PHILIPS AND MATSUSHITA COMPANY
Q.1 Challenges facing Philips and Matsushita companies.
Philips Company was faced with a number of challenges; this is because in 1960 the creation of European common market introduced trade barriers which resulted to the rationale for independent country subsidiaries. The number of transistor based type of technologies demanded a large production runs that most of the Philip Company were unable to justify, while majority of its competitors were moving production of electronics to new facilities and environment. Secondly there was the problem of power struggles between the national organization managers and product development managers (PD), as PD managers were unable to gain control over a number of manufacturing operations from NO. This led to organizational difficulty of closing of local plants which had led to slow implementation of any process (Bartlett, 2009 pp.2). During the years when the company decided to lay off some of its employees they were faced with certain problems: they were obliged to compensate a huge amount of money as a compensation send off which did take a huge part of their cash flow. Secondly is that the middle management lacked the morale to work effectively and efficiently as a result the production decline down, this led the company to ignore the worldwide market. Lastly it became apparent for the company not to be able e to change around its operations due to economic conditions which included: competition from rivals, global crisis experience in the industry.
Matsushita was faced with external problems where during its operations it was unable to find any American company that was willing to collaborate together to internationalize its products. Despite having its sales increasing rapidly its centralized structures were also questioned by their different host countries, thus resulting to lower credibility which in turn made them to lose a substantial market niche (Bartlett, 2009 pp.3). Economically the company was faced with the problem of the currency rates and the ‘Global tech’ recession, the Japan currency YEN made it unprofitable to make exports of its products overseas, it was less valued to the rest of the currencies, while the recession that affected the technology and electronic market brought down business to some levels affecting the business operations.
Q.2. Localities Philips and Matsushita companies
It matters economically and socially to have both companies to be located in their mother or parent companies, Philips in Holland and Matsushita in Japan. While both companies were in the process of expanding their products to foreign countries a number of problems resulted. Firstly the current currency within the countries makes it uncompetitive and unprofitable to make any kind of exports, secondly it becomes difficult to satisfy the needs of foreign customers. Both companies have established that the local markets within their countries provide untapped resources and opportunities to capitalize on, they also provide god avenues where research and development of …