Philips vs Matsushita Case Analysis
Philips versus Matsushita Case Analysis
Competing Strategic and Organizational Choices
Erik F. Spear
Lynelle C. Vidale
Vannessa. D. Williams
IMAN601, Section 9040
Dr. Mariana Feld
November 2, 2010
Philips versus Matsushita Case Analysis
Competing Strategic and Organizational Choices
Introduction
Royal Philips NV and Matsushita (owner of the Panasonic brand among others) are two of the world’s biggest electronics multinationals. After successfully building their global empires in the early twentieth century, they have both suffered financially in recent decades. It is therefore interesting to look at why this has happened and what their future prospects are.
Porter’s Five Forces Analysis: Strengths and Weaknesses
Porter (2008) asserts that in every industry there are five forces forming the competitive nature of the industry, and understanding how they interact provides a firm with an opportunity to build an entry strategy that can improve its competitiveness and profits (p. 80). These forces are threat of new entrants, threat of substitutes, bargaining power of suppliers, bargaining power of buyers, and intensity of rivalry, and they must be assessed for each industry on an individual basis. The strength and weaknesses of each of these forces indicates the attractiveness of the industry and therefore, must be continuously evaluated not only from an industry perspective, but even more so, by each manufacturer/firm on an individual basis. One of the main reasons for Philips’ early success is arguably because of its focus on manufacturing light bulbs. Other electronics organizations were keen to diversify (Hill), whereas Philips concentrated solely on producing light bulbs and developing new technology for this product. It was, thus, able to build a competitive advantage based on technology, and subsequently, became a market leader in this field. In addition to its technological development, Philips overseas expansion was also a
Competing Strategic and Organizational Choices
Erik F. Spear
Lynelle C. Vidale
Vannessa. D. Williams
IMAN601, Section 9040
Dr. Mariana Feld
November 2, 2010
Philips versus Matsushita Case Analysis
Competing Strategic and Organizational Choices
Introduction
Royal Philips NV and Matsushita (owner of the Panasonic brand among others) are two of the world’s biggest electronics multinationals. After successfully building their global empires in the early twentieth century, they have both suffered financially in recent decades. It is therefore interesting to look at why this has happened and what their future prospects are.
Porter’s Five Forces Analysis: Strengths and Weaknesses
Porter (2008) asserts that in every industry there are five forces forming the competitive nature of the industry, and understanding how they interact provides a firm with an opportunity to build an entry strategy that can improve its competitiveness and profits (p. 80). These forces are threat of new entrants, threat of substitutes, bargaining power of suppliers, bargaining power of buyers, and intensity of rivalry, and they must be assessed for each industry on an individual basis. The strength and weaknesses of each of these forces indicates the attractiveness of the industry and therefore, must be continuously evaluated not only from an industry perspective, but even more so, by each manufacturer/firm on an individual basis. One of the main reasons for Philips’ early success is arguably because of its focus on manufacturing light bulbs. Other electronics organizations were keen to diversify (Hill), whereas Philips concentrated solely on producing light bulbs and developing new technology for this product. It was, thus, able to build a competitive advantage based on technology, and subsequently, became a market leader in this field. In addition to its technological development, Philips overseas expansion was also a
References: Hill, C. (2005). International Business: Competing in the Global Marketplace, (5th ed). New York: McGraw-Hill. Porter, M. (2008, January). The five competitive forces that shape strategy. Harvard Business Review, 86(10), 78-93. Retrieved October 10, 2010, from ABI/Inform Database. Porter, M.E. (1980). Competitive Strategy. New York, N.Y.: Free Press. Porter, M.E. (1990). The Competitive Advantage of Nations, London. Macmillan Business.