Philips Versus Matsushita Case Essay

Philips and Matsushita are two giants in the global consumer electronics market. Their international strategies and organizations are very different fleck the former pursued a position strategy, the latter pursued a global standardization strategy while the former made use of highly self-sufficient national organizations (NOs) for unwavering topical anaesthetic anaesthetic anaesthetic responsiveness, the latter adopted one product one course structure for monetary value cutting. Nevertheless, both companies encountered their difficulties as global environment changed and put up then undergone major restructuring over the years. So what are the recommendations for these companies to survive in the changing environment? Philips has builded local responsiveness through its modify structure of national organizations (NO). This structure has a great value in being able to sense and quickly respond to the differences in the local markets. As a result of product development is a cash in ones chips of the local market conditions. Philips had developed 8 major R&D facilities throughout the world that are highly specialized. They have been a winner introducing such products as first color TV in its Canadian NO and first stereo TV in Australia.However, these inventions were not dual-lane with the rest of the NOs in Philips because of the lack of communication between NOs and headquarters. For example, Philips Beta videocassette do wasnt shared with other divisions as the strategically valuable invention, as a result North America Philips rejected this invention instantly choosing instead to outsource and sell Matsushitas VHS tapes. In order to encumber these strategic mistakes, the main role of the headquarters should be scanning of billet activities across countries and identifying resources and capabilities that might be a source of competitive advantage for other companies in the firm. In the 1980s, Philips competitive position weakened significantly . rival from rapid technological change, emergence of global standards for electronic equipment and low bell Japanese manufactures all contributed to the overtaking of Matsushita. Past efforts to develop technological capabilities oversea have failed due to the keep companys highly of importized R&D structure in Japan.Matsushita have transferred significant resources to local R&D centers, however the delegation of many responsibilities and framework of R&D came from headquarters in Japan. This philosophy was not well accepted by engineers of the acquired local companies because of the excessive functional control from the headquarters.As the result of central R&D dictatorship overseas companies were not able to develop innovative capability and entrepreneurship. The challenge for Philips is to adopt a more pliable integrative process to balance its decentralization with controls and put in puzzle suitable global coordination mechanisms. As NOs take over the development, manufa cturing, marketing and operate functions on Philips, these powers have to be reallocated to a centralized module or directly sell to other companies so as to control their powers and facilitate global integration. Yet, the applied science capabilities should not be a trade-off for cost cutting purposes as it is where Philips core competency lies at.Customer-focused approaches like quality after-sales dish out or intensive market researched should be conducted to promote the strength of its technology and branding. Moreover, an information system should be established to allow free cognition or information exchange between NOs. The challenge for Matsushita is to enhance its local responsiveness to balance its centralization with innovation and entrepreneurship and put in derriere suitable localization mechanisms. First, Matsushita should establish an information system for technology and beget development for all its subsidiaries.Global knowledge transfer is important to erect basic foundation and technical support for innovations. Second, Matsushita should form cross-functional teams to investigate the local market. By employing a diversified profile of people, they can give findings or suggestions on various parts of operations like customer-relationship management, manufacturing, marketing, rather than on the button produce development alone. Lastly, they should recruit more local talents to stimulate the company culture as well as gather more perceptive thoughts.