Panasonic Corporation is adopting Blue Ocean Strategy wherein the company is shifting its total focus to Business to Business customers and the company is forced to take such drastic strategic move as it is facing tough completion form Korean players like Samsung, LG who are dominating the consumer durables industry.

1. Analysis & Outlook
Blue Ocean Strategy @ Panasonic – Business To Business focus
Panasonic Corporation is adopting Blue Ocean Strategy wherein the company is shifting its total
focus to Business to Business customers and the company is forced to take such drastic strategic
move as it is facing tough completion form Korean players like Samsung, LG who are
dominating the consumer durables industry. Not only Panasonic other Japanese players like
Sony, Toshiba are all facing tough competition.Panasonic has been predominantly a B2B
company where in B2B segment contributes 70% of revenues and 30% of its revenues
contributed from consumer products. In the USA, 80% of sales come from B2B, while in Europe
40% of sales come from B2B and in India 15% sales come from B2B and 85% come from
consumer sales selling kitchen appliances, air conditioners, hair dryers, dry cell batteries,
switches (through its acquired subsidiary, Anchor Electricals) and televisions. Kazuhiro Tsuga
came to India earlier in 2010 as head of Panasonic Automotive Systems, a B2B division that
makes electronic parts for automobiles. Tsuga met Maruti and Tata Motors, though the initial
contact is yet to bear fruit. "This business takes a long time to get going. In the coming years, we
hope to have more B2B business in India," he says.
In future, Panasonic Corporation President, Kazuhiro Tsugaplans to move company away from
traditional in-house manufacturing towards partnering with industries that range from
automobiles and aviation to logistics, retail, housing and healthcare. The products will still be
electronic for example the video screens that is now designed for fitting on airplane seats but
they will be developed for and sold to original equipment manufacturers. "Future growth will in
B2B. Our objective is now to provide a better life to consumers through their cars, their
businesses, their home construction," says Tsuga. This is a classic Blue Ocean Strategy, where
the company moves out of hyper-competitive waters to uncontested markets. But as Tsuga San
says, "The Koreans are competitive in home electronic products like televisions, but not so in
other areas like B2B products. In B2B also we have competition, but the business is different. It
is more customized, rather than standardized."
Panasonic is not doing well financially and its stock has eroded by 80% over the last four years
which also touched a ten year low in November 2012, but recovered courtesy of Tsuga’s well
laid out midterm management plan, which has the stated objective of raising operating profit
from ¥ 140 billion in the current year to ¥250 billion next year and ¥350 billion in 2014. How
does he expect to achieve that? "By eliminating unprofitable businesses like televisions, semiconductors and mobile phones," he says. Panasonic Blue Ocean Strategy focus is on creating
uncontested B2B electronics market space where it is trying to bring standardized products to
market which can easily aligned and installed with other products and create value both for
customers and clients.Blue Ocean Strategy is being adopted to keep the iconic brand alive and
survive in the market. The company is accredited with innovating products in the past and
through innovation only the company can revive its fortunes and survive in the long term. This
also proves the fact that often companies facing crises will look at Blue Ocean Strategy for
survival, which is also high risk strategy.
Rajesh Prabhakar
Analyst Bio @ http://analysiscasestudy.blogspot.com/

2. Analysis & Outlook
One such product it launched recently is "Front Info Display CY-DF100D" head-up display, can
be linked to Panasonic's "Strada CN-R500" and "CN-R300" series of car navigation systems.
The system provides drivers with information such as information about where to turn right/left
during route guidance, information about a bifurcation at an interchange, etc just by slightly
turning the eyes, improving driving safety. The CY-DF100D continues route guidance even
when a passenger is operating the system for playing music, the radio, etc and the screen is not
displaying a map. Moreover, the brightness of the HUD can be automatically adjusted with an
illuminance sensor. The CY-DF100D consists of (1) the "Projection Unit," which projects an
image, (2) "Combiner Unit," which reflects an image, and (3) "Multi Expand Unit," which is
used for connection with a car navigation system. The Projection Unit and Combiner Unit are
installed on the dashboard on the driver's side. As of Aug 29, 2013, the CY-DF100D can be
installed in Toyota Motor Corp's "Alphard," "Vellfire," "Prius α," "Isis," "Porte," "Sienta,"
"Spade," Nissan Motor Co Ltd's "Moco," Honda Motor Co Ltd's "Fit hybrid" and Daihatsu
Motor Co Ltd's "Move Conte."
Rajesh Prabhakar
Analyst Bio @ http://analysiscasestudy.blogspot.com/