used.

• Standardized products- • Scale manufacturing plants.

television. • Multiple product lines.
• Strategies were not effective.
Recommendation

Philips
• Leveraging the R&D facilities in catering the local market

• Further exercising employee driven strategy

• Improving the quality of labour force ( Technical Labour)

• Strategic alliances with Japanese Company

• Offshoring to low cost geographic

• Further enhancing international brand awareness

Recommendation Cont.

Matsushita
• Exploiting opportunities like economies of scale

• Flexible attitudes towards foreign affiliations

• Enforcing more on glocalization strategy

• Moving from centralized culture towards decentralized culture

• Establishing offshoring strategies

References

Bartlett, C. A. 2001. Philips versus Matsushita: A new century, a new round.

European Case Clearing House.