Could Panasonic Become the IBM of Japan?
Panasonic has endured a painful year of losses, layoffs and “reorgs,” but as the home appliance, technology and now energy firm approaches its 100th year, its future could still shine very brightly. First, as my quick visit to Las Vegas for CES 2012 showed, the company's management is still nimble enough to change with the times. In an era where consumers have a "Groupon" or "want it now on Amazon" mentality, Panasonic is smart to shift away from the high-volume but very low-margin business to consumer market, and instead focus on the more lucrative business to business sector with its digital imaging systems, Toughbook computers, automotive products and professional display equipment. Paired with that focus on the B-to-B market is the company's increasing investment in clean energy technologies. The move is risky, but in the long run could pay off handsomely should the price of petroleum spike. For now its fuel cell business is still a tough sell, and its ramping up of its solar technology offerings faces headwinds from cheap Chinese competitors. Nevertheless, Panasonic's ambitious research and development teams have the capacity to improve these new products' performance while decreasing their costs and most importantly, offer a compelling ROI for consumers. Panasonic has long stood tall in the electronics industry, and with interactive television one theme of CES 2012, the partnership with MySpace could catapult the company as a leader in this new space (not to mention the fact it could rescue MySpace from oblivion). With all these changes underway in Osaka, Secaucus, and other overseas offices, the Panasonic with which many of grew up during previous decades will become a vastly different organization before the firm marks its centennial in 2018. Should Panasonic's business model transformation results in success, another lucrative revenue stream could further strengthen the company: services and consulting. The company is amassing a huge body of core competencies as it morphs from a leading must-have consumer product manufacturer. Panasonic could becom the giant from Japan that becomes indispensable to companies and municipalities that need the tools, equipment and knowledge to become operations that run leaner and more sustainably. As companies with 20th century models realize that they must adapt to the business requirements of the 21st century, Panasonic has the capacity to advise other large organizations on what it takes to overhaul its business units and ramp up production of new technologies. If Panasonic can withstand this rough stretch and thrive with its new product lines, watch for organizations in various industries to knock on its door and ask to learn how it was done. IBM and HP, look out. Photo of Panasonic's display at CES 2012 courtesy Leon Kaye.