Division managers whose operating profits fell below

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Division managers whose operating profits fell below 4% sales for 2 successive years were replaced Basic technology was developed in a central research laboratory (CRL); product development and engineering occurred in each of the product division Matsushita was usually very fast to market – earning it the nickname “Manishita” or copycat Matsushita: Internationalization - 1951, KM could not find any American company willing to collaborate with Matsushita - Best he could do was a technology exchange and licensing agreement with Philips Expanding Through Color TV - 1950s/1960s: Matsushita built healthy export business with black & white TV sets - 1953: opened its first overseas branch office, “Matsushita Electric Corp. of America” (MECA) - As manufacturing costs increased in Japan, company shifted to more basic production in low- wage countries; while high-value components remained in Japanese plants - Established assembly operations in U.S. and Canada; supplying European market Building Global Leadership Through VCRs - 1980s: VCR propelled Matsushita into first place in consumer electronics industry - Battle over VCR format developed:
Sony introduced “Betamax” format, and JVC launched a competing “VHS” format, and Matsushita agreed to give up its own format and adopt VHS to establish an industry standard - Matsushita increased VCR capacity 33-fold to 6.8 million units - Other companies outsourced to Matsushita instead of self-manufacturing - Company licensed the VHS format to other manufacturers - Mid 1980s: VCRs accounted for 30% of Matsushita’s sales and 45% of its profits Changing Systems and Controls - Mid 1980s: Matsushita’s growing number of overseas companies reported to the parent in either 2 ways: 1- Wholly owned, single-product global plants reported directly to the appropriate product division 2- Overseas sales and marketing subsidiaries and overseas companies producing a broad product line for local markets reported to Matsushita Electric Trading Company (METC) – separate legal entity - Throughout 1970s: product divisions maintained strong operating control over their offshore operations - Divisions had plant and equipment designed by the parent company, followed manufacturing procedures dictated by the center, and used materials from Matsushita’s domestic plants - 1980s: increased local sourcing gradually weakened the division’s direct control - Instead of controlling inputs, began to monitor output (quality and productivity levels) Headquarters-Subsidiary Relations - 1980s: Matsushita had over 700 expatriate Japanese managers and technicians located throughout foreign subsidiaries for 4-8 years – to play a vital communication role - Main role of subsidiary general managers was to translate Matsushita philosophy abroad - Expatriate accounting managers expected to “expose the truths” to corp. HQ - Japanese technical managers sent to transfer product and process technologies and provide HQ with local market information -

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