STRATEGIC MANAGEMENT

Strategic Management: Approaches At Philips And Matsushita



Strategic Management: Approaches At Philips And Matsushita

Introduction

Approaches Phillips versus Matsushita

The technology capabilities should not be a trade-off for cost cutting purposes as it is where Philips? core competency lies at. Customer-focused approaches like quality after-sales service or intensive market researches should be conducted to promote the strength of its technology and branding. In order to tackle this challenge, we need (1) technology, (2) market sense, and (3) people.

First, Matsushita should establish an information system for technology and product development for all its subsidiaries. Global knowledge transfer is important to provide basic foundation and technical support for innovations.

Second, Matsushita should form cross-functional teams to investigate the local market. By employing a diversified profile of people, they can give findings or suggestions on various parts of operations like customer-relationship management, manufacturing, marketing, rather than just product development alone. This would improve the innovative and entrepreneurial atmosphere for product design, and even total quality management or company restructuring at the subsidiary.

Lastly, they should recruit more local talents to stimulate the company culture as well as gather more insightful thoughts. They can also employ the dual leadership concept in Philips by partnering the operation manager with a technical manager so that technological breakthrough can be more emphasized throughout the company.

Ans.1

Looking back at Philips history, research and development efforts were vital to the Philips success. The importance of research and development is evident in the physics and chemistry lab that developed a tungsten metal filament bulb that was a great commercial success enabling Philips to compete against its giant rivals.

There were three factors which contributed to Philips success in the consumer electronics market during the post war era.

First, the intense focus of the management on Research & Development activities allowed it to introduce high quality products and develop new products which subsequently led to market leadership in those product segments. For example, the radio which Philips developed in 1926 enjoyed a 20% share in the market within a decade. The management of Philips invested heavily in updating the machinery and equipment of the plants along with changes in technology. This was in sync with their efforts to remain a technology focused organization. Philips was regarded as a leader in industrial research.

Second competency that Philips developed was the internal competition between its commercial and production divisions. Since the establishment, the founding brothers of Philips engaged themselves in a positive battle. The aim of the engineer brother was to produce more than what his salesman brother could sell, and vice versa. This ideology was reflected throughout Philips' manufacturing and sales divisions and created a pseudo incentive for the employees within these divisions. The company also believed in contributing to the welfare of its employees and shared their profits with its employees.

Third was its creation of sales organizations in US, and National Organizations (NO's) within 14 European and other international markets. These markets were characterized by growth opportunities and demanding ...