Philips vs Matsushita Case

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Diego Cardoso Arango – ID A01311240 Campus Bogotá – June 5th 2012 Philips and Matsushita (now know as Panasonic) are two of the most recognized electronics corporations worldwide and both had similar beginnings, as they were single-product companies that had rapid growths and that eventually encountered that their local markets weren’t big enough for their expansion. Through the last century they have experienced lots of changes in their organizational structures in their race to become the top-electronics firm in the world, but not always having the results they were expecting. Philips is a Dutch company founded in 1892 that started as a small light bulb factory but that in less than a decade took a leading position in the European market. It didn’t take long for the company to became also a leader in industrial research, expand the business abroad and even create joint ventures with other companies to share knowledge (such as the Principal Agreement that signed with General Electric to share patents). During the first half of the XXth century, Philips built National Organizations (NOs) throughout the globe and relied heavily on the strengths of each of them, giving them independence and power to react to market conditions, built their own technical capabilities and define their product development strategies. Philips had a Decentralized Federation structure where each NO managed its own resources, with a high level of innovation in products and self-sufficiency, but with poor managerial controls as the centralized ‘Product Divisions’ didn’t have as much power as each individual NO, which made relations complex in this organizational matrix. Since the 1970’s, Philips have made several attempts to reconfigure the way the company is structured in order to be more competitive in a market where all its competitors had more cost-efficient operations. Seven

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