Trade.Information

Company Name: Matsushita Electric Industrial Co., Ltd.

Company Type: Manufacturer of audiovisual and information/communication equipment

Company Profile

In 1918, Konosuke Matsushita, the founder of our company, rented a two-story home, establishing Matsushita Electric Devices Manufacturing Works on the first floor.
With this larger workshop, Konosuke was able to expand production to include an innovative attachment plug and a two-way socket, both of which he designed himself.

These new products proved immensely popular, earning the company a reputation for high quality at low prices. And by 1922, a new factory and office to house his growing business had to be built.

Matsushita Electric began printing English instructions for its products in 1931, and in April 1932, Konosuke set up an Export Trading Department to carry out research and market development to achieve the company's international sales potential. This represented a bold step in an industry where exports were traditionally left to large trading houses and foreign trading concerns. With a unified policy for domestic and export markets, the company was now able to actively expand its export business.

The employees assembled on May 5, 1932 as an announcement was to be made by the founder that was to guide the company for decades to come. He said, The mission of a manufacturer is to overcome poverty by producing an abundant supply of goods. Our mission as a manufacturer is to create material abundance by providing goods as plentifully and inexpensively as tap water. This is how we can banish poverty, bring happiness to people's lives, and make this world a better place.

A system of autonomous management was devised and established, dividing the company into three divisions - the first producing radios, the second handling lamps and dry batteries, and the third producing wiring devices, synthetic resins and electro-thermal products. Each corporate division had its own administration, and had charge of its own manufacturing facilities, allowing the founder to delegate more responsibility, and offering managers an opportunity to learn all aspects of their business - from product development through sales.

With exports increasing, Konosuke incorporated the Export Trading Department as the Matsushita Electric Trading Company in August of 1935. At the time, this was an unusual move for an electrical products manufacturer, but he felt that as much attention should be devoted to overseas business as to domestic business, and that the company should carry out operations consistent with Matsushita's basic business philosophy.

In December 1935, Konosuke Matsushita incorporated the company, which had been a sole proprietorship, and renamed it the Matsushita Electric Industrial Company to bring it in line with his vision that the enterprise was something entrusted by society. The divisions were reorganized as nine subsidiaries and four associated companies, with Matsushita Electric functioning as a holding company.

Konosuke, now in the role of president, explained his reasons for the change to the company employees as follows: Matsushita Electric has expanded in the scope of its business to become a large manufacturing organization with a significant place in society. I feel a strong obligation to provide for its continued growth. At the same time, in a spirit of fairness and honesty it is proper to make public our economic status, and report it to society at large.

Konosuke sent three people (Kametaro Matsumoto, Tetsujiro Nakao and Karl Scriba) to the U.S.A. and Europe in order to learn about advanced industries there. They visited about 20 local factories including Philips and Siemens.

n March 1938, Matsushita Electric Trading Company set up an Import Department to handle raw materials needed for electrical goods production at Matsushita Electric and other electrical manufacturers.

The first overseas factory prior to World War II, Matsushita Dry Battery's Shanghai factory, opened. It was established to produce dry batteries for communications.

Matsushita Electric lost 32 factories and office facilities in Japan, mainly in Tokyo and Osaka, and its 39 overseas factories and sales outlets were confiscated. Fortunately, the company's Head Office and its' main factories remained.

In 1952, after very intense negotiations, Matsushita Electric made a technical and capital cooperation agreement with Philips of the Netherlands, setting up Matsushita Electronics Corporation as a joint venture. This was the result of Konosuke Matsushita's efforts to find an overseas business partner, convinced that the adoption of advanced Western technology was essential for Japan's postwar reconstruction.

In 1954, Matsushita Electric allied with Victor Company of Japan, a record player producer, that was established in 1927 by the Victor Talking Machine Co. of the

In 1956, as the government was announcing the successful completion of the nation's economic reconstruction, the founder startled his employees and the industry by announcing an ambitious five-year expansion plan for Matsushita Electric, calling for quadrupled annual sales, a 60% boost in the number of employees, and an increase in capital assets from three billion to 10 billion yen. He said that success was guaranteed because these numbers represented the desires of the many, many people with whom the company was making invisible contract. These seemingly impossible goals were achieved in just over four years.

Left: Matsushita Electric Corporation of America building in 1959; Right: Matsushita Electric Corporation of America employees in 1961

In 1959, ready to expand business activities abroad, Konosuke founded Matsushita Electric Corporation of America in New York as its first overseas sales company. He urged his managers to adapt to their new host nation, and to apply themselves to providing products that Americans would appreciate.

