Download - Philips vs Matshushita
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PHILIPS Vs PHILIPS Vs MATSHUSHITAMATSHUSHITA
STRATEGIC COMPETENCESTRATEGIC COMPETENCE
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GROUP - 2GROUP - 2
RENURENU REKHAREKHA KARANKARAN ADITYAADITYA ASHOKASHOK MANISHMANISH
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StrategyNational responsiveness
Technology-driven innovation
Entrepreneurial NOsCentral research and funding
Core IncompetenciesSlow technology to market
Poor global strategy
StrategyGlobal scale efficiency
Market-driven rapid innovation
Innovative PDsLinkages in the value chain
Core IncompetenciesOverseas subs not innovative
PHILIPS MATSUSHITA
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Value Management
CentralizedBasic scientific
innovation, develop
new products
Decentralized (NOs)Adapt, manufacture, market, and service products within national markets
Research Development Manufacturing Marketing Service, etc.
PhilipsPhilips
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MatsushitaMatsushita
Value Management
Research Development Manufacturing Marketing Service, etc.
CentralizedApplied product and
process innovation
Centralized (PDs)Develop and manufacture products
Decentralized (NOs)Market and service products within
national markets
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PHILIPSPHILIPS Gerard Philips and Gerard Philips and
Anton Anton Van Riemsdijk and Van Riemsdijk and
RodenburgRodenburg Wisse DekkerWisse Dekker Van der KlugtVan der Klugt TimmerTimmer BoonstraBoonstra KleisterleeKleisterlee
MATSUSHITAMATSUSHITA Konosuke Konosuke
MatsushitaMatsushita Yamashita’sYamashita’s Tanii’sTanii’s Yoichi Morishita’sYoichi Morishita’s Kunio Nakamura’sKunio Nakamura’s
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Gerard Philips and Anton Gerard Philips and Anton
Development of tungsten metal Development of tungsten metal filament bulbfilament bulb
Transfer of AssetsTransfer of Assets Research Laboratories shifted to Research Laboratories shifted to
EnglandEngland Top Management moved to USATop Management moved to USA
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Van Riemsdijk and Van Riemsdijk and RodenburgRodenburg
(1970)(1970) Decentralization of Authority between Decentralization of Authority between
Product Division and National Product Division and National OrganizationOrganization
Closed the inefficient Local Plants and Closed the inefficient Local Plants and convert best into International convert best into International Production CenterProduction Center
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Wisse DekkerWisse Dekker(1982)(1982)
Focused on core operationFocused on core operation Cost reduction in operationCost reduction in operation Overseas Technology Sharing Overseas Technology Sharing
AgreementAgreement
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Van der KlugtVan der Klugt(1987)(1987)
Matsushita Matsushita overtook Philipsovertook Philips Net Income
-3000
-2000
-1000
0
1000
2000
3000
4000
5000
6000
1970 1975 1980 1985 1990 1995 2000
Year
Ne
t in
co
me
(in
$ M
illio
ns
)
Philips
Matsushita
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Van der KlugtVan der Klugt(1987)(1987)
Matsushita overtook PhilipsMatsushita overtook Philips Divided business in core and non-Divided business in core and non-
corecore Divesting BusinessDivesting Business
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Timmer Timmer (1990)(1990)
Stick approachStick approach Sold the non profitable businessSold the non profitable business Ignored consumer demandIgnored consumer demand
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Boonstra (1996)Boonstra (1996)
Shifted production to low-wage Shifted production to low-wage countriescountries
Achieved 24% returns on net assetsAchieved 24% returns on net assets
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Kleisterlee (2001)Kleisterlee (2001)
Outsourced productionOutsourced production Made a loss after 1996Made a loss after 1996
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ConclusionConclusion
Philips had a complex Philips had a complex manufacturing and marketing manufacturing and marketing origanization which was not cost origanization which was not cost effective. effective.
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MATSHUSHITA
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Konosuke MatsushitaKonosuke Matsushita
Started company with Yen 100 and Started company with Yen 100 and start production of double-ended start production of double-ended stockstock
Battery Power lamps, electronic Battery Power lamps, electronic irons and radiosirons and radios
250 year Plan divided into 25 year 250 year Plan divided into 25 year section plansection plan
Post-war boom with new productsPost-war boom with new products
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CONT.CONT.
Divisional StructureDivisional Structure Business ExpansionBusiness Expansion Global LeadershipGlobal Leadership Monitoring and Operation ControlsMonitoring and Operation Controls Headquarter and subsidiaries Headquarter and subsidiaries
relationshiprelationship
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Yamashita’sYamashita’s
Local Market OperationLocal Market Operation More product alternatives were More product alternatives were
made available in overseasmade available in overseas
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Tanii’sTanii’s
Brought all subsidiaries under METCBrought all subsidiaries under METC Acquisition of MCAAcquisition of MCA Economy burstEconomy burst Less profit as compare to 1991Less profit as compare to 1991
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Yoichi Morishita’sYoichi Morishita’s
Decentralization of authorityDecentralization of authority Shifted production to Asian CountryShifted production to Asian Country Began investing in R&D PartnershipBegan investing in R&D Partnership
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Kunio Nakamura’sKunio Nakamura’s
Change the company’s vision.Change the company’s vision. Focus on customer need.Focus on customer need.
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BibliographyBibliography
online.glos.ac.uk online.glos.ac.uk HBS Case StudyHBS Case Study