Philips vs Matsushita Swot Analysis Essay

933 Words May 11th, 2011 4 Pages
Philips:

Internal Strengths:

* 1900 – Philips was third largest light bulb producer in Europe due to recruitment of Gerard Philips’ brother, an excellent salesman. (C85) * From the beginning, Philips developed a tradition of caring for workers. Built company houses in Eindhoven along with bolstering education and paying employees very well (C85) * Philips refused to diversify in the beginning, keeping a one-product focus and creating significant innovations (C85) * Became leader in industrial research, which led to development of a tungsten metal filament bulb that was a great commercial success (C86) * 1912 – Philips built sales organizations in U.S., Canada, and France (C86) * 1919 – Philips entered Principal
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Philips invented audiocassette and microwave in 1960’s but let its Japanese competitors capture the mass market (C87) * From 1971 to 2001, 7 chairman experimented with reorganization, yet financial performance remained poor and global competitiveness was still in question (C87) * During 1971, Hendrick Van Riemsdijks’ newly created organization assessed disadvantages of their matrix organizational structure, “…As operations become increasingly complex, an organizational form of this type will only lower the speed of reaction of an enterprise.” (C87) * Van Riemsdijk proposed tilting the matrix toward the PD’s to allow Philips to decrease number of products, build scale by concentrating production, and increase flow of goods among NO’s…implementation was slow (C90) * When Van der Klugt was appointed in 1987, Philips had lost its long-held consumer electronics leadership position to Matsushita and was one of only two non-Japanese companies in the world’s top ten (C90) * Net profit margins lagging at only 1 to 2% (C90) * Unanticipated losses of $2.5 billion in 1990 and a class-action lawsuit by angry American investors led to Van der Klugt and

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