PHILIPS Vs

MATSHUSHITA
STRATEGIC COMPETENCE

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 GROUP - 2
 RENU
 REKHA
 KARAN
 ADITYA
 ASHOK
 MANISH

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 PHILIPS MATSUSHITA

Strategy Strategy
National responsiveness Global scale efficiency
Technology-driven innovation Market-driven rapid innovation

Entrepreneurial NOs Innovative PDs

Central research and funding Linkages in the value chain

Core Incompetencies Core Incompetencies

Slow technology to market Overseas subs not innovative
Poor global strategy

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 Philips

Value Management

Research Development Manufacturing Marketing Service, etc.

Centralized Decentralized (NOs)

Basic scientific Adapt, manufacture, market, and service products within national markets
innovation, develop
new products

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 Matsushita

Value Management

Research Development Manufacturing Marketing Service, etc.

Centralized Centralized (PDs) Decentralized (NOs)

Applied product and Develop and manufacture products Market and service products within
process innovation national markets

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 PHILIPS MATSUSHITA
 Gerard Philips and  Konosuke
Anton Matsushita
 Van Riemsdijk and  Yamashita’s
Rodenburg  Tanii’s
 Wisse Dekker  Yoichi Morishita’s
 Van der Klugt  Kunio Nakamura’s
 Timmer
 Boonstra
 Kleisterlee

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 Gerard Philips and Anton

 Development of tungsten metal

filament bulb
 Transfer of Assets
 Research Laboratories shifted to
England
 Top Management moved to USA

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 Van Riemsdijk and
Rodenburg
(1970)
 Decentralization of Authority between
Product Division and National
Organization
 Closed the inefficient Local Plants and
convert best into International
Production Center

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 Wisse Dekker
(1982)

 Focused on core operation

 Cost reduction in operation
 Overseas Technology Sharing
Agreement

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 Van der Klugt
(1987)
 Matsushita
overtook Philips Net Income

6000
5000
Net income (in $ Millions)

4000
3000
2000 Philips
1000 Matsushita

0
-1000 1970 1975 1980 1985 1990 1995 2000

-2000
-3000
Year

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 Van der Klugt
(1987)
 Matsushita overtook Philips
 Divided business in core and non-
core
 Divesting Business

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 Timmer
(1990)
 Stick approach
 Sold the non profitable business
 Ignored consumer demand

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 Boonstra (1996)

 Shifted production to low-wage

countries
 Achieved 24% returns on net assets

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 Kleisterlee (2001)
 Outsourced production
 Made a loss after 1996

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 Conclusion
 Philips had a complex manufacturing
and marketing origanization which
was not cost effective.

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 MATSHUSHITA

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 Konosuke Matsushita

 Started company with Yen 100 and

start production of double-ended
stock
 Battery Power lamps, electronic irons
and radios
 250 year Plan divided into 25 year
section plan
 Post-war boom with new products
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 CONT.
 Divisional Structure
 Business Expansion
 Global Leadership
 Monitoring and Operation Controls
 Headquarter and subsidiaries
relationship

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 Yamashita’s
 Local Market Operation
 More product alternatives were made
available in overseas

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 Tanii’s
 Brought all subsidiaries under METC
 Acquisition of MCA
 Economy burst
 Less profit as compare to 1991

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 Yoichi Morishita’s
 Decentralization of authority
 Shifted production to Asian Country
 Began investing in R&D Partnership

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 Kunio Nakamura’s
 Change the company’s vision.
 Focus on customer need.

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 Bibliography
 online.glos.ac.uk
 HBS Case Study

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