Case Analysis
Philips versus Matsushita: A New Century, a New Round
Summary

This analysis is based on two corporations, N.V. Philips (Netherlands) and Matsushita Electric (Japan). The two companies both have experienced big changes and have different strategies and organizational capabilities now. With their distinctive operations and management, they got success and continued to compete with each other and occupied the leader position in global markets nowadays. The analysis discusses how they get success, what make them be successful, the changes they experienced, the impact of these changes and the reasons why changes are so hard for them. SWOT analysis is used to analyze Philips’ distinctive competences and incompetence. The …show more content…

In Philips, the matrix organization resulted in complicated relationship between leaders and subordinates, which made unclear defined profit responsibility for each division and lower the speed of reaction of an enterprise. The divisional structure was Matsushita`s fundamental step to internationalization.

According to the organization chart, Matsushita adopted one-dimensional operational management: all overseas divisions need to report to one department- regional operations, and plants or manufacturing sections need to report to appropriate product divisions, unlike matrix organization need to report to two more leaders. Moreover, in 1980s, Matsushita began to monitor measures of output, such as quality, productivity and inventory levels, instead of controlling input. This measure not only can enhance the efficiency and quality of production, but also saving cost of delivering materials or products from Matsushita`s domestic plants.

The “operation localization” in 1990 helped Matsushita`s overseas companies develop the innovative capability and entrepreneurial initiatives, however, these overseas companies still primarily depended on the central product divisions. In order to enhance their independent innovative capability and entrepreneurial initiatives, the operation localization need to be still implemented, because the long-term dependence on center might lead to lack of innovative