Matsushita3

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A medium-length presentation on Matsushita's global strategy and competitiveness, including recommendations. …

A medium-length presentation on Matsushita's global strategy and competitiveness, including recommendations.
Matsushita is Panasonic's parent company.

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  • 1. Matsushita: From National Exports to Global Innovation Presented by: Jesse Kedy
  • 2. Company Timeline - 2000: Production shifts to low-cost Asian nations: 50% of - 1977-85: MC factories and staff offshore - 1950’s: Trade insources VCR - Mgmt unwilling to restructure - 1918: or lay off staff (inefficient liberalization & production from GE, Company culture) lower shipping RCA, and Zenith. founded by - Investment in R&D incubator costs allow for Capacity increases Konosuke in CA internationalization 33-fold (prices drop) Matsushita 1920 1930 1940 1950 1960 1970 1980 1990 2000 - 1932: - 1960’s: Pressure - 1982: Operation from host governments Localization (LA) -1991: Acquires MCA for $6.1 250-year plan leads to opening of - 1985: VCR sales: billion. Vertical Integration unveiled (160 plants in South 45% of profits - 1989-1999: Excess capacity; employees) America & SE Asia. - New Pres.; re- New competition form China & First efforts to globalize centralization (GI) Korea; Japanese CE market plummets 50% - New Pres., decentralization (LA); Cost-cutting
  • 3. Issues of Global Competitiveness • Lack of Competitive Core Products – Excess Capacity – Innovation – Regional Market Preferences • Subsidiary Over-dependency/Corporate Culture – Local Consumer Needs – Employment Policies
  • 4. Company Strengths • Progressive outlook dating to 1932 • Infrastructure built to capitalize on economies of scale • Focus on research • Brand strength of Panasonic
  • 5. Company Weaknesses • Lack of innovation in subsidiaries • Excessive reliance on economies of scale • Outdated corporate culture • Internationalization v. globalization • Inefficient business segments (JVC)
  • 6. International Competitiveness within the Consumer Electronics Industry (70’s - 90’s) Global Integration Matsushita Sony Philips Local Responsiveness Product Innovation
  • 7. Industry Opportunities • New Markets: – BRIC • Developing Technologies Offshore (i.e. China) – Shift more R&D offshore – Clusters; Incubators; technology parks • Jump on the Consumer Revolution Bandwagon – Internet •Marketing •Direct sales
  • 8. Industry Threats •Cost-volatility of raw materials & suppliers •New Competition: Korea & China (CE global glut) •Pressure from host governments •National, Regional, and Global Economies Examples of Volatility – 1992 recession: Japan’s CE market halved in a decade (89-99) – 1997 Asian Financial Crisis – Exchange rates: strong yen – exports become less valuable
  • 9. Updated Sales & Profitability Performance: 1970- 2006 Net Sales Before Income Taxes Net Income 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 (1,000) 05 06 70 75 80 00 02 03 04 85 90 95 20 19 19 19 19 20 20 20 20 19 19 20
  • 10. Net Income as a Percentage of Sales 8.00% 6.00% 4.00% 2.00% 0.00% - 2.00% - 4.00% - 6.00% - 8.00% 70 75 80 85 90 95 00 02 03 04 06 05 19 19 19 19 19 19 20 20 20 20 20 20
  • 11. Business Units as Percentage of 2006 Sales JVC 7% Other 13% AVC Networks MEW & 38% Panahome 17% Home Components & Devices Appliances 13% 12%
  • 12. Possible Solutions Contract w/ Wal-Mart Supply Chain Solution + Global sales increase +Vertical integration + Leverage economies of + Negotiate materials scale advantage costs - Thin margins - Fewer Suppliers - Loss of brand equity Risky - Reduced flexibility
  • 13. International Competitiveness within the Consumer Electronics Industry (today) Global Integration Matsushita Local Responsiveness Product Innovation
  • 14. Recommendations 1. Corporate Culture 2. World-Class Product Technology • Localized R&D • New, strategic products 3. World-class Brand Identity • National brand in China & Middle East; Japan • Localized advertising 4. Global Markets (focus: China) • Phase out National • R&D in China • Barriers to entry
  • 15. Panasonic Ad Campaign “Panasonic ideas for life.” • National ad (1954) • New Products • Targeting a New segment (US) • Animals (UK)