Philip Vs Matsushita Case

Which strategic management concepts are useful in the analysis of this case?

Environmental evaluation (macro scan), organization internal assessment, Porter’s national diamond framework, global strategy identification, analysis of structures of multinational corporations, value chain and horizontal and vertical integration concepts were useful in analyzing this case and formulating final recommendations.

Why do you think each of your selected concepts is useful for understanding this case?

External industry scans at various points of history helped me understand the underlying reasons why each company, Philips and Matsushita, developed and nurtured their current structures of corporation. It was important to understand why each company adopted a very different business strategy and organization structure to sustain its competitive advantage in the same industry throughout the years. In addition, understanding how horizontal and vertical integration had played their roles in the value chain gave me valuable insights into Philip’s and Matsushita’s strengths and weaknesses. Lastly, Porter’s national diamond framework helped me organize and assess both companies’ competitive advantages not only in the national context but also in the international context. It was an essential step in my analysis because it allowed me to distinguish the key distinctive competencies and key strategic issues, which became the basis for my

What strategic understanding did you develop as a result of this case analysis?

While most of us still associate Philips, a Dutch multinational electronics conglomerate, with its breadth in product offerings and notable achievements, the case study revealed that this electronics giant had been struggling to maintain its leadership position in the recent years.

Despite its humble beginning as a small light bulb company in the Netherlands, Philips quickly became an industry leader through its remarkable ability to innovate and adapt to local market trends in early 1900’s. Key to obtaining these distinctive competencies was Philips’ decision to decentralize the organization structure and to develop strong national organizations (NO) in the 30’s. Because each NO was capable of accurately accessing the local market demands for subsequent product launches in their respected countries, Philips became a dominant leader in the post-war era while others struggled to internationalize due to high trade barriers. However, when the creation of the European Common Market lessened these barriers in the late 60’s, NOs could no longer justify its high cost and inefficiency and Philips faced significant external pressure to change its business strategy to stay competitive in the dynamic business environment.

In an effort to compensate lack of cost competiveness and coherent global strategy, 7 CEO’s