Turning Adversity into Opportunity: Philips in Australia, 1945-1980

Abstract

Philips Australia, the Australian subsidiary of Dutch MNE Philips Electronics, experienced difficulties during 1942–1943, when it came close to being nationalized as enemy property. In response, the company set out to improve its reputation in the local radio parts and electronics industry and in Australian markets. Its strategy of embedding itself in Australian society served the purpose of improving company performance and influencing the government policies that guided the rapid development of Australia’s postwar electronics industry. With this strategy, Philips Australia minimized the risks and maximized the commercial opportunities it faced. The firm localized senior management, maximized local procurement and local manufacturing, took a leading role in industry associations, engaged politically influential board members, and used marketing tools to build a strong brand and a positive public profile in Australia. However, the company became aware of the limitations of this strategy in 1973, when a new Labor government reduced trade protection. Increasing competition from Japanese electronics firms forced Philips Australia to restructure and downsize its production operations. Despite increasing reliance on imports from the parent company’s regional supply centers and efforts to specialize production on high-value added products, the firm saw its profitability and market share in Australia decrease.

Taking the long view of the multinational

“…With ongoing case study work, we expect to be able to contribute to better understanding of the events and sequences that manifest as observable internationalisation (Welch et al , 2016). Van der Eng (2018) demonstrates, for example, the strong emphasis the local Philips Australia managing director placed, post-Second World War, on building social capital with policy makers and the public, consistent with Chetty and Agndal’s (2007) claims as to the role of such efforts in influencing mode change.…”

“…The very long-run data reveals numerous examples of subsequent mode reduction, stepping back from one or more of these activities. For example, as van der Eng (2017a, 2017b, 2018) has tracked, Dutch electrical consumer goods giant Philips initially launched into the Australian market using agents to sell light bulbs (from 1912) and radio valves (1925). They established a wholly owned subsidiary in 1926 importing lamps from The Netherlands.…”

Patents, foreign direct investment and economic growth in Australia, 1860–2010

“…European and Japanese multinationals, such as Philips and Mitsubishi, followed suit by the middle decades of the century, though on a smaller scale. While much of their inventive activity took place in their home nation, firms often transferred new technologies to the host countries in which they invested including Australia (Conlon & Perkins, 2001; Van Der Eng, 2018; Wilkins & Hill, 2011).…”

Firm Performance and Market Behaviour: The Scholarship of David Merrett

“…Some important examples include: Boyce (), Keneley (), Seltzer and Sammartino (), Shanahan and Round (), and Van der Eng ().…”