2. Philips-Background Philips was found in 1892 by Gerard Philips in Holland. Philips built its success on a worldwide portfolio of responsive national organizations. Innovation as core strength: One –product focus Gerard’s technology prowess Philips is a “lifestyle company” centered on health and well-being. Focus on product development, brand and channel management. 2
6. Philips-Advantages & Disadvantages Advantages Product innovations National Organizations Increased self-sufficiency Responding to country-specific market Care for its workers Disadvantages Lack of ability to deal with a changing competitive international environment. Higher cost than its competitors Dispute between its NOs and Product Divisions 6
7. Matsushita- Background Founded in 1918 by Konuske Matsushita in Osaka, Japan First Japanese company to adopt the divisional structure One-product-one-division Internal competition forced among divisions Matsushita built its success on its centralized, highly efficient operations in Japan 7
10. Matsushita- Advantages and Disadvantages Advantages Disadvantages Led to slower transition Centralized production Cultural aspect Decentralized responsibility Adaptability Global integrated approach HQ control the subsidiaries Cutting costs Gain local responsiveness 10
11. Discussion Questions How did Philips succeed to become the leading consumer electronics manufacturing in the world? Create product innovations Entering international market National Organizations Increased self-sufficiency Responding to country-specific market 11
12. Discussion Questions How did Matsushita succeed Philips as No.1? Matushita’s competencies: Adaptive organization structure Low cost Self-funded research laboratories Highly competitive-internal environment Flexible organizational structure Government support 12
13. Discussion Questions What change do you think each company has made today? Why is it so hard to change? 13
14. Discussion Questions What challenges does Matsushita face? Focus on globalization of the market- sustaining their competitive advantage in low-cost production Transition should be quicker: to reap the benefits of globalization. So far, local to senior level management- been slow 14
