Panasonic 2003 Annual Report Download - page 21

Matsushita Electric Industrial 2003 19
procurement and production, all on a global basis. To this
end, Matsushita will make full use of its black-box tech-
nologies, technology platforms and globalized operational
structure in carrying out simultaneous global product intro-
ductions of strategic products.
*Matsushita markets home appliances in Japan under the “National” brand
name. The National brand is a household name in Japan that stands for
reliability and trust. Furthermore, the National brand name has been in
use since the Company’s founding, and will therefore continue to be
used, along with the Panasonic brand name, in the domestic market.
Creating a Globally Optimized Operational
Structure to Support Global Marketing
Beginning in fiscal 2004, the performance of each business
domain company will be evaluated based on CCM and cash
flows, on a global consolidated basis, including overseas
companies under their control. This system will provide
incentive to each business domain company to quickly
establish globally optimized operational structures in their
respective domains. We have also clarified the roles of
regional headquarters, which include responsibility for
return on investment in overseas companies, as the direct
shareowners of such companies.
Under the new Groupwide business and organizational
structure, we will carry out global marketing initiatives to
achieve optimization from an overall global perspective for
low cost and high efficiency. At the same time, we will pur-
sue optimization within each region as applied to product
and marketing strategies tailored to the needs of each
region.
Regarding production, the Company is continuing to
establish a globally optimized manufacturing structure, tak-
ing into consideration cost and proximity to market, as well
as social, political and environmental risk factors. Currently,
we view Asia, China and Eastern Europe as critical to this
structure.
In particular, China is quickly becoming the primary set-
ting for global competition among companies from all over
the world. In addition, local manufacturers in China are
becoming more competitive, not only in terms of price, but
quality and technology as well, and are expanding their over-
seas presence. Matsushita is currently establishing a cost
structure that can compete with Chinese manufacturers.
In addition, we will strengthen manufacturing opera-
tions in China based on three key words: localization,
integration and collaboration. Localization pertains to a
complete process, from research, development and design,
to manufacturing, sales and service, all conducted locally.
Integration refers to the strategic concentration of manufac-
turing functions to increase efficiency. In terms of
collaboration, Matsushita will implement joint development
with governments, universities and other organizations, and
utilize OEM and electronics manufacturing services (EMS),
as necessary. In April 2002, for example, Matsushita and
TCL reached a collaborative agreement, combining the two
companies’ strengths in R&D, manufacturing and sales.
Through all of the aforementioned initiatives, we aim to
expand operations in China to achieve a ¥1 trillion business
by 2005, which will lead the Company in overall growth
and contribute to earnings.
We will strive to enhance brand value through competi-
tive products and global marketing, and by overseas
operations, which are considered a corporate growth engine,
all aimed at achieving a top position in global markets.
Assembly operations in Shanghai for microwave oven to be marketed globally
“Under the new Groupwide organizational structure, we will
provide management support for the global operations of busi-
ness domain companies, strengthen regional sales and
marketing activities, and establish a globally optimized manu-
facturing structure, all aimed at making overseas operations
an engine for overall corporate growth.”
Yukio Shohtoku
Executive Vice President (member of the Board)
In charge of Overseas Operations