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"Matsushita Philips Case"
Matsushita Philips Case
Kelly G Hess
Philips and Matsushita, two major consumer electronics companies, each differed in their overall strategies on how to achieve global competitiveness, yet each has experienced major changes and restructurings over the years that have essentially affected their abilities to remain competitive in this industry. In the end, both companies have diverged from the original organizational structures that their founders had based their companies' local existence on, yet some key strategies have remained consistent over the years no matter who was leading the organization. Despite some strategic failures, each new CEO of the two organizations has contributed their unique views to the organization and has pursued actions that they feel were necessary in order for the company to compete globally.

Philips, originally founded in the Netherlands, has had key strategies that have guided it since its beginning. First, Gerard Philips, its founder, focused on producing only light bulbs, which at the time was his core business, despite other electronics producers' race to diversify. This is consistent with Van der Klugt's strategy of defining a core business for Philips during his time as CEO, where he decided to sell off their non-core business of domestic appliances to Whirlpool and their medical systems business to GE. Boonstra, like Van der Klugt, named consumer electronics as Philips' future core competency. All of these strategies that focus on Philips' core competencies have resulted in overall performance improvements by all that have adopted it. On the other hand, CEOs Timmer and Kleisterlee have developed their own diversification strategies for Philips. Timmer had expanded the electronics business to include software, services and multimedia, while Kleisterlee wanted Philips to be a technology developer/global marketer. Both strategies ultimately diverged from Philip's core businesses and tried to define its businesses too broadly, which resulted in miserable failure.

Another strategy that was prevalent during...

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