Philips vs. Matsushita: The Competitive Battle Continues
1. Philips and Matsushita are two very large consumer electronic companies. Philips success over the years can be largely contributed to the company’s adaptive and innovative product marketing and its expansive portfolio based on the responsive needs of national organizations. However, Phillips, has faced extreme volatility over the past 50 years due to a lack of innovation, low employee morale, loss of focus of core competencies, and a global recession.

On the other hand, Matsushita success can be largely contributed to the company’s efficient and low cost production, synergy, and competitive divisions that encourage innovation. However, Matsushita also experienced volatility due to a lack of innovation, a global recession, and the addition of a major supply glut and price collapse. 2. The concepts from the assigned chapter can help us understand how Philips and Matsushita might develop a strategy that will focus on long term success. The concepts from the chapter discuss terms such as “administrative heritage” or the idea that a company’s existing configuration cannot be changed overnight. And one of the most important lessons for management is to build and leverage their company’s existing capabilities rather than emulating another company’s strategic capabilities in order to be more responsive in a constantly changing world.

3. My strategic recommendation for Philips is to maintain its strong international presence yet remain centralized; create joint ventures before entering new territories to gain market acceptance; develop new labs to innovate new products; and focus on one major product line rather than over-diversifying and later divesting. Essentially, Philips should return back to the simplicity of what originally made the company successful. Matsushita should consider to increase