The review is about the article What Panasonic Learned in China written by Wakayama Toshiro, Shintaku Junjiro and Amano Tomofumi. Harvard Business Review. Dec2012, Vol. 90 Issue 12, p109-113. The article focuses on how Panasonic in China learned to bridge two strategies that are often mutually exclusive: localization and integration.
The founder of Panasonic was asked by the Chinese leader Deng Xiaoping to help modernizing China’s industries. Panasonic began licensing technologies to China which led to more than 40 China-based manufacturing operations. Panasonic’s first main purpose was to take advantage of low manufacturing costs and exporting the output.
In Japan, ...view middle of the document...
Integration asks for cooperation and uniformity. In order to ascertain global adherence to certain design elements of Panasonic’s new products, the business units in Japan retain the final decisions. On the other hand, China subsidiaries have almost complete authority to make decisions on introductions for new products in the local market. They are focusing on meeting local consumers particular needs.
This article shows us how Panasonic strategically handled the outpacing competitors in China by bridging localization and integration. By combining these two strategies Panasonic began to think globally and act local. By establishing a Lifestyle Research Center in China, they embraced the tension between cross-border integration and local adaptation. In order to develop overseas business, Panasonic held firmly to the idea of ‘contributing to the development of the country’ by acting as a public entity and becoming a company welcomed by the country. What we have experienced in real life situations is that we have to give the consumers a good feeling. Like what you do when you are having a sales talk, you want your clients to have a good feeling about you and you have to provide them complete information so they can trust you. Panasonic handled that way which was their source to success.
The authors probably wanted us to inform that Panasonic’s approach in engaging markets is a strong advantage in their business field. Competitiveness will be determined not just by the localization of sales and production but also by the localization of R&D, product planning, design and even management.
The approach of Panasonic in China was well explained by the authors. They mentioned the advantages about developing a deep understanding to the lifestyle of consumers. The examples of how they engaged with the consumers are making the argumentations strong. The weakness of this article is that the authors only focused on the advantages of Panasonic’s strategy. They haven’t compared it to other companies. Adding or comparing the company to other firms would have explained more about bridging those two strategies.
Before Panasonic start expanding market in China, it integrates the original strategies as a response to differences between national and foreign environments, and to satisfy new stakeholder demands in these foreign environments. International transfer is difficult including the cultural differences and customer habit between home and host countries. So these differences require adaptation and a recombination capability. In order to solve these problems, Panasonic established the Beijing-based Corporation of China to provide its manufacturing subsidiaries and Shanghai-based China Lifestyle Research Center to develop a deep understanding of consumer lifestyles in a market outside Japan. For example, after in-depth understanding of the Chinese situation, they noticed that Chinese kitchens are typically small, so the lifestyle center developed slimmer...