Philips versus Matsushita Analysis

Short answers
1. Briefly summarize the benefits and risks of a company engaged as an OEM (original equipment manufacturer)
One of the benefits that a company can derive from utilizing Original Equipment Manufacturers (OEM) in their operations is the reduction of costs and the assurance of quality products even during mass production. On the one hand, reducing the production costs is brought about by the cheaper prices for materials and manpower in the countries where the OEMs are located. In turn, this increases overall revenues for the company. On the one hand, the company can also be assured of quality due to the strict testing measures that it can employ before, during, and after production.
In contrast, one of the prevailing risks of OEM manufacturing is the possibility of Intellectual Property Rights Violations as the company divulges its product designs and specifications to another.
2. List both the benefits that arise from an entity’s decision to engage in localization and the shortfalls of such a decision
Some companies, like Philips, have benefited from the idea of localization. Some of the benefits that a company can derive from such technique includes; (1) increased self-sufficiency of local organizations, (2) resilience in different market conditions, such as wars, and (3) tailored marketing for the country’s consumer base CITATION Bar09 \l 1033 (Bartlett, 2009).
In contrast to this, some of the shortfalls of this technique includes (1) increased complexity of organiz...