In the mid-1990s, Panasonic Europe had begun to outsource component manufacturing and assembly in an attempt to reduce costs. In view of new threats from low cost Asian manufacturers, it now had to assess what learnings could be distilled from the outsourcing activity so far, to guide future decisions and to evaluate various new options for moving manufacturing out of Western Europe into areas with lower costs of production. State-of-the-art manufacturing had always been at the heart of Matsushita’s operations though it could also consider getting out of manufacturing completely, and instead focus more on R&D and marketing activities, as some of the competition had already done. The decisions had to be made swiftly, for there was a clear directive from headquarters that any business in the red for three consecutive years would be shut down–immediately.