In 1961, the company began to provide technical assistance to other countries and construct plants abroad with the aim of expanding its operations on a global scale. The company established the National Thai Company for battery production and provided the necessary technology. National Thai was the company's first overseas plant to be built since the end of the war.

The formation of an overseas sales network proceeded at a rapid pace. The first European sales company established was National Panasonic G.m.b.H. in West Germany in 1962, and was used as a base to enter the European market. Since then, many sales companies have been established throughout the world.

In 1964, after the Atami Conference, a meeting held to cope with the recession which had hit Japan, the head of Corporate Sales Division was temporarily replaced by the founder (then Chairman), Konosuke Matsushita, and work was begun to solve the company's problems by totally revamping the sales and distribution organizations. By February 1965, a plan was drafted for a new national sales network based on: 1) a nationwide reorganization of the sales company network; 2) the initiation of direct transactions between sales companies and manufacturing divisions, bypassing sales offices and 3) the creation of a new credit sales system.

Within Matsushita Electric, the manufacturing divisions were given more fully autonomous management, the sales arms of the company were given a greater voice in product development, the sales organization was revamped and provisions were made to give support to sales companies and retail stores. The company's future was at stake with this revolutionary plan and the founder was prepared to sacrifice profits for three years if that is what it took to get the new organization running smoothly. Many sales companies and retail stores initially opposed the reorganization. However, once they recognized the intent of the reorganization, they immediately initiated efforts to boost business under the new policies. Their commitment, combined with a general optimism in the industry as a whole, brought Matsushita Electric back to a sound footing.

n April 1965, Matsushita Electric became Japan's first major manufacturer to introduce a five-day work week. Matsushita created a stir in the media when he announced the move five years earlier in January 1960. The reasons, the founder stated, were two-fold. It would help achieve the same high productivity that foreign companies enjoyed while simultaneously improving the quality of life of Matsushita employees.

The time for the actual changeover came as the company was battling with the effects of an economic slump that began in 1964, a situation which was reflected in Konosuke Matsushita's remarks. However, the company promoted the program with the slogan One day study, one day rest, and the company gradually adjusted its operations to a five-day work week. This policy contributed to higher employee morale and productivity.

Looking to the next half-century of operations, President Masaharu Matsushita emphasized the importance of contributing to worldwide prosperity and engaging in world-class research and development. Stressing that it was an ideal time to do something for the world, Chairman Konosuke Matsushita advised management that they had to change their current way of doing business - one set of policies for maintaining the Japanese domestic market, and another for increasing exports - with a unified global perspective.

The company started to build up its international capability by expanding support operations for overseas business and developing staff capable of handling international operations. One such step, in 1971, was to register the company to trade its shares on the New York Stock Exchange. By joining the stock market, the company gained in prestige and entered the community of international enterprises.

Matsushita Electric Singapore, established in 1972, was officially opened on October 16, in 1973, with Mr. Hon Sui Sen, Singapore Minister of Finance in attendance. Also attending were about 300 people including government officials and the local press along with Mr. Nakagawa, Executive Vice President and concurrently Chairman of the Singapore affiliate. The new plant produced refrigerator compressors for export from Singapore.

On March 22, 1974, Motorola Inc. of the U.S.A. and Matsushita Electric of Japan signed a contract for the purchase of Motorola's TV operations in the U.S.A. and Canada. The purpose of the acquisition was to start a television business in the U.S.

Microelectronics Technology Corporation was established in September 1976. Research for the practical use of discrete 4-channel broadcasting was being carried out at that time, and inventors including Mr. Lou Dorrent and his colleagues were transferred from Quadracast System Inc., in which MECA (Matsushita Electric Corporation of America) also had an investment, to the first R&D center in the U.S.

Matsushita Electric had bank access to raise short-term capital in the U.S. However, to have diversification in the means of raising money and to attain cost reduction, the company decided to issue commercial paper. Panasonic Finance, Inc. was established, and in September 1985, officially obtained the highest short-term bond rating from 2 major U.S. ranking companies.

The company issued commercial paper valued at 10 million dollars in October, and it was becoming very popular. The fact that Matsushita Electric's long-term bond rating was AAA, which was also the highest, helped to make the short-term bond rating almost the same as global, first-class companies.

