Essay Philips vs Matsushita Case Analysis

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Philips versus Matsushita Case Analysis Competing Strategic and Organizational Choices Erik F. Spear Lynelle C. Vidale Vannessa. D. Williams IMAN601, Section 9040 Dr. Mariana Feld November 2, 2010 Philips versus Matsushita Case Analysis Competing Strategic and Organizational Choices Introduction 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. Porter’s Five Forces Analysis: Strengths and Weaknesses…show more content…
If suppliers are limited, they have a greater opportunity to charge higher prices for raw materials, and they may also pose a threat of forward integration to the industry. Similarly, if an industry has few buyers, or buyers can cheaply and easily change suppliers, they can make demands for less expensive higher quality products, causing impact to profit (Porter, 2008, p. 83). Philips’ Organizational Structure: Strengths and Weaknesses The arrival of Gerald Kleisterlee in 2001 brought organizational changes to Philips that is evident in the marketplace today. The new CEO restructured the company by outsourcing mobile phone production to CEC of China and the production of VCRs to Funai in Japan. This was followed by the outsourcing of TVs, CD players and components with simultaneous movement of remaining in-house production to countries like China, Poland and Mexico, who had lower costs. He also sold off several businesses, including the core semi-conductor business. What evolved was Kleisterlee’s vision for a new Philips – a lifestyle company centered on health and well-being – which organized around healthcare, lighting and consumer lifestyle. The strength of Philip’s current organizational structure lies in the fact that it organizes around market needs, rather than products and core competencies. The company continued to bring

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