<Philips vs Matsushita>
1. How did Philips become the leading consumer electronics company in the world in the postwar era? What distinctive competence did they build? What distinctive incompetencies?
->The way that Philips became the leading consumer electronics company is thanks to focus on one product rather than diversifying in early days. So it became the leader in industrial research. And it had independent national organizations. It is because they fit the country-specific market conditions. And they built their own technical capabilities to address local market conditions. And related with prior efforts, it enforced market specific research by enhancing the R&D budget.
But Philips had the incompetence, too. Its product division had no real power. NO ignored main company’s welfare and focused on local profit only. And too many factories over the world caused the problem, too. Because of that, the cost became higher than other ways, such as outsourcing.
2. How did Matsushita succeed in displacing Philips as No.1? What were its distinctive competencies and incompetencies?
->Matsushita focused on VCR production. So it can have high volume allowed it to slash price quickly. And Matsushita had huge number of retail outlets. It assured sales volume and direct access to market trends and consumer reaction. And finally, one-product-one-division system caused internal competition.
But the problem of over-management had to send managers throughout foreign subsidiaries, so it caused huge cost. And Matsushita’s commitment to lifetime employment also caused huge cost, in contrast to other companies which outsourced in low-cost countries. Finally, Foreign subsidiary companies acted little more than implementing agents.
3. What do you think of the change each company has made to date-the objectives, the implementation, the impact? Why is the change