Analyze the strategy followed by Philips and Matsushita. How and why do they differ?
Philips and Matsushita followed different strategies regarding international business. Philips, despite having different competitive players in the market, focused on the limited product line to sustain sales and profitability. In the tough market conditions, the management of the company focused on the country-specific market conditions. When conducting business in different countries, the company focused on market responses and created a different product line. The product line of TV sets according to the local market needs in different countries was an example of it. The company considered the development and reorganization to meet the local needs. On the other hand, Matsushita maintained its global leadership by increasing the product line and development of the new products. Concerning internationalization, the company had a prominent strategy of expansion. For Instance, after the government’s pressure, the company initiated the plants in Southeast Asia and Central and South America. It is a fact that Matsushita depicted the “Operation Localization” in the countries through expanding the business. Globalization was enhanced through the VCR. The highly centralized operations were in the limelight, which justified the expansion strategy.
Thus, the strategy was different, as Matsushita followed the global operations and Philips followed the product development and market responsiveness.
Why was it so difficult for Philips the globalization of its strategy?
It was difficult for Philips to globalize strategy due to several factors. Globalization needed the acquisition or merger of the companies at that time. Philips lacked the Subsidiary Relations. In the international business operation, the company did not depict the localization process to build trust. Interestingly, the intentions of the company were towards the product development, brand, and channel management, and the purpose was to be lucrative. However, on the other hand, global business needs more product diversification. The reorganization and outsourcing of the different product development process increased the cost of the company, which created hurdles in the global strategy. In the growing global recession, the company had to carry out the new product portfolio with a better marketing strategy. Refocusing the business operations and change with the passage of time created spikes in global growth. It took a lot of time to decide what was to be focused on being a global leader. Also, instead of conducting the acquisition process in the countries, outsourcing the product and operations seemed controversial. Thus, these were the factors which created the barriers in globalization in the presence of immense competition in the consumer electronics market.
Who is better positioned to compete in the future?
They performed well in the positioning process to compete for the future. The management of the company carried out the technology localization and design to meet the local requirements. Comparatively, the company conducted a differentiated strategy along with the low prices and high quality. The purpose of the company is to make the strongholds in the different countries, and despite considering the profitability initially, the focus on the localizations and differentiations held to position better in the minds of the customers. With the expansion process, the company expressed technological and cultural integration. For Instance, the company, to compete in the future, maintained the integrations with the different Japanese electronic countries. The integration with the local giant helped the company to use the local channel to position the products in the minds of the customers. Due to the strongholds for the company, it seemed tough for the new arrivals and acquisitions in the market to concert the customers. The value-driven products and innovation were in the fame for better positioning it resulted in a strong position in the markets. The future growth of the company was promising due to these strategies and initiatives, and these seemed quite different from Philips, as their expansion and integration focus was limited.
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