On May 22, 1987, Matsushita Electric and Beijing City in the People's Republic of China signed an agreement to establish a joint venture to produce picture tubes (CRTs) for color TV. This was Matsushita Electric's first investment in China in the post-war period. The new company, Beijing Matsushita Color CRT Co., Ltd., started production in June 1989 with some 1,400 employees. The company first produced 21 color picture tubes and later added 14 and 18 tubes. The products were supplied to color TV plants in China.

With overseas business accounting for a growing proportion of Matsushita Electric Industrial sales, the company began taking steps to change from a domestically oriented enterprise to an international one. In 1987, the company announced plans for a merger with Matsushita Electric Trading Co. and concluded the merger in April 1988.

MCA Inc. joined the Matsushita Group in November 1990. MCA was a multi-billion dollar diversifed international entertainment conglomerate engaged in the production and distribution of theatrical, television and home video products, operation of two amusement parks in Hollywood, California and Orlando, Florida.

MCA brought a diversity of new capabilities into the Matsushita Group, and with them, the promise of innovation in the field of electronic entertainment through the integration of hardware and software products. In June 1995, Matsushita Electric transferred an 80% share of equity interest in MCA Inc. to the Seagram Company Ltd., a Canadian liquor manufacturer.

As concerns for the Earth's environment increased throughout the world, Matsushita has taken the lead in the global move for corporate environmental responsibility. In 1991, the Matsushita Environmental Charter was drawn up, and is being implemented throughout the Matsushita Group. This charter calls for the adoption of the latest environmentally-friendly technologies and processes. Each operating unit is pursuing its business activities within the charter's environmental parameters.

In 1997, Matsushita formed four internal division companies to enable the company to keep pace with sweeping changes in technology, the increasing complexity and integration of products, and the rapid globalization of operations. The new internal division companies were the AVC Company, the Home Appliance & Housing Electronics Company, the Air-Conditioner Company and the Motor Company.

Related product divisions were grouped under a single management, allowing for greater coordination of activities and concentration of resources.

The four internal division companies are treated as autonomously managed independent group companies, formulating their own business plans and budgets.

As of the end of March 1999, 101 facilities in Japan and 120 sites overseas had attained ISO14001 certification. In addition, seven non-manufacturing facilities and offices received approval - five in Japan and two overseas. Matsushita Electric is the first manufacturer to have certified sites throughout the world, including China and Latin America.

The Value Creation 21 plan seeks to establish a new Matsushita that will place top priority on providing value-added services to customers through the development and marketing of systems, equipment and components, to further contribute to society in the 21st century.

The history of Panasonic (Matsushita Electric Industrial Co., Ltd) goes back to when Konosuke Matsushita founded Matsushita Electric Manufacturing Company in 1918. See how the company evolved and developed into one of the leading electronics companies in the world today.

Excerpt from the book entitled MATSUSHITA LEADERSHIP by Dr. John P. Kotter, Konosuke Matsushita Professor of Leadership at the Harvard Business School. 
In 1997, the book won the Global Business Book Awards sponsored by The Financial Times and Booz-Allen & Hamilton.
The excerpt gives us good insight into the character of Konosuke Matsushita. 
frail, sickly bicycle apprentice who survived unspeakable childhood tragedy, Konosuke Matsushita lacked formal education, wealth, charisma, connections and even a special talent.
Yet, early hardships produced hidden strengths which opened Konosuke Matsushita's mind to the collective wisdom of others. The author reveals how a lifelong thirst for learning fueled the passion that led this humble, shy 5-foot-5-inch humanitarian idealist to pioneer management practices and advance his philosophy that the mission of a manufacturer is to relieve poverty and create wealth, not only for shareholders, but for society.

Konosuke Matsushita was born on November 27, 1894 in a little village south of Osaka. His father was a small landowner and prominent member of the community, and Konosuke, the youngest of eight children, enjoyed a comfortable early childhood. But the family's fortunes turned when his father lost his property as a result of poor speculation on the commodities market, and the family was forced to leave their farm and move to a small house in the city.
To help support the family, Konosuke was apprenticed to a hibachi (charcoal brazier) store in Osaka a few months before he was to graduate from elementary school.
Still only nine years old, Konosuke said goodbye to his mother at the train station, and left on the long, lonely ride to the big city.

