1. What are the benefits of eliminating the long-standing policy at Matsushita that different divisions should be allowed to develop the same basic product? Are there any potential drawbacks of such a policy change?

2. What do you think were the benefits of lifetime employment at Matsushita? Why then did Nikamura effectively end this practice? What benefits did he realize for Matsushita by doing so?

3. What does the example of the Saga factory at Matsushita tell you about the benefits of optimizing workflow for (a) work in progress, (b) the productivity of both employees, and (c) the capital invested in plant and equipment?

4. What are the benefits to Matsushita of a reduction in defect rates?

5. What does the Matsushita example tell you about the importance of functional-level strategies for competitive advantage?

6. Matsushita is a manufacturing company. Do you think that the principles discussed in the case are as important for a service enterprise?

Kunio Nakamura took over as CEO of Matsushita in 2000 when the company was in deep trouble. By 2006 he was able to turn the situation around and has achieved impressive improvements in profitability. Nakamura accomplished this by focusing on efficiency improvements throughout the company. He eliminated rivalries that resulted in duplication of effort in R&D. He reduced the layers of management and slashed the workforce by 19%. He pushed factory managers to raise productivity. The factory in Saga, Japan became the mother plant where productivity improvements were refined and then transferred to other plants in the system. Despite a faster pace of work, quality was improved because employees were able to identify the source of defective products more quickly and correct the error. As a result, productivity was boosted and the company’s reputation was strengthened to producing high-quality merchandise.