Philips vs Matsushita

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Philips vs Matsushita: A New Century, A New Round HBS 9-302-049

Discussion Questions:

1. How did Philips become the leading consumer electronics company after the Second World War and what were its key capabilities? (NOs-organizational development)

Post-war situation:
* (At the very beginning, Philips made only light-bulbs, this one-product focus and Gerard’s technological prowess enabled the company to create significant innovations. * The labs developed a tungsten metal filament bulb that was a great commercial success and gave Philips the financial strength to compete against its giant rivals. * Philips started to export in 1899.

* In 1912, Philips started building sales organizations in the US, Canada, and France. In many foreign countries Philips created local joint venture to gain market acceptance. * In 1919, Philips entered into the Principal Agreement with General Electric, giving each company the use of the other’s patents. Philips conducted a decentralized sales organization with autofocus marketing companies in 14 European countries, China, Brazil, and Australia. * During the period, Philips broadened its product line significantly. * During the late 1930s, it transferred its overseas assets to two trusts, moved most of its vital research laboratories and top management. Therefore, individual country organizations became more independent during the war. * Built post-war organization on the strengths of the national organizations.(NOs) * Their greatly increased self-sufficiency during the war had allowed most to become adept at responding to country-specific market conditions-a capacity that became a valuable asset in the post-war era. After War:

* Cross-functional coordination capability.
* Foreign operations.
* Decrease the number of products marketed, build scale by concentrating production, and increase products flows across NOs. * Close the least efficient local plants and convert...
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