Market Strategy
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Market strategy
2.2 Product diversification strategies in consumer electronic market
Basic concept of diversification concept was defined by Ansoff (1957) as product
diversification means the entrance to new markets with new products. Later on,
Dundas and Richardson (1980) specified product diversification as differentiation of
markets and targeting of more than one target market. And Amit and Livnat (1988)
expressed the motives for diversification and through that study he identified main
motive is financial motive and identified the business diversification as the
expansion of the size of business achieving economies of scale and generating a
combined effect on overall oraganization's performance. Furthur number of studies
on the topic strategic management have analysed relationship between
diversification strategy and organizational performance (Shen et al., 2011 and
Burgers et al., 2009)
Kotler (2002, P.45) has identified three strategies a company can follow to grow the
company fast. Intensive growth strategy is the identification of opportunities to
accomplish more growth within the company's current businesses. Integrative
growth strategy means the identification of opportunities to acquire or build
businesses that are already related to the company's current businesses.
Diversification growth strategy means identification of opportunities to add
attractive businesses that are unrelated to the company's current businesses.
According to Ansoff's product market expansion grid it has identify three types of
diversification strategies. The concentric diversification strategy the horizontal
diversification strategy and conglomerate diversification strategy. In concentric
diversification company looks for new products that have technological or marketing
combined effect with existing product lines, though the new products are target to a
different group of customers. In horizontal diversification strategy, the company
seeks for new products that relates to its current customers but technologically
unrelated to the current product line. The third strategy, conglomerate
diversification strategy, seeks new businesses that have no relationship to the
company's current technology, products, or markets.
According to World Electronic Industries 2008 -2013 Report the electronics industry
not only consists with mass market or consumer electronic products also includes
electronic products used in transport such as cars,trains.planes etc, electronics used
in defence equipment, in IT infrastructures, in manufacturing process or professional
services used t to enhance productivity. In electronic Industry consumer products
only represented 53% of the electronics industry in 2008.This report also has
mentioned that in 2008 the electronics industry represented 1140 billion Euros and
it is equivalent in size to Car industry which is 1800 billion Euros in 2008. Expansion
of electronics and business growth cycles are the origins of such a fast
development. Earlier in 60s and 70s government driven this, enterprises in the 80s
and individuals started this in 90s to up to now. The electronics industry is re
investing since its inception with huge Reasearch and Development investment to
produce new products.
At present society concerns on energy, health and security and expects new
electronic solutions that are not being developed yet providing long lasting growth
perceptions for the overall industry for the coming decades.Eventhough the
electronics industry exhibits more mature growth, still it is a fresh industry with
upcoming major growth perspectives. Accordingly it can argue as the development
in electronic industry has occurred due to heavy investments in research and
development leading to new products confirming product diversification strategy.
Read more: http://www.ukessays.com/essays/marketing/the-case-study-ofpanasonic-marketing-essay.php#ixzz3yw98zUw6
Currently active process of change in the electronics industry has increased
production of electronic products that are free of hazardous elements. A
transformation has taken place with the support of almost all businesses to
eliminate polyvinyl chloride (PVC) and brominated flame retardants (BFR), which
has led to the introduction of many products free of PVC and BFRs. This is
noticeable in mobile phones, computers with a little progress with TV. Several
companies have had to revise their original deadlines for the elimination of the most
hazardous substances. Companies are in the process of translating these
commitments into products on the market, from individual components or some
niche products and extends to the complete elimination of PVC and BFR from
comprehensive product lines. Mobile phones have shown the most progress, with
most market leaders now produce halogen free mobile phones, representing at least
60% of the market at 20,111, followed by the PC, in the phase of plans market
leaders means that at least 53% of the market will be halogen-free in 2012. It is
clear that technical barriers to eliminating PVC and BFRs have been mostly
overcome, the iNEMI Industry Association has published a timeline showing that
halogen-free components for PCs (laptops and desktops) will be widely available
supply chain in late 2011, including the evaluation and qualification of the parts of
printed circuit boards and high performance power cables 2. TV manufacturers have
shown the least progress. The remaining block still uncertain availability of free
components of PVC and BFRs across the supply chain. Only 21% of the TV market is
expected to be PVC / BFR in 2011, and depends on the companies that meet its
commitments. (Electronics Industry -Milestones on the Road to Greener
Electronics,2010,P.1)
2.3 Product diversification strategies of Panasonic Corporation
According to Panasonic Website (2013) Panasonic carry out businesses in four areas,
namely residential, non residential, mobility and personal. 'Future Craft 'the design
philosophy of Panasonic which incorporates the spirit of creativity attached with in
the heritage of Japanese craftsmanship adhere to principles of universal design and
sustainability. Company design wide rang products for consumer electronics such as
audio visual equipment, communication devices, home electronics, cosmetics
appliances, lighting, cables, energy management, construction supplies, homes,
buildings and retail environments. Company's main mission is to supply customer
satisfaction in terms of product design globally. Panasonic's design centers spread in
the world together expect becoming the number one Design Innovation Company
by 2018.
