In: Economics
In view of the sluggish sales in the year 2019, Panasonic continued to search for new business opportunities by securing new agency with growth potential.
a) Use the SWOT analysis work on its supply chain management
Would really appreciate if you do not copy paste your answers from other sources and do use your own words and answer according to the marks requirement.
Panasonic is mainly recognised as a consumer electronics brand worldwide. However, there are some less well known aspects of its business which are also operating profitably. The brand operates in four business areas – consumer electronics, automotive, B2B and Housing. Its global footprint is one of its most important strengths. A customer focused company, Panasonic strives to build better lives for people around the world. The brand has some important strengths and is getting aggressive about its future growth in key regions of the world including Asia and Europe
.Despite a small fall in revenue in 2016, the brand registered good profits. Now, Panasonic is geared for its next stage of growth for which it will start reorganising its business. However, a large global business also means large risks including economic, political and structural. This is a SWOT analysis that highlights how the brand is doing in its respective areas and the key pillars driving performance for Panasonic around the globe. This SWOT analysis will help you understand the key strengths and weaknesses before the brand as well as its opportunities and challenges in the short and the long run.
STRENGTHS:
Weaknesses:-
– Weaker marketing strategy – The fast changing business world is putting the brand’s marketing capabilities to test which is why it has been feeling challenged by the aggressive marketing strategies of the other consumer electronics brands. Its marketing capabilities have not still grown as sharp as its nearest competitors. The brand must focus on designing localised marketing strategies for its various markets globally. While its marketing strategy for Japan is effective, for the global markets, it will need to invest more in marketing to come on par with brands like LG and Samsung.Management issues requiring reorganisation and restructuring – A large company can also be a complex company. Panasonic is a global company and seeing the aggressive business environment globally, it must use simpler management structure for better coordination on a global scale. In the recent years, it has done a bit of simplification but that will not be sufficient in the current environment. Panasonic is planning more restructuring and reorganisation in the coming years. However, it should note that a complex structure gives rise to issues that affect sales and growth and it needs to bring more synergy in its Manufacturing and sales to win in a highly competitive and highly volatile market. Geopolitical challenges are also a hindrance to growth. Faster growth can be achieved only through a simpler and more well managed structure.
– Slow growth compared to competitors: – Compared to its competitors like Philips, Samsung, Haier etc, the brand is less aggressive in its business strategy and that’s why its growth rate is affected. Other brands have been able to make deeper forays into local markets based on their sharper and more aggressive business strategies.
– Aggressive marketing techniques of competitors – The aggressive marketing techniques used by its competitors pose a formidable challenge and so sales of Panasonic products come under pressure due to their excellent marketing capabilities. Compared to them, it is a less marketed brand despite having good technology and quality. This is an important weakness which Panasonic must focus to solve in the shorter run.
Opportunities: –
– Rising middle class income – Panasonic’s opportunities are growing in this fast changing world. The income of the middle class has grown worldwide. It has become the most important segment of consumers for the brands. Rising middle class income has also given rise to new consumption trends that will prove favourable for the consumer electronics brands like Panasonic. An income rise is significant for the middle class since it will have more disposable income and several of Panasonic’s products target the middle class consumers. So, this is a profitable trend.
Changing consumer demographics – The changing consumer demographics are also good sign that will love favourable for Panasonic. The percentage of young consumers in the global population is growing. Millennial are more familiar with technology and spend more shopping online. They were born with technology and use it with more convenience than previous generations. This means higher sales for technology brands.
– Lifestyle changes – In this era, people’s lifestyle has also undergone a major change which is significant for consumer electronics brands. Even in the developing and underdeveloped countries, people are growing more aware about technology and technology products. They spend more time on social media and come across brands and products on a daily basis. they want more convenience in their lives and that convenience comes from technology. Panasonic makes and sells consumer electronics products which are aimed at adding more convenience and happiness to people’s lives.
– Asian markets – Asian markets have grown more open in the recent years and that brings a bigger opportunity before the innovative consumer electronics brands like Panasonic. India has also risen on this scale and China was faster to make its environment favourable for the foreign brands. Several global brands are already enjoying profitable partnerships with the local brands in the Asian countries. The rising income in these two economies is a good sign for consumer electronics businesses. India and China both are tough economies that survived some of the most bitter economic fluctuations.
THREATS:
– Rising Competitive Pressure – Competitive pressure has become a major threat before the consumer electronics brands in the 21st century. Panasonic has several competitors with a strong market position. From Samsung to LG and Philips, all these brands have grown more aggressive in their business strategy. As a result pressure on Panasonic remains high and therefore its focus on R&D as well. Innovation has become the key to success in this era and brands have to invest more in quality because of consumers’ rising awareness.
– Regulatory Pressures – Another major threat to the global brands comes from government and regulatory bodies. They have grown more aggressive with regard to enforcement of relevant laws and oversight of businesses. Panasonic has maintained a string brand image and good financial position which helps it overcome the pressure to a large extent and still fast expansion becomes challenging if governments continue to remain aggressive in their attitude towards business.
Supply Chain
:
Management Approach
Panasonic aims to build sustainable supply chains with its suppliers based on its
standard purchase agreement, which clearly states its principles for respecting human
rights, maintaining safe working environments, prohibiting discriminatory behavior, and
actions in other areas.
Many companies have concentrated on optimizing their supply chains with suppliers around the world in addition to
themselves, in order to stably and rapidly provide products and services to customers with better quality and cost
performance.
Against a backdrop of increasing awareness of compliance, human rights, and the environment around the world, in
addition to respecting the rights of their own group employees, companies are now expected to responsibly survey the
state of labor conditions, compliance with laws and regulations, and environmental measures at their suppliers, and take
action if necessary to remedy any shortcomings. A company that continues to conduct business with secondary or even
tertiary suppliers discovered to have shortcomings in these areas will be criticized by society, which may impede the
company’s ability to manufacture products and otherwise conduct
business.
Panasonic’s Standard Purchase Agreement clearly explains its principles regarding respect for human rights, keeping
working environments safe, prohibiting discriminatory behavior, and actions in other areas. Our suppliers, as well as their
subcontractors and suppliers, are required to adhere to these principles. Panasonic aims to build a sustainable supply
chain with its suppliers by updating and distributing information about the principles it wants its suppliers to observe from
a
CSR perspective as well.
In order to fulfill its social responsibility in its procurement practices, Panasonic has adopted a basic policy of not using
conflict minerals as raw materials, because conflict minerals are a source of funding for organizations that are involved in
human rights abuses, environmental destruction, bribery, and other unlawful activities in regions of conflict.
Specifically, Panasonic participated in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals in
Conflict
-Affected and High-Risk
Areas project that the Organization for Economic Co-
operation and Development (OECD)
began in August 2011. In fiscal 2014, Panasonic began investigating its smelters for evidence of conflict minerals in
collaboration with the Japan Electronics and Information Technology Industries