Matsushita Electric Industrial Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Matsushita is a leading global provider of electronic products. The firm offers a diverse product lineup ranging from video equipment, information communications equipment, home appliances, components, and devices. In fiscal 2007, Matsushita had sales of over $77.9 billion—second among Japanese firms after Hitachi, and fourth worldwide. Matsushita is often viewed as Sony’s rival, although the former is much stronger in entertainment and the latter more so in white goods. Based in Osaka, Japan, Matsushita has a truly international presence, with over 328,000 employees working in more than 45 countries worldwide. The company was renamed Panasonic Corp. in October 2008.

Established in 1918 as Matsushita Electric Housewares Manufacturing Works, Matsushita was formed by entrepreneur Konosuke Matsushita to launch his electric attachment plug. Under his leadership, Matsushita grew quickly during the interwar years, from 25 workers in 1918 to 6,672 workers in 1939. The firm offered a range of products, such as the electric iron, radio, and dry-cell battery. Matsushita offered 200 products by 1931, and more than 2,000 products by 1937. During World War II, Matsushita shifted away from the production of electric goods into the production of military goods.

During the Allied occupation of Japan, Matsushita’s business was severely restricted because of the firm’s participation in the war effort. Matsushita, however, gained permission to rebuild its business as an electrics firm. As Japan regained its independence as a sovereign nation in 1952, Matsushita moved quickly to strengthen its scientific and technological capacity through imports of foreign technology. The company formed foreign alliances with the Dutch electronics company Philips in 1952, established various manufacturing plants, and built a central research facility in 1953. By the end of the decade, Matsushita had established a strong market position in consumer electronics, particularly in white goods, and was prepared to expand abroad. Indeed, the firm established Matsushita Electric Corporation of America in 1959, National Thai in 1962, and a European sales office in 1963.

After listing on the Tokyo Stock Exchange in 1971, Matsushita gained much publicity in the 1970s and 1980s when it entered a videotape formatting war. Matsushita was the parent company of JVC, whose VHS format eventually won over Sony’s Betamax format. The firm’s success was attributed to its greater flexibility in collaborating with other firms, and responsiveness to consumers who tended to value longer running times and portability over technological sophistication.

Matsushita also gained some notoriety for its second-mover strategy. The company’s sales strategy was to identify new products that proved successful among rival firms and to launch similar products. What it saved in product development, Matsushita invested in an extensive network of affiliated wholesalers dedicated to capturing greater market shares.

In the 1990s, Matsushita ventured briefly into the entertainment industry. But while it acquired MCA in 1990, it sold 80 percent of its stake to the Canadian alcoholic beverages firm Seagram’s three years later. Matsushita also began to offer cell phones and digital television sets in step with the information technology boom. With rapidly changing market conditions, Matsushita also underwent a series of organizational restructurings that would streamline management and eliminate the duplication of businesses.

Matsushita is widely known for its founder, Konosuke Matsushita, who achieved renown as one of Japan’s leading entrepreneurs. He was credited for creating Japan’s first decentralized company in 1933. Under Matsushita’s guidance, the firm was long managed as a group of subsidiaries organized along product lines. These subsidiaries competed against each other to produce superior products within the Matsushita Group.

Matsushita currently offers a diverse range of products through several business segments, including home appliances, components and devices, Matsushita Electric Works and Panahome, AVC Networks, Victor Company of Japan. Matsushita derives around half of its revenues from Japan. With a 60 percent share of the domestic market, it has particular strength in household appliances.

Matsushita faces several challenges amid globalization and increasing competition. One is a threat from foreign rivals such as Royal Philips and Samsung, who have larger global market share, larger research and development (R&D) facilities, and more expansive distribution networks. In addition, the firm faces competition from companies in developing countries who can offer low-priced alternatives. As well, Matsushita faces increasing cost pressures from rising raw material prices. Matsushita’s future lies in its ability to capitalize on its brand image, form strategic alliances to pursue collaborative R&D, and expand its market reach, as well as invest in growing markets such as LCDs and semiconductors.

Bibliography:

Mitsuru Kodama, “Innovation Through Boundary Management: A Case Study in Reforms at Matsushita Electric,” Technovation (v.27/1–2, 2007);
Matsushita Electric Industrial Matushita Denki 50 nenshi [A 50-year History of the Matsushita Group] (Matsushita Electric Industrial Co., 1968);
McInerney, Panasonic: The Largest Corporate Restructuring in History (St. Martin’s Press, 2007);
Shimotani, Matsushita Gurupu no Rekishi to Kōzō [The History and Structure of the Matsushita Group] (Yuikaku, 1998);
Yamashita, The Panasonic Way (Kodansha International, 1987).

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