Philips Vs Matsushita Case Study

CASE RESEARCH STUDY TASK: Philips vs Matsushita

Philips and Matsushita are 2 primary consumer electronic devices companies that embraced two different methods that lead them to some success, and later losses. Philips, as an international business, was more into a worldwide organizational portfolio; whereas, Matsushita was focusing its operations in Japan. Sadly, both companies deal with loss of profitability even if their top managers were putting a great deal of effort into the success of their particular company. Philips employed 7 CEOs, and each utilized various strategy to reach the business success.

Matsushita strategy was to turn the company into an expense containment mode, however the losing pattern appeared by then. While Philips pursued its course into innovation and entrepreneurship by utilizing their local resources to produce brand-new products, Matsushita was more concentrating on a technique based upon basic products. Philips began closing worthless plants and recognizing services as either core or non-core.

Purchasing the North American Philips Corp was to regain control and spending on basic research was to make the R&D the direct reasonability of the business.

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However, the spending was wasted; NOs were unwilling to use the new technologies developed. Matsushita, on the other hand, was more focusing on its subsidiaries; for instance, it implemented the operations localization that gave more power to the subsidiaries and more choice to their managers. After collapsing, the latest CEO decided to consolidate manufacturing facilities. However, it did not focus on innovation and did not develop new products. Nevertheless, both companies had many disadvantages in their strategies.

For instance, Philips lacked the ability to deal with a changing international environment, exceeded by the competition in terms of price since it was offering the most expensive products in the market, and also, faced many problems internally like disputes between its NOs and its product divisions.

On the other hand, Matsushita has a centralized production which led to losses throughout the years. Also, their cultural values were not adaptive enough to let the firm cope with the changing environment. Even by adopting strong strategies, Philips and Matsushita continue to lose profitability and now for sure, they need to restructure their businesses and risk should be spread in order to mitigate unforeseeable disasters.