What panasonic learned in china?

The article which we will be reviewing is “What Panasonic Learned in China”. The article is written by Toshiro Wakayama, Junjiro Shintaku and Tomofumi Amano. It has been published in December 2012 for the journal The Globe. “What Panasonic Learned in China” consists out of six pages. The main focus of the article is the importancy of adaptation for companies meeting consumer needs as well as being efficient on worldwide scale. The authors of “What Panasonic Learned in China” describe the process of Panasonics integration in Chinese Markets.

At first Panasonic aimed at using China for their lower costs of manufacturing and the output gained in China was mostly destined for export. Besides this, little effort was made to understand the Chinese market.

However, the leaders of Panasonic saw slow growth in China, thus they realized that they needed to engage more deeply with customers in China. Consequently, in 2005, Panasonic created the Shanghai-based China Lifestyle Research Center, which was the first attempt to develop a deep understanding of consumer lifestyles in a market outside Japan.

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Panasonic adjusted certain products to Chinese local needs and became more effective on these local markets. By fostering formal and informal relationships among market-research staff members in China and engineers in Japan, Panasonic ensured that the center’s staff could address both local adaptation and worldwide integration. Panasonic changed from a rather Japanese to a global powerhouse.

The purpose of the article is to analyse Panasonic’s activities on Chinese markets and to inform the reader about this subject.

The author’s major findings and conclusions are that Panasonic has successfully emerged into the Chinese markets after adapting to Chinese local needs. Besides this, the author states that the overseas shares of sales increased highly so the company has successfully introduced locally developed models. In addition, by adjusting to these markets Panasonic has developed itself as a successful worldwide market player.

The points in the introduction, which the author had promised to cover, have all been clearly pointed out in the article. The author has provided adequate argumentation and evidence for the statements in his article as the author gives many examples and explanations during the article. The background information given in the article is quite extensive and he used a lot of different real time cases. The structure and built up of the text was very clear and well organized. The author started at the very beginning with the story of Chinese leader Deng Xiaoping visiting Japan in 1978, during which he met with Panasonic’s founder Konosuke Matsushita. Furthermore the author step by step walks the reader through the process of Panasonic merging into China’s local markets. The author did not really use significant quotations.

To us, there is a question remaining unanswered; what were the consequences of evolving the system from very cheap labour into emerging into the Chinese market and meeting Chinese consumer needs? For example, in what degree the costs of production increased for Panasonic after changing the business strategy regarding Chinese markets. In addition to this, the author has written: “The lifestyle center’s staff recognized an opportunity there for Panasonic, a highly trusted brand.” 1 We find it a bit unclear how Panasonic became so trustworthy for Chinese consumers as it has always been a Japanese concentrated company.

This article gives a perfect case about a company engaging foreign markets. Panasonic changed from a rather Japanese firm to a global powerhouse. They introduced new strategies to become more efficient in foreign markets. This reflects on Introduction to IB because with this article we learn about the behaviour of multinational companies and basic concepts and theories in International Business. It shows us how multiple cultures demand different business approaches.

In conclusion, we both found the case of the article very interesting as it shows us how a huge global company such as Panasonic functions and how it adapts to different cultural needs for local markets. This part of International Business is really appealing to us both as we find the different approaches of a multinational quite intriguing. As to the text, we found it well build-up in a logical way which has helped us understanding the article more easily. We find the article very clear, although we do have a couple of questions left unanswered after reading the article.

These questions are the following; What were the consequences of evolving the system from very cheap labour into emerging into the Chinese market and meeting Chinese consumer needs? What are the exact similarities in approaches between the global and the local aims? What makes Panasonic, which was seen as a strictly Japanese company, so trustworthy?