Business Case Study Assignment: Philips Versus Matsushita

Philips Versus Matsushita
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Company Growth
The electronics manufacturing industry is one that riddles with aggressive competition. Some the companies that have made the competition into an epic battle for supremacy are Philips and Matsushita. Philips is a Dutch company while Matsushita is from Japan. The two companies since the early nineties were involved in what is described today as epic competition in the electronics manufacturing industry. They both made some significant strategies to match and counter the level of competition between themselves and even set trends within the industry. From the different approaches taken by the management at the two companies, they both emerged to have different capabilities (Bartlett & Beamish, 2011). While Philips focused on a worldwide responsive portfolio, Matsushita, on the other hand, focused on its competitiveness globally, with close reference to highly efficient and centralized operations. Much of the strategies applied by the two companies also reflected the challenges that the companies faced in the early years of the 21st century. From the strategies that were applied during the 21st century, the companies continuously grew apart in terms of development, as they tried to forge new initiatives to keep the companies from sinking in the market turbulence at the time. A reflection on the companies today also indicates a divergence element stemming from the different strategies and approaches that the companies applied through time (Bartlett & Beamish, 2011).
Changes by Philips Through Time
Started in the year 1892, Philips took off as a small light bulb company. Gerard Philips with the assistance of his father started out small and later on shaped the company into a world class brand and a household company. One of the winning strategies that the company used was concentrating on making light bulbs. This was at a time that most of the other companies in the industry diverged into making a host of other electronic products. To achieve this level of specialization and make traction in their success in the early stages, they invested in research. They developed research labs for chemistry, physics and general science (Bartlett & Beamish, 2011). Using the labs, they were able to develop the first tungsten metal filament for their bulbs, which was a huge success. This element of innovation is one of the leading characteristics that the company adopted early on. They also set aside resources, to ensure that they constantly renovated their production systems, such that every time there was a newer production system they would scrap the old one and upgrade to the newer one. This meant that the company was always ahead in terms of the production systems that they used to manufacture their products, ensuring both efficiency in their operations and quality in their products.
From their success locally, they were later on able to make the decision to sell globally. This was a crucial step relative to the fact that they now were able to compete globally, selling bulbs in countries such as Australia, Canada, Japan, Russia and Brazil (Bartlett & Beamish, 2011). To ensure that it still had the edge to conquer the foreign markets, they joined up with some of the local companies in the countries where they set up sales operations. This ensures that they had relatively easy time getting accepted in those markets. This was a crucial move, relative to the fact that, there is an element of resistance that associated with new products. As such, using the market base that the local companies have built, it is much easier for foreign companies to edge into the market (Bartlett & Beamish, 2011). At the same time the company applied an autonomous approach in most of the countries across Europe along with Australia, China and Brazil.
The company also changed strategy, to now produce x-ray tubes, vacuum tubes and radios. This ushered in a new approach by the company, from the traditional dominance in bulbs. However, it crucial to note that, at the time of the changes, the bulbs market was also stretching thin and the company needed to change it tact to stay in the competition. This was before the great recession. This was followed by demise from the First World War (Bartlett & Beamish, 2011). Before the war, the company had some significant level of autonomy for the various national organization, most labs and the managerial operations were moved to Europe and the United States. As such, the national organizations were given significant autonomy, with much of the responsibility at Eindhoven being global distribution, production and development. This was a crucial change and move, as at the time the company needed to protect it major assets from the losses caused by the war (Bartlett & Beamish, 2011). The autonomy experienced at the national organizations allowed the company to be in a position to leverage their home advantage. At the same time the company achieved great competence with reference to beating the various challenges associated with different market standards.
Strategic Impediments
The different responsibilities between the product divisions and the national organizations however brought about incompetence (Bartlett & Beamish, 2011). This was after the creation of the European Common Market, which came with trade barriers and diluted the benefits that the company was enjoying relative to the independent subsidiaries (Smehro, 2016). While Philips tried to maintain its national organizations, most of the competitions were now moving production to areas that had lower wages such as South America and Asia. As a re...