Philips VS Matsushita Case Study

N.V. Philips (Netherlands) and Matsushita Electronic (Japan) had followed very various strategies and emerged with very virgin and different organizational capabilities. Philips built its success on a terra firmawide portfolio of responsive national organizations while Matsushita based its globose hawkishness on its centralized, passing efficient operations in Japan. During mid-nineties, both(prenominal) company faced major challenge to their competitive positions and organizational model, and at the end of the decade, both companies were assay to reestablish their competitiveness. At the start of the new millennium, new CEOs at both companies were implementing yet another round of strategic initiatives and organizational restructuring.Observers wondered how the changes would affect their long-running competitive battle. The name Philips has become more popular but the company we sock as Panasonic nowadays is the brand name of Matsushita. Philips was the producer of only l ight-bulbs. They became the loss leader in industrial research. After dividing Product Division and content Organization, they innovated new products (e.g. color TV, Stereo TV, TVs with teletext). But byout the times of business, Philips continued unsatisfying progress. However, throughout three decades, seven chairmen experimented with recognizing the company to deal with its growing problems.After mid-nineties Philips started overcoming the profitless progressing problem by cutting its terms through decentralizing its production in different part of the world (e.g. digital auditory sensation tape and electric automobile-s devourr product lines were relocated in Japan). But after 30 years quest Philips recognized that building efficiency in global operation has failed. On the other hand Konosuke Matsushita, a 23 years old inspector started his business with Osaka Electric Light Company, started production of prongy ended socket.The company Matsushita grew rapidly and expan ded into battery powered lamps, electric irons and radios. On the fourteenth anniversary of Matsushita, KM announced to his 162 employees a 250 year corporate skip broke into 25 years section, apiece to be carried out by successive generations. His plan was codified in company creed and in the Seven spirit of Matsushita. CreedThrough our industrial activities, we filtrate to foster progress, to promote the general welfare of society, and to devote ourselves to furthering the development of world culture. Seven Spirits of MatsushitaService through Industry Fairness Harmony and Cooperation throw together for Progress Courtesy and Humility Adjustment and Assimilation GratitudeKey Findings of this Case Philips first its business with one product focus.Organization development through separation of National Organization and Product Division. 7 chairmans change in spite of appearance 3 decades in different attempt of recognition. Production diversification and close down 75 product ion facilities for cost cutting in 1987. During 1990s Operation Centurion reduced headcount around 22% of the company employees. In 2001 Gerards decision of outsourcing the products that cant add value. MatsushitaStarting pedigree in 1918 as a double ended socket producer. On the 14th anniversary of Matsushita, KM announced to his 162 employees a 250 year corporate plane broke into 25 years section, distributively to be carried out by successive generations Advancing with a flood of new products, around 5000 electronic products. Became the first Japanese company to adopt the gradeal structure, giving each division occurly defined profit responsibility for its product. Having a clear and specific target for the future growth of the company and each division has to .pay their 60% profit to the parent company. Building Global Leadership through VCRs in 1980s.KM changed the plan of controlling. Instead of controlling input, he started to monitor the output. wherever the location is , there will be a managerfrom the headquarter. Thats how they manage the relationship between the Headquarter and Subsidiary.SuggestionsAccording to our point of view Philips should arrive at specification on the national organizations and the production division. Each should have been give a target that would judge their performance. Instead of just minimizing and diversifying production, they should have recruited small blood. Because young blood brings innovation in business. Considering their excessive cost of production, they should have outsource as much as possible to minimize cost and maximize profits of their company. Most importantly all the divisions should have been monitored by the headquarter, so that the performance and the cost effectiveness would be more emphasized.