1. After we read the case carefully, the main strengths of Phillips were many as its weaknesses. Their organizational structure in the beginning was rather centralized but as they expanded geographically it transformed to a more flatter organization, like for instance the National Organizations which had absolute powers, and were very independent which created some friction between the mother company and them.
First and foremost, looking back at their history we can certainly conclude that Phillips really cared about its employees and that’s why we think they had innovative ideas and products. Their main rules were to expand but at the same time also using new and updated technologies in order to be cost efficient. They saw expanding as a way of increasomg their profits and revenues and that’s why they took a geographic expansion in markets such as Brazil, United States, Europe, Canada, France and so on. In addition, they also created joint ventures in order to gain market acceptance faster. To add boost to their R&D department Phillips also came in agreement with General Electrics and Matsushita to share their patents. Another strength would be their “National Organizations” (NO) which in the end became powerful independent entities which also became a weakness for Phillips and we will further explain that when we are coming to weaknesses. The National Organizations main functions were to respond to the different demands depending on where they were located which gave rise to new technologies such as the Color TV, or Television sets with teletext. Another strength is considered to be the many different attempts of reorganization by the company. For instance, the trade barriers increased when the idea of a common market was raised in Europe which made Phillips organize again for the better. When Van Reimsdijk wanted to balance the power between the PDS and NOS, or rather dissolve the matrix build. Also, they closed the least efficient facilities. Later on, Dekker, focused more on their core businesses rather than closing down further facilities. Van der Klugt took over and further investigated this core business idea and continued with that proposition. He still had to close 75 of the company’s 420 remaining plants worldwide. Now, in short, the CEOs such as Timmer, Boonstra, and Kleisterlee, all came from different backgrounds and applied different ideas which worked on short term basis, not long-term and that’s what really hurt them in the end. The main weaknesses found are the NOS and POS, as explained above, in some instances they became too powerful and could basically take autonomous decisions by themselves. Also the idea of matrix managers which was inefficient in the way that it could be repetitive decision making which in the end resulted in a time consuming process. Also, they opened too many plants worldwide sometimes neglecting the outcome of the political and economical risks. They had too many production facilities in expensive wage countries meanwhile the opportunity existed of expanding their facilities in low wage countries such as Asia.

2. Matsushita’s organizational structure was from the beginning very subjective with the company’s values and morale sung every day, the seven spirits of Matsushita. They implemented a divisional structure, each division had clarified goals and objectives which would further motivate them to compete against each other which in the end would boost up the revenues and profits of Matsushita. The corporate treasury worked as a bank for the different operating division. They heard their idea, was it sufficient they would loan them some funds which they would later on pay back, each division per se. The founder expected each division to work uniformly and if profits fell below 4 percent two years in a row that manager would be replaced. Now, their main strengths were that they had a close relationship with their workers, providing them (from the beginning) life time employment which is fairly common in Japan, and not only that but also that new employees were trained for 7 months and every morning before starting to work, everyone would sing the company’s values and ethical consideration. Also, when manufacturing costs rose in Japan they moved their production to low-wage countries which benefited them well. In addition, they were open for changing their internal systems and controls in order to be more efficient. Their foreign operations used plants and equipments mainly from the centralized mother company. Another important aspect is that MECA had free hands to achieve their set goals and targets by the mother company which worked for their way if they used it correctly. Another factor was their number of expatriates which were located throughout their foreign facilities. The managers had close relationship when it came to sharing information and regular visits to the foreign facilities. In addition, a successful approach was when they gave overseas sales more choice over the products they sold which would help them even more to answer to the localized demand depending on their location. Their main weaknesses are that it was too tight of control and almost too late to start adapting to their competitors as they already had a foot in the market. In addition, the 250-year plan which was subjectively planned by Matsushita and they were unable to find any American company willing to collaborate with Matsushita unless they did a licensing agreement, they couldn’t enter a distribution network or traditional retailers so that ended up as they had to turn themselves to mass merchandisers and selling it cheaper than expected, at discounters. Also when they wanted to expand globally by acquiring businesses which would further help them with R&D and the innovative process, this gave a bad image for the public sector as almost they had given up on that sector. For instance, when they acquired Motorola’s TV business or their innovative group consisting of American engineers. Also, the CEO Yamashita expressing his disappointed views publicly which rarely happens otherwise. That further worried stakeholders and investors.

3. We do not agree with the actions of Jan Timmer during “Operation Centurion.” With his ruthless cutbacks and layoffs, he almost single handedly destroyed the company. While we understand his idea in the end, his methods of getting there could have been played out a bit better. During his downsizing he eliminated parts of the company and basically put all of his eggs into one basket, which is never a good idea no matter how you look at it. While doing this he started layoffs and destroyed the moral of the employees still there, and unhappy employees are never very efficient employees. Once he had completed this he not only cost the company millions of dollars, he also had people fighting him all the way. Now Timmer had his ideas for the future and wanted the rest of the company to follow in his footsteps, while they may have been good ideas at the time they company was too understaffed and behind the times to compete with the other masses.

4.We do agree with the actions of Yamashita under his “operation localization.” His idea was to get the companies thinking for their selves and to do that they needed to be a bit more self-sufficient. However his biggest “pushback” came form within the company itself. Even though the subsidiaries had been given more and more power to make decisions themselves and to even be able to order parts from outside companies, the companies were still severely dependent on the parent company for answers to their problems. One of the biggest problems the company had to overcome was the feeling of control form central. This was proven by the product division managers still having ordering control over the subsidiaries.

5. For the Philips company, we suggest that they have to pay more attention on after services rather than cutting costs. Despite the high total cost, it will make the profit to go down. However, cutting the cost too much will lead to series of problem on productions and sales. We couldn’t ignore new worldwide market demands for more segmented products and higher consumer service. For example , in the Chinese market, Philips have been lodged a complaint by lots of consumer which buy Philips’ earphone. The consumer feel the service attendants have a bad manner and they are too impatient after they receive customer’s phone call for appeal. This kind of activity will hurt Phillips’s reputation in the long run. We believe that the company’s reputation is even important than the quality of their products in a certain extent. Lost reputation means that you’re losing your market share.
Morishita’s challenge was that the productive capacity had exceeded the demand and of the change of the company structure. Considering this situation, Morishita had already cut headquarters staff. In addition, they still have to solve the problem of overcapacity. We think that the better more deeper market segmentation they have and increase spending on R&D development will be helpful to solve their problem now and in the long run.
First, deep market segmentation is conducive to excavate more potential customers. R&D development is beneficial to the quality of products and to decrease the cost of goods. Both of them are helpful to improve the competitiveness of their products. So, it will lead to a bigger market share for covering the overcapacity.