It is clear that Panasonic look forward with an intention of doing product
diversification in terms of product design through the Design Company. The latest
concept of eco design of Panasonic supports customer's maintainable lifestyle by
imagining the energy or resource saving features of our products. Eg.Eco Navi
Product Family of Panasonic .Eco Navi is a technology distinctive to Panasonic, in
which the appliance self regulates itself when it identifies a chance to save energy.
For example: A washing machine will prevent itself from over washing when it
recognizes the soil level of the load. A refrigerator will recognize when the door has
not been opened for a long time (in night) go on a power saving mode.
Grimm and Malschinger (2010:P.4-8) Specified six types of product differentiation
strategies as product differentiation, unique characteristics, price
differentiation,nitche offers, differentiation through services, differentiation through
direct communication , and through packaging. So Panasonic Corporation should not
limited its product diversification strategy only to the product differentiation through
design concept.
In 2013 Panasonic has incorporated research and development Centre in its new
washing machine factory in Vietnam. The new factory concentrate on the
improvement of Panasonic's advanced eco and smart technologies underlying its
obligation for environmental sustainability. The factory focuses to achieve 50% of
production for the local market and the rest 50% for export to other ASEAN
countries. It targets manufacturing capacity of 600,000 sets of washing machines
per annum employing around 300 locals by 2014. R&D integration within the facility
serves as a launch pad for innovation as it develops advantage in home appliances
with advanced designs designed for the local market as well as other ASEAN
countries. This is also one step of product diversification strategy of Panasonic.
Panasonics' 'Modern Classic' LED bulb recognised with iF Gold Product Design Award
for second year running. Achieving brightness equivalent to that of a 40W
incandescent light bulb, there is a wider possibility for application and in turn a
significant contribution to energy save.The Gold design best 100 award was won by
the company for the product series using recycled materials.A product group that
utilizes recycled materials for their plastics and insulation. Product development
initiatives considerate of the environment as well as attractive design were highly
valued.Additionally Good Design best 100 award was won by Smartphone for the
compact design featuring a large screen which is water and dustproof. Its design
form and feel sit comfortably in one's hand. Long Life Design Award achieved for
Smart Archi Series, Pendant/Bracket Light for simple design that can use widely in
various locations such as offices and stores. This features timeless design that
followed 'one with architecture' concept. (Panasonic Website, 2013)
Full HD remote video camera got the Gold Award as it designed for usability. The
directional shape of the lens unit enables a smooth remote operation as the user
can see where the camera is pointing at. An easy maintenance is achieved through
a removable cover which provides a wide opening. The neutral form ensures that it
blends well into any environment wherever it is installed. Panasonic has won the
Gold Award at the Design Excellence Awards 2012 (IDEA 2012) for Clear Glass LED
Bulb also obtained a Gold Award at the 2011 Good Design Award in Japan and the
2012 if Product Design Award in Germany, widespread Gold awards at three
competitive design contests in the US, Germany and Japan.
2.4 Product diversification strategies of Panasonic Competitors
A competitor of Panasonic, Toshiba of Japan is huge company operating in electronic
goods. It manufactures different products or varieties of some products on the same
assembly lines through a flexible manufacturing system. At Ohme it assembles nine
varieties of computers on the same line and on the adjacent line it assembles 20
varieties of lap top computers. It is able to switch from one product or variety to
another instantaneously at low cost and makes profits on low volume production
runs. This flexibility of Toshiba to respond quickly and easily to the fast changing
market demand is definitely one of its competitive advantages. Whereas its
competitors make profits only through long volume runs of a particular model.
(Strategic Planning, 2013).
Another competitor Samsung Electronics' vision is, "Inspire the World, Create the
Future." This new vision reflects Samsung Electronics' commitment to stimulating its
communities by managing Samsung's three main strengths: "New Technology,"
"Innovative Products," and "Creative Solutions." and to promoting new value for
Samsung's core network: Industry, Partners, and Employees. (Samsung website,
2013). As per Annual report of Samsung (2012: p.1-5) Samsung Electronics at the
lead of changes, delivering both exciting innovation and exceptional value to people
and communities around the globe. Company's obligation is focused on smart and
genuine innovation, a transformational change that creates a well world. Samsung
Electronics brand is gaining strength and value globally. In 2012, Samsung ranked
first on the list of US top patent assignees. More patents strengthen Samsung
position among its competitors. The firm also won many awards for the design of its
products, proving the superior advantage over the competitors.
