Philips Case Study

Two major competitors in the global consumer electronics industry, Philips originating in the Netherlands and Matsushita originating in Japan have both had vast histories. They both implemented their own distinctive strategies and experienced significant triumphs as well as defeats on their journeys to company success. Philips’ success can be attributed to a diversified worldwide portfolio of responsive national organisations, whereas Matsushita focused on a centralised approach in Japan, allowing them to be highly efficient and an effective global competitor. As the companies developed and were exposed to certain challenges over time, they made several changes to their organisational structures and strategies in response to their respective external environments. It was evident that the CEOs of each company were leading their organisations in completely different directions and outsiders wondered how Philips and Matsushita’s internal changes would influence their prolonged competitive battle.

Philips was established in 1892 by Gerard Philips and his father in Eindhoven, Holland specialising in small light-bulb manufacturing. They recruited Gerard’s brother, Anton to assist them when a business venture almost failed as he was experienced in sales and management. By 1900, Philips had gained momentum and was the third largest light-bulb producer in Europe. Matsushita was founded in 1918 by Konosuke Matsushita who invested ¥100 to produce double-ended sockets in his home. This proved to be worthwhile as the company experienced rapid growth, broadening their products to battery-powered lamps, electric irons and radios. On Matsushita’s 14th anniversary, Konosuke announced a 25-year corporate plan to his employees which was divided into 25 year sections to be fulfilled by successive generations. The post-war boom saw the introduction of new products including, TV sets in 1952, transistor radios in 1958, colour TV, dishwashers and electric ovens in 1960. By the late 1960s, Matsushita had opened 25,000 domestic retail outlets which accounted for 40% of appliance stores in Japan.