Philips versus Matsushita Case Analysis
Competing Strategic and Organizational Choices

Erik F. Spear
Lynelle C. Vidale
Vannessa. D. Williams
IMAN601, Section 9040
Dr. Mariana Feld
November 2, 2010

Philips versus Matsushita Case Analysis
Competing Strategic and Organizational Choices
Introduction
Royal Philips NV and Matsushita (owner of the Panasonic brand among others) are two of the world’s biggest electronics multinationals. After successfully building their global empires in the early twentieth century, they have both suffered financially in recent decades. It is therefore interesting to look at why this has happened and what their future prospects are.

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This approach was also reflected in its approach to marketing, particularly distribution channels, where it downsized the number of retail chains it serviced in the mid 2000s from 600 to 200, focusing on seven giants. Additionally, in countries like India, it brought health services to the people in rural areas. One could perceive Philips’ weakness to be in the area of eliminating products that had been considered core competencies, such as the semi-conductor business. Philips’ ability to produce semi-conductors globally, even back to the days of PDs and NOs, had long produced consistent cash flow for the company. In the mid 80s, three of the four businesses defined as core were linked: components, consumer electronics and telecommunications and data systems. Taking away the focus on its core competencies meant that the company stood to lose revenue from these products, or have to outsource their production to companies who would be considered competitors. The global recession has only heightened the competition in the consumer electronics market.
Matsushita’s Organizational Structure: Strengths and Weaknesses

The strength of Matsushita came with the transformation of the company by the CEO, Kunio Nakamura, starting in June 2000. His “Value Creation 21” or VC 21 planned was to build a “super manufacturing company” based on strong technology-based