Read more: http://www.ukessays.com/essays/marketing/the-case-study-ofpanasonic-marketing-essay.php#ixzz3yw9S6QwS
2.2 Product diversification strategies in consumer electronic market
Basic concept of diversification concept was defined by Ansoff (1957) as product
diversification means the entrance to new markets with new products. Later on,
Dundas and Richardson (1980) specified product diversification as differentiation of
markets and targeting of more than one target market. And Amit and Livnat (1988)
expressed the motives for diversification and through that study he identified main
motive is financial motive and identified the business diversification as the
expansion of the size of business achieving economies of scale and generating a
combined effect on overall oraganization's performance. Furthur number of studies
on the topic strategic management have analysed relationship between
diversification strategy and organizational performance (Shen et al., 2011 and
Burgers et al., 2009)
Kotler (2002, P.45) has identified three strategies a company can follow to grow the
company fast. Intensive growth strategy is the identification of opportunities to
accomplish more growth within the company's current businesses. Integrative
growth strategy means the identification of opportunities to acquire or build
businesses that are already related to the company's current businesses.
Diversification growth strategy means identification of opportunities to add
attractive businesses that are unrelated to the company's current businesses.
According to Ansoff's product market expansion grid it has identify three types of
diversification strategies. The concentric diversification strategy the horizontal
diversification strategy and conglomerate diversification strategy. In concentric
diversification company looks for new products that have technological or marketing
combined effect with existing product lines, though the new products are target to a
different group of customers. In horizontal diversification strategy, the company
seeks for new products that relates to its current customers but technologically
unrelated to the current product line. The third strategy, conglomerate
diversification strategy, seeks new businesses that have no relationship to the
company's current technology, products, or markets.
According to World Electronic Industries 2008 -2013 Report the electronics industry
not only consists with mass market or consumer electronic products also includes
electronic products used in transport such as cars,trains.planes etc, electronics used
in defence equipment, in IT infrastructures, in manufacturing process or professional
services used t to enhance productivity. In electronic Industry consumer products
only represented 53% of the electronics industry in 2008.This report also has
mentioned that in 2008 the electronics industry represented 1140 billion Euros and
it is equivalent in size to Car industry which is 1800 billion Euros in 2008. Expansion
of electronics and business growth cycles are the origins of such a fast
development. Earlier in 60s and 70s government driven this, enterprises in the 80s
and individuals started this in 90s to up to now. The electronics industry is re
investing since its inception with huge Reasearch and Development investment to
produce new products.
At present society concerns on energy, health and security and expects new
electronic solutions that are not being developed yet providing long lasting growth
perceptions for the overall industry for the coming decades.Eventhough the
electronics industry exhibits more mature growth, still it is a fresh industry with
upcoming major growth perspectives. Accordingly it can argue as the development
in electronic industry has occurred due to heavy investments in research and
development leading to new products confirming product diversification strategy.
Read more: http://www.ukessays.com/essays/marketing/the-case-study-ofpanasonic-marketing-essay.php#ixzz3yw98zUw6
Currently active process of change in the electronics industry has increased
production of electronic products that are free of hazardous elements. A
transformation has taken place with the support of almost all businesses to
eliminate polyvinyl chloride (PVC) and brominated flame retardants (BFR), which
has led to the introduction of many products free of PVC and BFRs. This is
noticeable in mobile phones, computers with a little progress with TV. Several
companies have had to revise their original deadlines for the elimination of the most
hazardous substances. Companies are in the process of translating these
commitments into products on the market, from individual components or some
niche products and extends to the complete elimination of PVC and BFR from
comprehensive product lines. Mobile phones have shown the most progress, with
most market leaders now produce halogen free mobile phones, representing at least
60% of the market at 20,111, followed by the PC, in the phase of plans market
leaders means that at least 53% of the market will be halogen-free in 2012. It is
clear that technical barriers to eliminating PVC and BFRs have been mostly
overcome, the iNEMI Industry Association has published a timeline showing that
halogen-free components for PCs (laptops and desktops) will be widely available
supply chain in late 2011, including the evaluation and qualification of the parts of
printed circuit boards and high performance power cables 2. TV manufacturers have
shown the least progress. The remaining block still uncertain availability of free
components of PVC and BFRs across the supply chain. Only 21% of the TV market is
expected to be PVC / BFR in 2011, and depends on the companies that meet its
commitments. (Electronics Industry -Milestones on the Road to Greener
Electronics,2010,P.1)
2.3 Product diversification strategies of Panasonic Corporation
According to Panasonic Website (2013) Panasonic carry out businesses in four areas,
namely residential, non residential, mobility and personal. 'Future Craft 'the design
philosophy of Panasonic which incorporates the spirit of creativity attached with in
the heritage of Japanese craftsmanship adhere to principles of universal design and
sustainability. Company design wide rang products for consumer electronics such as
audio visual equipment, communication devices, home electronics, cosmetics
appliances, lighting, cables, energy management, construction supplies, homes,
buildings and retail environments. Company's main mission is to supply customer
satisfaction in terms of product design globally. Panasonic's design centers spread in
the world together expect becoming the number one Design Innovation Company
by 2018.
