Matsushita Electronic Industrial Essay -- essays research papers

Matsushita Electronic IndustrialPham ThachExecutive summary Matsushita Electronic Industrial (MEI) is a very sure-fire guild in both Japan and the global in the 1970s and eighties. MEIs success in this period came from its diversification of productions, dominance interior(prenominal) market, unique corporate culture, and divisional structure in both domestic and internationalistic market. However, in 1987, under sore circumstances, such as the change suffer prices, and the pressure of integration of information technologies that need international transfers, sharing, and synergies, MEIs faced declines in sales and profits because its structure was exposed some weakness. To thrash these problems, MEI should choose Worldwide Product Division Structure.Matsushita Electronic Industrial (MEI) was established in 1918 by Konosuke Matsushita to produce a double-end socket in Japan. This company grew rapidly, in 1977 MEI was praised by circumstances as the most dazzling corporate suc cess in Japan, and then ranked 20 on Fortune list of the terra firmas largest by 1985. In the eighties, MEI became the worlds largest producer of customer electronics product, and the forth largest electrical and electronics firm in the world with the compounded annual sales growth and annual growth in net profits was 11.6 percent and 14.6 percent, correspondingly. The success of MEI in the 1970s and 1980s is contributed by its global strategy in which, its diversification of productions, dominance domestic market, unique corporate culture, and divisional structure in both domestic and international market. Contributing to MEIs rapid growth and consistent profitability in the highly competitive world consumer electronics industry in the 1970s and 1980s was its diversification of productions. Originally, MEI only produced double-end sockets, then its list of products was unceasingly expanded. MEI introduced various of products to markets battery-powered bicycle lamp and an electroni c iron (1923), radio (1931), Domestic fans and perch bulbs, small motors for domestic appliances, then appliances (1935), black and white TV sets (1952), transistor radios (1957), stereos, tape recorders, air conditioners (1958), driers, and disposal unit (1959), color TVs, dishwashers, electric oven (1960). In end point of the numbers of its products, MEI outdistanced its competitors. MEI grew rapidly and gained consistent profitabil... ...mashita initiated Operation Location and Action 86 programs to shift more activities to its vast oversea operation, and shift its origin emphasis. However, some subsidiary managers worried that this program could weaken their relationship with headquarters managers and reduce their access to central resources and expertise. Some managers were afraid that by deemphasizing traditional products, the company might lose its competitiveness in its existing market, and its capabilities in responding quickly and flexibly to market changes, change Mat sushitas culture and philosophy, undermined its source of strength. However, under new circumstance, the traditional structure were exposed these flaws mentioned above, and its impact was the decline of MEI sales and profits. To be a firm that was reasonably diversified and, accordingly, originally had domestic structures base on product divisions, MEI could apply Worldwide Product Division Structure. By that, MEI could easier to pursue the consolidation of value creation activities at spot locations necessary for realizing location and experience curve economies, and to transfer of core competencies within a divisions worldwide operation.