Revival of Matsushita
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Case Code: BSTR101 Case Length: 11 Pages Period: 2000 - 2004 Pub Date: 2004 Teaching Note: Available |
Price: Rs.300 Organization: Matshushita Electronics Industry: Consumer Electronics Countries : Japan Themes: Corporate Restructuring |
Abstract Case Intro 1 Case Intro 2 Excerpts
"Consumers are flocking to stores to get their hands on DVD recorders, and when they buy they are buying Panasonic."
- Reid Sullivan, Vice President of Panasonic's Entertainment Group, 2002.
"We are proud of what we've done. But we're not about to become complacent"
- Yukio Shohtoku, Executive Vice-President of Matsushita Electric Industrial Co, 2003.
Matsushita Reborn
In the early 2000s, the stores in Japan displayed a wide variety of consumer electronics gadgets like palm-size camcorders, DVD recorders, plasma TV, etc. These product offerings from Matsushita's Panasonic brand attracted more attention and recorded higher sales as compared to the competitors Sony Corporation and Toshiba Corporation's products. The print and electronic media ran commercials on the theme, "Panasonic: Ideas for Life". And analysts commented that the brand Panasonic had been reborn. Matsushita manufactured various consumer electronics goods ranging from kitchen electrical appliances, factory automation devices to modern electronic gadgets. In the 1990s, consumer appliances, Matsushita's bread and butter category, registered a decline in profits.
The reasons: the Japanese style of management resulted in a large and aging workforce. The close monitoring of the subsidiaries by the holding company acted as a hindrance to the growth of the subsidiary companies. Matsushita's policy of acquiring technology from the partners and mass manufacturing failed in the 21st century. The diversified group was difficult to manage. Kunio Nakamura (Nakamura) who took over as president of Matsushita in 2000 transformed the 85-year-old company into a super manufacturing company ready to face the competition in the 21st century. Under his leadership, those companies under the Masushita group that were not performing well were closed down or sold. The Companies in the same area of business were merged to avoid duplication of efforts in the group. The reforms in various areas like R&D and sales and distribution were done to reduce inefficiencies. In March 2003, Matsushita's operating profit was $574 million on net sales of $61,680 million.
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