In their initial stages of internationalization, Matsushita involved other local companies to merchandise their products. The company had not established international distribution centers and hence had to collaborate with local distributors from prospective nations. After some time, their products were gaining popularity, which prompted them to obtain distribution licenses. It was also necessary for them to employ local traders to facilitate the distribution as they had little understanding of the local market.
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Philips on the other hand established its international brands by having similar names for other branches. The company established British Philips and American Philips. The company only had to establish its brand names and adopt a similar production strategy. The two companies differed in strategies mainly because of their international acceptability and their market share.
From the analysis, it is clear that by the time Philips was launching its products internationally, its market had already accepted the products. Matsushita on the other hand had to employ a lot of marketing strategy internationally to attain recognition.
Strategies Implemented by Matsushita and Philips
The current strategies employed by Matsushita and Philips are to cope with tight competition from other companies. For instance, for the past two decades Philips has faced a lot of competition especially in the international market. This has led to losses especially on their products, which led to the loss of consumer taste thereby leading to the disbandment of the products. The operating cost of their international branches became more than the profits they obtained.
This is mainly because of local brands that are preferred due to their lower costs. The company is hence obliged to produce exceptionally high quality goods and close some of its distribution centers to minimize on the running cost. Matsushita on the other hand decided to employ Japanese managers with the hope of bringing in new ideas. Being an electronic company, Matsushita recognized the technological goodwill that Japan had internationally and realized how such expertise will market them.
The Japanese manage most of the companies’ international branches. These strategies have worked well for the companies and enabled them retain a share in the market. The companies however have to venture into continuous marketing research to ensure they are at par with current trends (Chandler 2005).
The greatest challenges for implementing this strategic shift faced by managers at Matsushita and Philips
The greatest challenge facing Matsushita and Philips is competition from local companies. With improvements in technology and the need for electronic products both locally and internationally, local companies have come up with a cheaper version of the products (Rodiek 2007). Despite the fact that they are not of high quality, they are preferred because of their cheap price. Another major challenge faced by the companies is the introduction of counterfeits.
Some local companies are coming up with fake products with the brand name of Matsushita and Philips and selling them to unsuspecting customers. They sell them at a cheaper price than the originals and hence attracting more customers. The illiteracy among the company’s customers has jeopardized the efforts by the companies to educate the public on their original products.
Most of them do not know how to differentiate between the original and counterfeit products (Great Britain. Dept. of Trade and Industry 1979). The companies will have to keep investing in extensive marketing as well as advertisements. Dynamism is also necessary in ensuring that what they are producing is according to the current tastes of customers.
Chandler, A. (2005). Inventing the electronic century: the epic story of the consumer electronics and computer industries: with a new preface. London: Harvard University Press.
Great Britain. Dept. of Trade and Industry. Trade and industry, Volume 36. (1979). Michigan: H. M. Stationery Off.
Rodiek, C. (2007). Assessment of the Internal Environment of Matsushita Electric Industrial Co., Ltd. New York: Publisher GRIN Verlag.