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Market battles increase during economic recession
Presidents of Panasonicfs sales companies and distributors meet with corporate executives in Atami. With its future at stake, the company begins to build a new sales organization that proves a solid foundation for the following period of long, meteoric growth.
Throughout the 1950s, the electronics industry had been enjoying annual market expansion of about 30%, but in 1961 tight finances brought a slowdown that led to a serious excess in production capacity.
Panasonic put its full effort into improving the company's fiscal health, but the economic downturn worsened and, in 1964, profits dropped for the first time since 1950. An increasing number of the companyfs sales companies and distributors were forced into the red.
The company dealt with the situation by calling a nation-wide conference of presidents of all sales companies and distributors in Japan to meet with Chairman Konosuke Matsushita, President Masaharu Matsushita and senior corporate management.
Held in Atami, a hot spring resort southwest of Tokyo, the conference was tense. One after another, representatives of the sales companies and distributors reported desperate financial straits, criticized products and sales policies, and demanded action. However, Panasonic responded by critisizing the management of the sales companies and distributors, insisting that they needed to work harder.
On the final day of the conference, Chairman Matsushita took the rostrum and defused the situation by saying, "Half of the cause for this sorry state of the affairs lies in the recession of the Japanese economy and in the turbulence in the electronics industry, but the other half of the cause lies in the complacency that we developed when times were good. Before blaming our sales companies for their dependence on our side, I think we have to address our own failures. Then, if there is anything to be done by the sales companies, we will request it simply and directly. That is the only way out of this tight spot. Declining sales are not the problem."
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