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McKinsey 7-S Framework Structure Systems Style Staff Skills Strategy Shared Values Structure: National Organizations (NOs) had

informal power over Product Divisions (PDs). NOs consisted of two managers: technical and commercial, with some having a 3 rd , financial manger Systems: NOs allowed for customer specialization, this proved later to be a problem with NOs having so much informal power. Style: Strict accountability when company was unprofitable, drastic employee/manager cuts were made on a regular basis Staff: Originally training was important. Friendly competition turned into a loss of control with NOs Skills: Product innovation, thrived on simplicity of product line Strategy: Trying to stay afloat, drastic cuts were made over time, many systems/procedures were also adjusted Shared Values: Began as employee friendly/driven comp. Later with problems, lost that focus.

McKinsey 7-S Framework Structure Systems Style Staff Skills Strategy Shared Values Structure: Each product was made into its own unique division, to function independently and promote internal competition Systems : Competitive Divisions, MCA, METC, and MECA allowed Matsushita to develop innovative production and development systems in an efficient manner Style : 60% profit to headquarters and 40% back to the division provided an extremely profitable organization, while insuring its own future success Staff: Staff was unique in each division, and could expect lifetime employment Skills: Efficient, low-cost production Strategy : Achieve worldwide presence, whether by the Matsushita image, or producing for competitors Resources Resources Tangible Assets Financial Resources Physical Resources Technological Reputation Human Intangible Assets -innovations produced successful financial strength -new plants & equipment International presence -Experts for innovations & new product development -positive morale when company valued employees with benefits and training -Adapt to market needs Resources Resources Tangible Assets Financial Resources Physical Resources Technological Reputation Human Intangible Assets VHS format distribution for multiple companies Efficient, inexpensive processes Motivate through competition Superior VHS format and production MCA media software

partly due to itsconfused strategies and its ever-changing structure Matsuhita analysis: Copy cat approach very risky Tall structure hindered innovation attempts . superior market share Objectives: Sustain a profitable technology company Competitive Advantage: Ability to shift both geographies and resources to achieve the best product with efficient spending  Philip analysis: Decline of success due to the lack of consistency andlack of ability to deal with a changing competitiveinternational environment.Multi-national locations High quality. inexpensive product Divisional.MCA Divisional Competition Worldwide production and presence Capabilities: Advanced new product development Outsourced producer Geographical shifting Strategy: Use internal competition to achieve innovation and competitive advantage Goals: Achieve worldwide. allowed for superior performance -return back to simplicity. reestablish innovations and efficiencies Sustainable Competitive Advantage through ARC Resources: . international presence .One focus on major product line. few products.Innovations. increase employee morale. product development & efficiencies . Frequent structural changes No clear strategy since 1960 Struggle to balance the roles of NO·s and PD·s Conflict in terms of power and responsibilities Focus on core products led to giving up on various products Closure of least efficient plants Could not manage to produce high-quality. good technicians.METC .MECA . high-tech products and at a low price Failed to adapt to changing demands and thestrengths of the competition. competing counterparts Visionary CEOs 60% to headquarters/ 40% to division Outsourced production METC 10% ROS from Japan  Sustainable Competitive Advantage through ARC Resources Competitive Advantage Capabilities Strategy Goals Objectives -New labs.

Restructuring took a lot of time as the organization wasslow to manage changes Attempts such as Operation Localizationµ Resistance to change due to culture Could not make overseas subsidiaries more innovativedue to lack of expertise. Delegation of authority but no investment in innovation Recommendation to Philip: Investment in R&D and a way to match the low-costJapanese advantage of efficiency Either retain some of its production Invest heavily in its new strategy and encourage participation of everyone Find a structure and strategy which are compatible instead of changing one and trying to make theother one fit Recommendation to matsuhita: Follow a bottom up approach for change management by consulting workforce Right match between strategy and structure Pursue a conglomeration and diversification strategy Have a divisionalised structure. Realize change is not a simple process and has many potential barriers .