Revival of Matsushita

 
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Case Details:

Case Code : BSTR101
Case Length : 11 Pages
Period : 2000 - 2004
Organization : Matshushita Electronics
Pub Date : 2004
Teaching Note : Available
Countries : Japan
Industry : Consumer Electronics

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Background Note

In 1918, at the age of 23, Konosuke Matsushita (Konosuke) started 'Matsushita Electric Devices Manufacturing Works' with the aim of manufacturing electrical components that he had designed. The company was started in Osaka, Japan, in a rented two-storey apartment with a starting capital of less than 100.6

The innovative products, improved attachment plug7 and double cluster socket,8 soon became popular because of their high quality and low prices. By 1927, the company became popular with its reliable and low-priced products such as the 'bullet-shaped battery powered bicycle light', 'super electric iron' and '3-tube radio.'

All these products were marketed under the brand name 'National'. Konosuke soon realized the potential of export business and in 1932, started an Export Trading Department. The same year he gave a mission statement to the company, which was followed for many years (Refer Exhibit I for Mission Statement). By 1933, the company was producing more than 200 products.

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The company was divided into three corporate divisions9 : Radio; Lamps and dry Batteries; and Wiring devices, synthetic resins and electro thermal products. In 1935, Matsushita Electric Trading Company was established to devote more attention to the overseas business.

In the same year, the Matsushita Electric Industrial Company (Matsushita) was incorporated and Konosuke became president of the company. In 1938, Matsushita established an Import Department to import the raw materials needed for electrical goods production. During the same time, it decided to venture outside Japan.

In 1939, it started its first overseas factory at Shanghai, China, to produce dry batteries for communication equipment. In the same year, World War II began. Matsushita manufactured products like wireless equipment and vacuum tubes for communication. These products were popular because of their utility. Matsushita also manufactured military vessels and aircraft during the war...

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6] 1USD = 118.23 as on 20th August 2003

7] The plug was made from a resin, and the design was quite new and unique in those days.

8] That time the Japanese houses used to have only one electric outlet. The double cluster socket enabled people to use two electric appliances simultaneously.

9] The Corporate division functions independently and has its own manufacturing facilities, administration, etc.

 

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