Figure 1 : Four Basic Strategies (Hill, Wee, & Udayasankar)Like all companies that internationalize, Philips and Matsushita also faced with two conflicting pressures: pressure to reduce costs and pressure to localize. Initially when Philips decided to expand its market in 1899, it was focusing mainly on the development and production of one product, light bulb. This allowed Philip to exploit its core competency which is constant innovation and allowed it to develop new products such as the tungsten filament light bulb. Therefore, even though light bulb can be categorized as a product that caters to universal need, Philips did not encounter intense competition when it entered into foreign markets .Thus the pressure to reduce cost was relatively low. Also, while there may have been some level of pressures for localization (such as changes in watts and packaging), they were most likely low. Therefore, Philips was initially pushed towards International Strategy (Philip 1). So, even thoughPhilip initially entered its foreign markets (Japan, Australia, Canada and Brazil) through exporting, the reason for doing so was probably not due to very high cost reduction pressures.