Konosuke's workday began at the crack of dawn with a careful cleaning of the store. When the shop was spotless, he polished the hibachi brazier while looking after his employer's children until it was, once again, time to fall exhausted into bed.
However, when his first payday finally arrived, the single five-sen coin he received seemed a veritable fortune, and made all the hard work worthwhile.
In less than a year, the hibachi shop went out of business, and Konosuke found a new apprenticeship at a store selling bicycles, which, at the time, were luxury items imported from the U.K. The bicycle shop also handled small metalworking jobs, and he quickly learned to use a lathe and other tools.
Treated as a member of his employer's family, Konosuke spent five happy years there.
Although Konosuke considered leaving his apprenticeship for a job that would allow him to take night classes and complete his education, his father convinced him to stay at the bicycle shop, saying, The skills you are learning will ensure your future. Succeed as an entrepreneur, and you can hire people who have an education.

Around this time, streetcars were beginning to appear on the main boulevards of Osaka, and Konosuke's instincts told him that electricity would be the wave of the future. Anxious to become a part of this new field, he applied for a job at the Osaka Electric Light Company, leaving his apprenticeship at the bicycle shop at age 15.
His next big job was the wiring of a major theater. This complicated project took over six months to complete, with Konosuke working his team around the clock to keep on schedule. Although the project was an unqualified success, long hours in the unheated theater in winter sapped his strength, and Konosuke contracted pneumonia.
In prewar Japan, arranged marriages were the norm, and, in the spring of 1915, at age 20, Konosuke's sister introduced him to her friend, Mumeno. Within a few months the two were married, and Konosuke was shouldering the responsibility of a new household.

Konosuke's career continued to advance at the Osaka Electric Light Company as he was quickly promoted to higher paying positions, until, at the age of 22, he became an inspector - the highest post a technician could hope for. 
Earlier, Konosuke had tried in vain to interest his supervisor in an improved electrical socket he had designed and built in his spare time. Now, dissatisfied by his job's lack of challenge, Konosuke's thoughts returned to the socket once again. 
Remembering his father's advice about the advantages of being an entrepreneur, he left the security of his well-paid job on June 15, 1917 to set up his own small manufacturing company.
Konosuke's savings totaled less than 100 yen, scarcely enough for basic tools and supplies - power tools were, of course, out of the question. However, undaunted by his meager resources, he set up a shop in his tiny dirt-floored tenement with two co-workers from Osaka Electric Light Company and Mumeno's youngest brother, Toshio.
Sales of the socket were poor, and by the end of 1917, Konosuke's former co-workers pulled out, leaving only Konosuke, Mumeno and Toshio. 
Mumeno's pawnshop register tells the story of months of hand-to-mouth survival.
On the brink of bankruptcy, the company was saved by an unexpected order for a thousand insulator plates for electric fans.

Now that business was picking up and Konosuke had money to invest, he rented a two-story home, launching Matsushita Electric Devices Manufacturing Works on the first floor. 
With this larger workshop, Konosuke was able to expand his production to include an innovative attachment plug and a two-way socket, both of which he designed himself.
These new products proved immensely popular, earning the company a reputation for high quality at low prices. And by 1922, Konosuke had to build a new factory and office to house his growing business.

In 1923, Konosuke recognized the huge market potential for an efficient battery-powered bicycle lamp. Although battery-powered bicycle lamps were already in existence, they were generally unreliable and tended to go dead in about three hours.
Determined to overcome these shortcomings, Konosuke spent six months designing a bullet-shaped bicycle lamp that would operate up to 40 hours without a battery change, but wholesalers were skeptical of his claims and refused to market it.
So Konosuke decided to bypass the wholesalers and send samples directly to bicycle shop owners, challenging them to test the performance of his lamp for themselves. 
This bold move resulted in a flood of orders, and wholesalers who had once refused to even talk to Konosuke were now eager to distribute his product.

Konosuke had begun developing a second generation battery-powered bicycle lamp - changing to a square-shaped design. While trying to think of a brand name for this new lamp, he came across the English word international in the newspaper. 
Looking up the definition in the dictionary, Konosuke saw that within international was the word national, meaning of or relating to the people of a nation. 
This struck him as perfect for a product that he believed every household in the country would one day be using. And, in 1927, the National brand was born.

About Company

Under the Panasonic brand and its slogan, Panasonic ideas for life, Panasonic (Matsushita Electric Industrial Co., Ltd.) provides a wide range of products, from audiovisual and information/communication equipment to home appliances and components, as one of the largest electronic companies in the world today. We endeavor to become a Customer Value Creation Company that provides safety, security, comfort and convenience in line with our visions of contributing to a ubiquitous networking society and coexisting with the global environment.