Philip and Matsushita ( now Panasonic) are renown worldwide for electronics, with Philips based in Amsterdam and Matsushita in japan. They launched some strategies and organizational restructuring in 2001, aimed at retaining their competitive edge. This they achieved by use of different strategies each of which were adopted by the individual companies. Philips had based its achievements on an establishment of independent national organizations, while Matsushita, on the other hand, depended on its central processes in Japan. Some of the strategic issues that Philip faced were; first, there was a struggle with the national organizations, which greatly influenced top management. The conflict involved power and responsibility. The second issue was late entry in the market, due to decentralization, that delayed entry of new products in time. For Matsushita, the main strategic issue was its centralized organization, that lacked innovation, leading to production of similar products.
Philips restructured its strategies on the strengths of the national organizations. It was able to gain a leadership position after the conflict based on the decentralization. It was at the time when technological, economic and political forces favored local; markets responsiveness. However, due to lack of organizational structure in marketing and manufacturing, Phillips lost its leadership position to Matsushita.
Matsushita, on the other hand, had major competencies that favored its market position. Their attempts to restructure included; building of the company based on fairness, through opening up of national shops in an attempt to extend product lines. This led to a successful and efficient production and encouraged good relationships. They also sought to develop an innovative capability through operation localization and technology. This resulted into overseas productions remaining dependent on the centralized organization. In addition, they brought foreign subsidiaries under the control of the parent company. Due to the decentralized design of Philips, it emerged as the market leader by reacting to the changing environment through implementing a global functional model.
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