Philips, The Largest European Light Bulb Producers

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In Holland, Gerard Philips started a light-bulb factory with his father in 1892. Later, Gerard’s brother, Anton, joined them adding his experience in sales and management. The Philips’ family run business eventually grew to be one of the largest European light-bulb producers. In Japan, 23-year-old Konosuke Matsushita started producing double-ended sockets in 1918. Matsushita quickly expanded his company by adding new products. By the company’s 40th year they had over 5,000 different products and owned 40% of the Japanese appliance stores. How did Philips become the leading consumer electronics company in the world in the postwar era? What distinctive competence did they build? What distinctive incompetencies? When Philips was founded in 1892, their strategy was to focus strictly on producing and selling light-bulbs. By investing in new production technology to manufacture their light-bulbs, Philips became a leader in industrial research. Research in Gerard Philips’ opinion was vital to implementing new procedures, innovation, and improving production. At this time, Philips was using the home replication strategy. This strategy is used when a company does not see any reason to adjust their domestic strategy as they enter international markets. Around 1918, Philips began expanding its product line which made it more difficult to implement the home replication strategy. During the late 1930s, when the war was about to begin, Philips moved around its overseas assets,

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