Group #2--- Verena Mooyoung Alex Umer Thomas Marina
A Case on Global Integration
or Local Responsiveness –
“Phillips and Matsushita”
Linköping University
Contents
• PHILIPS
• Matsushita
• I/R GRID
• OBSTACLES
• MAIN ISSUES &
FURTHER STEPS
• CONCLUSION
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Giant of consumer electronics company
PHILIPS
PHILIPS
Decentralization
Equipment
Self-sufficiency
One-product strategy
PHILIPS
Consumer preference
Strong research capability
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Distinctive competencies
1
2
PHILIPS
Localization
Responding to market condition
Technology
Development capability
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Distinctive Drawbacks
1
2
3
PHILIPS
Sales
Difficulties on sales
Fragmentation
Implementation
Slow
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Direction
Efficient
Leverage
PHILIPS
AIM
Redefine Power
of NOs
Change to
Marketer &
Inventor
Streamlining of
Organizational
Structure
Focus on
Existing
Technologies
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Why they are No.1 Company?
Matsushita
Fast Introduction
Matsushita
Awareness
Outsourcing
Matsushita
Integrated approach
Efficiency
One product – one division
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Distinctive Competencies
Matsushita
Competition
Centralized control
Finance
Matsushita
Lean operation
Adaptive
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Distinctive Drawbacks
Matsushita
Distribution
Centralized control
Matsushita
Brand
Non-core competencies
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Direction
Matsushita
AIM
Higher Local
Responsiveness
Collaboration
Search for
Strong
international
Structure
Move of
Operational
Control
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I/R Grid
Matsushita
Matsushita
Year 1970
2000
1990
Integration
Non-related Producing
I/R GRID
Value
Management
Value
Management
PHILIPS
Slow implementation
Research
Research
Centralized
Applied product and
Centralized
process
innovation
Basic
scientific
innovation, develop
new products
Development
Development
Manufacturing
Manufacturing
Responsibility
Marketing
Marketing
Service, etc.
Service, etc.
Centralized (PDs)
Decentralized (NOs)
Develop and manufacture
products
Market and service products within
Decentralized
(NOs)
national
markets
Adapt, manufacture, market, and service products within
national
markets
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Obstacles - Internal
PHILIPS
Matsushita
OBSTACLES
• Low control
• R&D not market-oriented
• Frequent CEO changes
• Job cuts  Loss of knowledge
• Ethnocentric approach
• Lack of brand awareness
• Lack of distribution networks
• Unwillingness of management
• Poor efficiency
• Lost focus of core competencies
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Obstacles – External
PHILIPS
Matsushita
• Great depression
• Slow growth after war
• War II bombardment
• Pressure from government
• Loss of leadership
• Japanese economic crisis
• Fast paced industry
• Fast paced industry
• Increasing competition
• Increasing competition
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Main issues and further steps
PHILIPS
Concentration on
core-activities
ComplicatedISSUES
MAIN
structure
& FURTHER STEPS
Outsourcing
Loss of
control
Balance of
productivity &
design
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Main issues and further steps
Decreasing
domestic demand
Increasing
competition
Financial
losses
Matsushita
Customer service
orientation
Destruction and
creation program
Dependent
oversea offices
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Conclusion
Global
competition
Highly
segmented
markets
Sophisticated
customer
demand
CONCLUSION
Core competence
identification
Balance between
integration and
responsiveness
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The End
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