Case Study #2

The main differences between Matsushita and Sony’s products are that, Matsushita product line is more involved in the household appliances market as it is the world leader in this category, while Sony strives to be the globe’s technological leader and has a product line that is driven by advanced consumer electronics. “While companies such as Matsushita concentrates on being customer intimate, Sony has differentiated itself by focusing on product leadership.” Matsushita is the largest home appliances and household equipment (HAHE) producer in the world. Some of Matsushita’s products include: microwave ovens, refrigerators, irons, fax machines, air compressors, automatic washers and dryers, vacuum cleaners, air
In return, Matsushita provides its latest patents for DVDs, digital TVs and air-conditioners to TCL.”

Sony, however, believed that reducing cycle time was much more important than lowering manufacturing costs. For the high value-added products that it specializes in, Sony felt that minimizing the cycle time made the supply chain more flexible and its ability to react to changes in demand would be quicker. This lowered Sony’s vulnerability to demand uncertainty. The rapidly changing market reaction to digital cameras and camcorders increased Sony’s risk from shortages and excess supplies, but with minimized cycle times, Sony is able to adjust and create new products much faster than before.

“The fundamental reason for Matsushita’s loss is high price.” Matsushita’s supply chain in Japan with assembly lines in China proved to be very inefficient and their costs were much too high to compete with other companies. Matsushita thought this strategy would deliver the high-quality product they were hoping for but did not foresee the undesirable high cost that came with it. Matsushita felt that it could enhance its competitive advantage in the world by bringing the low costs of Chinese labor together with the advanced Japanese techniques/parts.

Ironically, Sony had been doing the inverse, producing their lines in China while Japan offered the better stage for them to do so based on the nature of their products of that time. “When