Comparing and Contrasting Similar Companies: Philips and Matsushita

The performance of each company is different from time to time based on their two different international strategies. Philips, for instance, showed poor struggles between national organizations and product divisions since there was no centralized decision –making terminal. In the end, the national organizations held the power because they were in control of the assets. Being in control of assets, the national organizations had more influence on the management team. Also the lack of clarity between the two’s responsibilities did not allow Philips to function effectively as a whole. They did have one thing going for them though. Philips was able adapt to changing markets based on their localization strategy. They

It was obvious from the first that growth was not only important, but also essential for survival in this industry. Design and production vision followed a modified version of Moore’s law -- every two years the product had to be twice as fast, half the size, at half the cost. Pricing was determined by the open competitive market. As the market consolidated, price wars erupted, resulting in federal involvement to combat parts dumping by foreign giants. Tens of millions of dollars went into product design, especially process design, as DMC strove to meet a goal of being the lowest cost producer. Although technologically they were doing well, even with their lower wage, location and labor pool, they eventually moved some production offshore through acquisitions of

Initially as a market entrant, Galanz focused on a low cost strategy to gain leverage in the domestic market. This strategy was supported by an abundance of cheap land and labor. The expensive microwaves produced by players like Toshiba and LG were unaffordable for majority of the Chinese population and hence, Galanz became popular right from its inception. The rapidly increasing demand, which rose to almost 25 million units in 2003, for these low-cost microwaves prompted Galanz to expand its production capabilities. Galanz, facing shortage in production, decided to outsource magnetron production to Japan for the production deficit that it faced. Furthermore, deals with customers like Fillony to transfer entire production lines made sure that the ever growing demand for the ovens was met successfully. The perennial working shifts for the production team ensured that production scale and costs of Galanz was unmatched anywhere in the entire market.

The core problem is about their management style in top level. With such a highly efficient production line plant, the company 's management is like a job-shop, the executives take charge of every small decision of almost everyone. This greatly weakens the possibility to expand, because the one or two top management are not available dealing with so many daily issues. In addition, due to the size and life-long

New Product Development : the aggressive investment strategy into R&D division led to speed in releasing new products in the market. This gave the company higher ROI returns projections. The faster cycle of innovation led to multiple product availability in the market which led to further increasing the gap between them and the competitions and also the company indulged in manufacturing self brand products rather than Co-branded or Partnerships.

The company was too reliant on orders from the US Government. They need to expand its operations into other areas.

Postwar environment caused Philips to build organization on the strengths of the national organizations, since their industrial plant in Netherlands were destroyed. Because they previously anticipated this war, they were able to transfer oversea assets into two trust, research labs were moved to England, and top management to U.S. Because of this, the individual country organization became more independent. Therefore, Philips was self-sufficient and was able to respond to country specific market conditions, since preferences and economic conditions varied. Philips’ company structure incorporated a matrix mix between product divisions and national organization. Although, geographic and product matrix was the formal corporate-level structure, national organization had more power. Philips recognized the importance of foreign operations and they chose to incorporate the multi domestic strategy. This was a strategy with high cost, multi country, decentralized control, and high responsiveness

Matsushita did this by closing its fax machine factory in Germany, and closing its microwave oven subsidiary and air-compressor factory in the U.S. Matsushita also asked for more than 10,000 Japanese employees in its manufacturing sector to retire early and all of these closed businesses and cancelled job positions were moved to China. Matsushita’s establishing of the new “brain” in China, or Matsushita Electric R&D Center in Beijing, China, was the company’s second largest of 16 R&D centers around the world. Matsushita’s chairman, Yoichi Morishita said “it was too difficult to explain everything about China to Japanese designers; to really make use of China’s special competitive advantages and to really meet Chinese customers’ demands, Matsushita decided to hand over its China-related development and research issues to local researchers and engineers.” Matsushita decided to localize material supplies and use as many Chinese suppliers as possible for its operations in China because there are several material distribution and trade centers in China that provide steel, paint, hardware, etc. all functioning with a mechanism similar to that of the polystyrene distribution and trade centers. The fourth fundamental change in Matsushita’s new supply chain, Stretch the distribution link, Matsushita selected TCL, the largest TV producer in China, as its strategic partner to stretch its supply chain to Chinese rural and inland markets. With

Lack of integration prevented the Keda's leaders from making strategic decisions when it mattered. For instance, when leaders were supposed to decide on whether to compete for orders for the polishing machines in foreign markets, Keda failed to assess the cost and the profitability involved. In order to remain ahead of competition in product innovation, Keda had to continue engaging in the improvement of product development and management operations.

And the reason of it was still the cost. Indeed, this former strategices failed to match their product characteristics with their supply priorities. That is, it cannot minimize their product cost. For example, using Japanese suppliers before was twenty to thirty percent more empensive than using Chinese suppliers, not to mention about the trasportation cost. In addition, their original Japanese design was still increasing the cost in China’s factories ----- increase equipment cost cannot make good use of the cheaper labor cost in China; increase producing cost by designing unnecessary function in China.

Royal Philips NV and Matsushita (owner of the Panasonic brand among others) are two of the world’s biggest electronics multinationals. After successfully building their global empires in the early twentieth century, they have both suffered financially in recent decades. It is therefore interesting to look at why this has happened and what their future prospects are.

Below are some of the legal and ethical issues that the organisation need to consider with regard to the gathering, processing, distribution and the use of information on the internet;

This was a he turning point because a Japanese product known to the people was being sold through this giant toy distributor. Soon other brands followed suit. They could have tried the alternative route of connecting with the Japanese toy manufactures in a way that would not seem so industrialized.

It is interesting to note the underlying ideologies behind these objectives that Sony Corporation has set.  The national culture is evident in the way these objectives are created, aside from the fact that this work organization was born during the aftermath of the World War II.  Mr. Ibuka has pictured that his company will serve as his contribution for national development, and that technology is the key to their growth.  This is in line with the national advancement that the Japanese government was aiming at then.

In contrast to Philips, Matsushita’s success stems from highly efficient and centralized operations. Also unlike Philips, Matsushita’s numerous domestic retail outlets in Japan are ideal for the sale and distribution of their products and provide valuable market research opportunities and capabilities. Both the structure and culture at Matsushita encourage an entrepreneurial drive in their employees and divisions, as they compete for funds to develop new products, and extraordinary communication exists between the international operations and the home office in Japan.