Panasonic’s spectacular transformation


On the 100th birthday anniversary, Panasonic also put on a new shirt.

About 100 years ago, Japan saw the birth of a series of new companies, mainly in the manufacturing industry, established by businessmen to take advantage of export advantages after World War I.

On March 7, 1818, Mr. Konosuke Matsushita founded Panasonic in a rental house in Osaka, with his wife and brother-in-law. From a supplier of bulbs, Panasonic has become the home appliances empire known the world.

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Entering the second century, Panasonic is struggling to find a foothold on a new growth path. The company’s operating profit has yet to surpass fiscal 1984 record of ¥ 575 billion ($ 5.4 billion at current exchange rates). That’s when VHS video player sales were booming.

Konosuke Matsushita

UMBRELLAMr. Konosuke Matsushita, founder of Panasonic.

By 2012, when Kazuhiro Tsuga became the eighth chairman of Panasonic, the company fell into heavy losses with 772.2 billion yen net loss in the fiscal year ending in March.

Mr. Tsuga immediately launched a restructuring policy, preventing the “bloodshed” with drastic measures such as cutting down the plasma TV business. But so far, Panasonic’s expected operating profit for the fiscal year ending in March 2018 is still hovering around ¥ 350 billion, or 60%, at its 1984 peak.

Although coinciding with the Japanese economic downturn, Panasonic’s problems come from deeper causes.

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Mr. Kunio Nakamura – the 6th chairman and current executive consultant of Panasonic has seen that since 1995 when he was working for this subsidiary in the US.

At the time Microsoft released Windows 95, Mr. Nakamura was amazed by a digital revolution that would soon replace the analog TVs that were Panasonic’s flagship product.

During that time, however, Panasonic’s headquarters in western Osaka appeared very calm. Both Panasonic managers and employees remain focused on domestic competitors and continue to focus on the company’s original model – selling home appliances to consumers, ignoring the digital wave.

Panasonic profit chart for the past 38 years.

“Honestly. Our company at that time did not have the potential to compete with US information technology companies,” said Mr. Nakamura.

As the executive chairman, Mr. Nakamura has undergone a major reform. But Panasonic’s ability to react slowly to the changing economic environment, coupled with a rising yen and rising competitiveness from rivals China and South Korea has made Panasonic’s battle even more difficult. .

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But Panasonic is changing itself. Tsuga – the current president of Panasonic is trying to make a big change. At the electronics show held in January, there was not a single TV or audio-visual device in the Panasonic booth.

While Panasonic remains a famous worldwide brand of home appliances, the share of its “backyard” business in total revenue has increased. It is expected that sales of the industrial and automation equipment segment will reach 2.74 trillion yen this year, equivalent to 34% of total revenue and exceeding 2.57 trillion yen in expected revenue. for home appliances.

Consumers may think Panasonic is a TV and refrigerator manufacturer, but this perception has ceased to reflect its true nature.

Kazuhiro Tsuga

Mr. Kazuhiro Tsuga, Incumbent President of Panasonic.

In another new effort, Panasonic is experimenting with automatic payment technology for retailers in partnership with Trial – a chain of discount stores based in the southwestern city of Fukuoka. This is an ambitious attempt to create a Japanese version based on Amazon.com’s automated convenience store concept.

At least one value has been preserved by Panasonic for the past 100 years: the founder’s management philosophy believes that the manufacturer’s mission is to make goods rich and affordable to alleviate poverty. Some people believe that Panasonic’s ancestor’s business philosophy is no longer relevant as the economy grows.

But even now, Panasonic is still pursuing Matsushita’s business philosophy with a more modern version of home appliances. Instead of selling individual appliances, the company aims to sell a suite of high-end living spaces that includes its home electronics.

Mr. Sa / Nikkei Asian Review
* Source: Young intellectuals

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