It is clear that Panasonic look forward with an intention of doing product
diversification in terms of product design through the Design Company. The latest
concept of eco design of Panasonic supports customer's maintainable lifestyle by
imagining the energy or resource saving features of our products. Eg.Eco Navi
Product Family of Panasonic .Eco Navi is a technology distinctive to Panasonic, in
which the appliance self regulates itself when it identifies a chance to save energy.
For example: A washing machine will prevent itself from over washing when it
recognizes the soil level of the load. A refrigerator will recognize when the door has
not been opened for a long time (in night) go on a power saving mode.
Grimm and Malschinger (2010:P.4-8) Specified six types of product differentiation
strategies as product differentiation, unique characteristics, price
differentiation,nitche offers, differentiation through services, differentiation through
direct communication , and through packaging. So Panasonic Corporation should not
limited its product diversification strategy only to the product differentiation through
design concept.
In 2013 Panasonic has incorporated research and development Centre in its new
washing machine factory in Vietnam. The new factory concentrate on the
improvement of Panasonic's advanced eco and smart technologies underlying its
obligation for environmental sustainability. The factory focuses to achieve 50% of
production for the local market and the rest 50% for export to other ASEAN
countries. It targets manufacturing capacity of 600,000 sets of washing machines
per annum employing around 300 locals by 2014. R&D integration within the facility
serves as a launch pad for innovation as it develops advantage in home appliances
with advanced designs designed for the local market as well as other ASEAN
countries. This is also one step of product diversification strategy of Panasonic.
Panasonics' 'Modern Classic' LED bulb recognised with iF Gold Product Design Award
for second year running. Achieving brightness equivalent to that of a 40W
incandescent light bulb, there is a wider possibility for application and in turn a
significant contribution to energy save.The Gold design best 100 award was won by
the company for the product series using recycled materials.A product group that
utilizes recycled materials for their plastics and insulation. Product development
initiatives considerate of the environment as well as attractive design were highly
valued.Additionally Good Design best 100 award was won by Smartphone for the
compact design featuring a large screen which is water and dustproof. Its design
form and feel sit comfortably in one's hand. Long Life Design Award achieved for
Smart Archi Series, Pendant/Bracket Light for simple design that can use widely in
various locations such as offices and stores. This features timeless design that
followed 'one with architecture' concept. (Panasonic Website, 2013)
Full HD remote video camera got the Gold Award as it designed for usability. The
directional shape of the lens unit enables a smooth remote operation as the user
can see where the camera is pointing at. An easy maintenance is achieved through
a removable cover which provides a wide opening. The neutral form ensures that it
blends well into any environment wherever it is installed. Panasonic has won the
Gold Award at the Design Excellence Awards 2012 (IDEA 2012) for Clear Glass LED
Bulb also obtained a Gold Award at the 2011 Good Design Award in Japan and the
2012 if Product Design Award in Germany, widespread Gold awards at three
competitive design contests in the US, Germany and Japan.
2.4 Product diversification strategies of Panasonic Competitors
A competitor of Panasonic, Toshiba of Japan is huge company operating in electronic
goods. It manufactures different products or varieties of some products on the same
assembly lines through a flexible manufacturing system. At Ohme it assembles nine
varieties of computers on the same line and on the adjacent line it assembles 20
varieties of lap top computers. It is able to switch from one product or variety to
another instantaneously at low cost and makes profits on low volume production
runs. This flexibility of Toshiba to respond quickly and easily to the fast changing
market demand is definitely one of its competitive advantages. Whereas its
competitors make profits only through long volume runs of a particular model.
(Strategic Planning, 2013).
Another competitor Samsung Electronics' vision is, "Inspire the World, Create the
Future." This new vision reflects Samsung Electronics' commitment to stimulating its
communities by managing Samsung's three main strengths: "New Technology,"
"Innovative Products," and "Creative Solutions." and to promoting new value for
Samsung's core network: Industry, Partners, and Employees. (Samsung website,
2013). As per Annual report of Samsung (2012: p.1-5) Samsung Electronics at the
lead of changes, delivering both exciting innovation and exceptional value to people
and communities around the globe. Company's obligation is focused on smart and
genuine innovation, a transformational change that creates a well world. Samsung
Electronics brand is gaining strength and value globally. In 2012, Samsung ranked
first on the list of US top patent assignees. More patents strengthen Samsung
position among its competitors. The firm also won many awards for the design of its
products, proving the superior advantage over the competitors.
Read more: http://www.ukessays.com/essays/marketing/the-case-study-ofpanasonic-marketing-essay.php#ixzz3yw9S6QwS
