Philips versus Matsushita: A New Century, a New Round
1. How did Phillips become the leading consumer electronics company in the world?
Philips started its business in 1892 in Eindhoven with its basic product, a light bulb. The company focused on only producing light bulbs at the beginning, and could therefore specialize and create significant innovations. The rapid growth to being the leader in industrial research, helped to broaden its product line. During the post war era Philips gained success and the company was able to adapt to country-specific market conditions. This helped Philips expand to other countries and also generated in a broadened sales volume. Phillips also developed National Organizations (NO´s) in different countries, which helped to serve other markets more easily. NO´s were after the Second World War helpful to distribute products to the customer while taking care of specific customer needs as well as country and market needs. This greatly increased self-sufficiency. The company´s change to a multi-national company in the 1930s was also a specific point why Phillips was the leading consumer electronics company.
How did Matsushita succeed in displacing Philips as No. 1?
Matsushita focused its competitiveness in high quality, low cost, and standardized products during the 1970s and 1980s. Also they had rapid product and process innovation and their company wanted to focus on exporting sales to world markets. Matsushita represented 40% of appliance stores in Japan as they capitalized greatly on their broad line of 5,000 products by opening 25,000 domestic retail outlets. This resulted in a direct access to market trends and consumer reaction as well as an increase in sales volume. Being the first Japanese company to adopt a divisional structure gave each division of the company a clearly defined profit responsibility. This structure created a small business environment to maintain growth and flexibility. It also generated...
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