Phillips Case
San Diego State University
PHILIPS VERSUS MATSUSHITA:
THE COMPETITIVE BATTLE CONTINUES
MGT 405.03
Instructor: Eva Nicasio Mercier
17 March, 2014
From their inception, both Matsushita and the Philips were entrenched with a strong foundation and close ties to their respective creators Gerard Philips and Konosuke Matsushita. Gerard, with his technological prowess, coupled with his brother’s excellent salesmanship, enabled the company to create significant innovations. They challenged each other in a productive way that propelled the company leading the way for future Philips employees. That was in 1899 and lots of time has passed since then. Their history shows that holding on too tightly to the original strategy can prove extremely costly for firms. In 1918, Matsushita was created by a 23 year old Konosuke Matsushita and similarly was created on a solid foundation of strong beliefs and values exemplified by the company creed and in the “Seven Spirits of Matsushita,” which provided the basis of the “cultural and spiritual training” all new employees received on joining the company. My analysis will be of two companies’ strategies born on similar traditions from very different geographical regions with the same goal in mind of capturing the most market share within the same industry. The Philips Company rapidly grew and Holland’s small size forced Philips to look abroad for enough volume to mass produce. In 1899, they began selling in diverse markets such as Japan, Australia, Canada, Brazil, and Russia. The first of many external factors that Philips faced was during the Great Depression, which brought with it trade barriers and high tariffs and Philips was forced to build local production facilities abroad to protect its foreign sales of these products. This started a trickle effect throughout the company in which more and more of the company was beginning to move further away from the parent company.
PHILIPS VERSUS MATSUSHITA:
THE COMPETITIVE BATTLE CONTINUES
MGT 405.03
Instructor: Eva Nicasio Mercier
17 March, 2014
From their inception, both Matsushita and the Philips were entrenched with a strong foundation and close ties to their respective creators Gerard Philips and Konosuke Matsushita. Gerard, with his technological prowess, coupled with his brother’s excellent salesmanship, enabled the company to create significant innovations. They challenged each other in a productive way that propelled the company leading the way for future Philips employees. That was in 1899 and lots of time has passed since then. Their history shows that holding on too tightly to the original strategy can prove extremely costly for firms. In 1918, Matsushita was created by a 23 year old Konosuke Matsushita and similarly was created on a solid foundation of strong beliefs and values exemplified by the company creed and in the “Seven Spirits of Matsushita,” which provided the basis of the “cultural and spiritual training” all new employees received on joining the company. My analysis will be of two companies’ strategies born on similar traditions from very different geographical regions with the same goal in mind of capturing the most market share within the same industry. The Philips Company rapidly grew and Holland’s small size forced Philips to look abroad for enough volume to mass produce. In 1899, they began selling in diverse markets such as Japan, Australia, Canada, Brazil, and Russia. The first of many external factors that Philips faced was during the Great Depression, which brought with it trade barriers and high tariffs and Philips was forced to build local production facilities abroad to protect its foreign sales of these products. This started a trickle effect throughout the company in which more and more of the company was beginning to move further away from the parent company.