Matsushita Electric Industrial Essay

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Matsushita  is a leading global provider of electronic products.  The firm offers a diverse product  lineup ranging from video equipment, information  communications equipment,  home appliances, components, and devices. In fiscal 2007, Matsushita  had sales of over  $77.9  billion—second  among  Japanese  firms after  Hitachi,  and  fourth  worldwide.  Matsushita  is often viewed as Sony’s rival, although  the former  is much stronger  in entertainment and the latter more so in white goods. Based in Osaka, Japan, Matsushita has a truly international presence, with over 328,000 employees working in more than 45 countries worldwide. The company was renamed Panasonic Corp. in October 2008.

Established in 1918 as Matsushita  Electric Housewares Manufacturing Works, Matsushita was formed by entrepreneur Konosuke Matsushita  to launch his electric attachment plug. Under his leadership, Matsushita grew quickly during the interwar years, from 25 workers in 1918 to 6,672 workers in 1939. The firm offered a range of products, such as the electric iron, radio,  and  dry-cell  battery.  Matsushita  offered 200 products  by 1931, and more than 2,000 products  by 1937. During World War II, Matsushita  shifted away from the production of electric goods into the production of military goods.

During the Allied occupation of Japan, Matsushita’s business was severely restricted  because of the firm’s participation  in the war effort. Matsushita,  however, gained permission  to rebuild its business as an electrics  firm. As Japan regained  its independence as a sovereign nation  in 1952, Matsushita  moved quickly to strengthen its scientific and technological capacity through  imports  of foreign technology. The company formed  foreign alliances with the  Dutch  electronics company  Philips in 1952, established  various manufacturing plants, and built a central research facility in 1953. By the end of the decade, Matsushita had established a strong market position in consumer electronics, particularly in white goods, and was prepared  to expand abroad. Indeed, the firm established Matsushita Electric Corporation of America in 1959, National Thai in 1962, and a European sales office in 1963.

After listing on the Tokyo Stock Exchange in 1971, Matsushita  gained much  publicity in the 1970s and 1980s when  it entered  a videotape  formatting  war. Matsushita  was the parent  company  of JVC, whose VHS format eventually won over Sony’s Betamax format. The firm’s success was attributed to its greater flexibility in collaborating  with other  firms, and responsiveness to consumers who tended to value longer running times and portability over technological sophistication.

Matsushita  also gained some notoriety for its second-mover   strategy.  The  company’s  sales  strategy was to identify new products  that proved successful among  rival firms and  to  launch  similar  products. What  it saved in product  development,  Matsushita invested in an extensive network of affiliated wholesalers dedicated to capturing greater market shares.

In the 1990s, Matsushita  ventured  briefly into the entertainment industry.  But while it acquired  MCA in 1990, it sold 80 percent of its stake to the Canadian alcoholic beverages firm Seagram’s three  years later. Matsushita also began to offer cell phones and digital television sets in step with the information  technology boom. With rapidly changing market conditions, Matsushita  also underwent  a series of organizational restructurings  that  would  streamline  management and eliminate the duplication of businesses.

Matsushita  is widely known for its founder, Konosuke Matsushita, who achieved renown as one of Japan’s leading entrepreneurs. He was credited  for creating Japan’s first  decentralized  company  in  1933. Under Matsushita’s guidance, the firm was long managed as a group of subsidiaries organized along product  lines. These subsidiaries competed against each other to produce superior products within the Matsushita Group.

Matsushita currently offers a diverse range of products  through  several business segments, including home appliances, components and devices, Matsushita  Electric  Works  and  Panahome,  AVC Networks, Victor Company of Japan. Matsushita  derives around half of its revenues from Japan. With a 60 percent share of the domestic  market,  it has particular strength in household appliances.

Matsushita faces several challenges amid globalization and increasing competition. One is a threat from foreign  rivals such  as Royal Philips  and  Samsung, who have larger global market share, larger research and development  (R&D) facilities, and more expansive distribution  networks. In addition, the firm faces competition  from companies in developing countries who can offer low-priced alternatives. As well, Matsushita faces increasing cost pressures from rising raw material prices. Matsushita’s future lies in its ability to capitalize on its brand image, form strategic alliances to pursue collaborative R&D, and expand its market reach, as well as invest in growing markets  such as LCDs and semiconductors.


  1. Mitsuru Kodama, “Innovation Through Boundary Management: A Case Study in Reforms at Matsushita Electric,”  Technovation  (v.27/1–2,  2007);
  2. Matsushita Electric Industrial  Matushita Denki 50 nenshi [A 50-year History of the Matsushita  Group] (Matsushita Electric Industrial Co., 1968);
  3. McInerney, Panasonic: The Largest Corporate Restructuring in History (St. Martin’s Press, 2007);
  4. Shimotani, Matsushita Gurupu  no Rekishi to Kōzō [The History and Structure  of the Matsushita Group] (Yuikaku, 1998);
  5. Yamashita, The Panasonic Way (Kodansha International, 1987).

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