Philips vs. Matsushita

1670 Words7 Pages
Introduction Philips: As one of the world's largest electronics company, Philips which mainly produced lighting, household appliances, medical systems and equipment, was found in 1892. Philips always focuses on product quality, attentions to the treatment of employees, supports the development of education therefore it gets a good reputation from the society. Meanwhile, Philips continuously reforms and innovates during the past 100 years (e.g. development of technical capabilities and expansion geographically). The reforming experience is treasure. Referred to innovation, the change decided by Van Reimsdijk and Rodenburg in the 1970s was a starting point. Van Reimsdijk cited Philips’ shortcomings in the organizational structure of his report. Under his management, van tried to make products managers gain more control of power, but the company still existed power struggle inside. In 1982, the amount of the new global strategy was launched when Wisse Dekker became CEO. Under the impetus of the new policy, the plants which were lack of efficiency was closed in order to focus on its core business. Philip purchased Grundig and Westinghouse Electric business in North America. To stimulate profits, the CEO continued Van’s innovation. Unfortunately, the sales were still declining. In 1987, the world leader in electrical appliances had become Matsushita. The CEO--Van Derklugt analyzed Philips’ core and non-core businesses. Staffing had also done changes: reducing 3,000 employees in headquarters and experienced staff were sent to the first line. To reduce costs, Van continued to close the plants. However losses continued. Timmer took office in 1990 and reduce of staffs continued. To further focus on resources, he sold a variety of businesses. In addition, the expansion of software, services and multimedia services for the introduction of a new strategy became important. In

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