Philips Versus Matsushita Harvard Case Solution & Analysis




Philips’ timely decision making capabilities enabled it to re-build its national organization, which enabled Philips to more effectively target the consumers and develop its product in accordance with consumer requirements and economies.

Product development and innovative approach to target and deliver new products has been Philips’ core competency, which had given it competitive advantage in electronics industry.


Philips’ attempts to cost cutting measures diverted its focus from its core operation and which caused problem in running the business operation effectively and conflicts between PDs and NOs raised internal competition within the organization. In addition to this, responsibilities of PDs and NOs were not clearly understood and addressed by the management.

Moreover, cost cutting measures such as layoffs resulted in employee de-motivation; meanwhile, it also affected its human resources competencies through layoff decision.


Philips has an opportunity make agreement with other electronic producers through licensing this licensing approach will enable Philips to achieve revenue growth; meanwhile, this approach will avoid the consequence of failure. Meanwhile, Philips foreign sales organization provided an opportunity to capitalize on its foreign revenues in order to develop its brand and presence in overseas market.


Since, wage rate was comparatively low in Asian markets that gave Asian manufacturers cost advantage over Philips and badly affected its competitive position in the electronic market. Meanwhile, the technology industry was very volatile due the very quick innovative products and technologies being launched. In addition to this, economy is also facing recessions periods which makes it more difficult to cope with technological changes.



Matsushita’s large scale production capabilities provided it with the flexibility to meet changing demand, meanwhile, its large scale production capabilities has enabled in order to meet demand of its competitors who are outsourcing their production. Moreover, it had established its policies and procedures in order to encourage internal competition, which led it to grow in terms of revenue and improved the quality of products.


Matsushita can develop its own research and development facilities, which will let it introduce innovative and developed product that meet its consumers’ choice. In addition to this, geographical centralization of operations will improve operations and will enable the proper flow of direction on geographical basis. Matsushita has the opportunity to develop its operations into Asian countries in order to reap the low cost production advantage through low wage rate of Asian markets.


However, Matsushita does not have enough resources to finance the research and development activates in order to develop innovative products. Meanwhile, increase centralization de-motivates the management of foreign operations and they may not play an active role in the achievement of organizations regarding revenue and profit targets. Increased internal competition may cause failure of goal congruence among different divisions of organization because in order compete with internal divisions managers may take in appropriate action, which are not in favour of organization’s overall objectives.


Since Matsushita follows innovative products of its competitors and if a new technology product is launched with copy rights then it will not be possible for Matsushita to mimic that product. Meanwhile, its corporate customers will be lost due to the increase in wages because it has got the outsource business due to low cost advantage and if wages raise Matsushita may not be able to produce low cost productions.



Restructure the corporate strategy in order to match with global operations

Philips should develop its corporate strategy that meets overall needs of its operations such as its policy should encourage the managers to take advantage of local circumstances in order to reap economic benefits such as using low wages areas in order to control cost and sell its products at competitive prices.

Develop organization culture in order to develop standard products

In order to control its operation and business division Philips should restructure its culture and implement such policies, which will help standardize its products, meanwhile, maintaining autonomy of national organization so that they are not de-motivated and do not take the perception of reorganization as limiting their span of control...............................

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