1.Briefly describe reasons for Phillips and Matsushita to operate internationally. Why do they do it? Describe the international strategy of Phillips and Matsushita using the international strategy classifications we discussed in class (e.g., localization, transnational, global).
Philips and Matsushita are two electronic (equipment and service) based powerhouses who had to expand their business to the international market. One my ask why they needed to operate internationally… each company, Philips and Matsushita, wanted to stand in front of their peer companies as the market leader in the industry. In order to do this, each company would go through various changes, some of which hurt and some of which …show more content…
Although Philips could adapt to changing local markets, they had one factor going against them. Philips was late to market on a number of occasions due to their highly desterilized structure. This factor gave companies like Matsushita the upper hand. Philips did have an upper hand when it came to technological innovation. They had the ability to take advantage of local markets and produce, unlike Matsushita, which relied on dependence of competitor’s innovations. One of Philips reasons for initial success was the one product focus strategy. They were able to concentrate on one product rather than a broad range of products leading to out performing competitors.
Matsushita’s strategy also affected their performance based on their international strategy. Due to their firm being highly centralized, change did not come very quickly for the company. Slower changes meant slower adaptation to changing markets the company was in contact with. Also, it is well know that Matsushita has never been an innovation driven company, they are merely a “copy cat” of other companies. Matsushita relies heavily on other competitors’ innovations and is able to mass-produce the product at a lower cost because of the reduced production costs in their area of operations. Although this stance is somewhat risky, it has paid off for Matsushita in the past. One instance when Matsushita outperformed Phillips was when local markets saturated