Matsushita Vs Philips


Both Philips in the Netherlands and Matsushita in Japan are big names in the production of electronics equipment. Although they were developed on different sides of the globe they both stated off on a very small scale, but have a very different organizational structure and strategies in both local and international scales. For example, Philips in Holland, back a very localised strategy whereas Matsushita have a very global strategy of standardisation.

Philips follows a matrix base where the decision making processes are decentralised, their staff, in particular Key staff are recruited from local people, and their overall strategy is one of technical innovation. On the other hand Matsushita has a structure that is in all senses the exact opposite as they are structured by hierarchical tiers of management so the workers at the grass roots level do not have an overview of the company or of the products. Their Key staff are generally recruited from ex-pats, and their strategy is based around fast followers of their products.

Philips relies on the more traditional strategy of working with and developing their products that have been identifies through local market knowledge. This sounds a very commendable process but they have no global strategy in place and there seems to be a continual power struggle with bureaucracy which in turn has had an impact on any new developments in the market place even through there is less completion within Europe. Philips is also known to outsource production of a lot of its larger appliances. On the subject of Europe, the Labour laws within the EU have made the cost of labour very expensive. Although Philips is a big name within Europe, they production record does not meet anywhere the same as the production record for Matsushita.

Matsushita on the other hand coped with high labour costs in Japan by outsourcing to Asian countries, they had to find ways of reducing production costs as there is fierce competition in Japan. But they have not just outsourced production to other countries they have opened new production plants in South America using a different brand name and have further added to their globalization portfolio by purchasing external companies in North America and Europe.

Although these companies are very different in their strategies they have both adapted to cope with the continually changing markets. But as in the case of a lot of manufacturing companies the CEO’s, were not always able to make the changes that helped the companies.

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