PHILIPS VS

MATSUSHITA

BY:VANIA UTAMI, HENDRY LUKITO, PI-JEN HSUEH

BACKGROUNDPhilips

• Founded in 1892 by Gerard Philips in Eindhoven, Holland

• Innovation and product development core strengths:

• Single product focus

• Gerrard’s Technology Prowess

• Decentralized, highly autonomous responsive national organizations

• Technology-driven innovation

Matsushita• Founded in 1918 by Konosuke

Matsushita in Osaka, Japan

• First Japanese company to adopt the divisional structure

• One-product-one-division

• Internal competition among divisions

• Matsushita built its success on its centralized, highly efficient operations in Japan

• Market-driven rapid innovation

VALUE CHAIN

Research Product Development Manufacturing Sales &

Marketing Services

Philips

Centralized initial research & innovation

Multinational/decentralized management, product development, manufacturing, sales and services through PDs & NOs within national/local market

Research Product Development Manufacturing

Sales & Marketing Services

Matsushita

Centralized operations: research, innovation and product development.

Marketing and Services within national market

Centralized Decentralized

SUCCESSIVE LEADERPhilips

• Gerard Philips and Anton

• Van Riemsdijk and Rodenburg

• Wisse Dekker

• Van der Klugt

• Timmer

• Boonstra

• Kleisterlee

Matsushita• Konosuke Matsushita• Yamashita• Tanii• Yoichi Morishita• Kunio Nakamura

NET INCOME

CHALLENGES FACEDPhilips – Too Decentralized• Powerful and autonomous

National Organizations (NOs)

• Lack of company-wide strategic among NOs

• Lack of accountability in NO/PD matrix

• Management by Technical and commercial consensus

• Slow of respond

• Inefficient production due to local production centers

Matsushita – Too Centralized• Highly centralized services:

• Centralized product development

• Subsidiaries too dependent to parent company

• Less responsive to customer demand and preference

• Communication between overseas subsidiaries and parent company

• Product Divisional structure

• Too deep competition can make an internal conflict

LESSON FROM CASES

• We need to Balance the decision making between Centralized and Decentralized

• All the operation decision need to take by subsidiaries while strategic decision need to consult to HQ

• My dream company which is Samsung has similarity with Matshushita. Almost the decision is decided by HQ, but some operation decision is decided by subsidiaries, like technical issue in plant, employee recruitment , after market service