Innovation and Philips

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1) Philips became the leading consumer electronics company in the world in the post war era by having a strong Research & Development effort, their independent National Organizations, and the strong communication between these National Organizations. Philips continued this tradition with fourteen product divisions responsible for development, production and global distribution which was another contributing factor to Philips’ success is the National Organizations. Philips distinctive competence they built were the National Organizations which had a great advantage in being able to sense and respond to differences in their local countries, and eventually product development became a function of local market conditions. They also had transferred its overseas assets into trusts in Great Britain and the U.S and they moved the bulk of their research staffs to England, and their top managers to the United States. There distinctive in competencies were that Philips was no longer able to make decisions ad a single company to bring new product technology’s to the market, but had to have each National Organization take care of their own problems. Management lost the ability to manage the whole company as one. They tried to set up Product Divisions, but those failed also. 2) Matsushita succeeded in displacing Philips as the N0 1 in consumer electronics with a unified global strategy, increased volumes enabled Matsushita to drive costs lower, prices lower, and eventually they overtook Philips based on the strength of their manufacturing operations. Matsushita distinctive competencies were that they stayed in control of the company’s subsidiaries and by having a unified global strategy that allowed them to drive down coast and strengthen their manufacturing operations. There distinctive in competencies were that they did not expand innovation and they were unable to develop innovative overseas companies. 3) Both Philips and Matsushita changed their companies some things...
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