Masahiro Itami: ”Different cultures, similar goals.”
On the 17th of December 2014 Masahiro Itami visited Faculty of Economics, University of Ljubljana. He intends to relocate with his family from Japan to Velenje following the partnership between Japan’s Panasonic and Slovenia’s Gorenje. In an interview for EFnews he presented the differences and similarities between the Panasonic and Gorenje and told us about his experience of Slovenia.
In 2013 Gorenje entered into a partnership agreement with Panasonic, which bought nearly 13% of Gorenje’s shares with an investment of 10 million EUR. The two companies have entered into a partnership to share research and development expertise. Together, they began to develop a new model of washing machine with a team of 40 people (20 Slovenes and 20 Japanese). Masahiro Itami explained that because each market is different it is impossible to create a global optimum process for the development of new products. Many Japanese prefer to buy more expensive and multi-functional washing machines, whereas, Europeans look a lot more at price and prefer to purchase a number of different appliances that perform different functions, rather than one costly machine. “In Slovenia there are substantially fewer people that in Japan. I was born in Osaka, where approximately 9 million people live today. In Japan, we live in smaller apartments, and so we need multi-purpose, high-tech appliances.”
The different development processes of East and West
Itami explained that Panasonic has a very different approach to the development of new products, than Gorenje. At Panasonic each individual development phase is carried out by a single department that is specialized in one area. Departments vary from marketing to the production of individual components for a new product. Accountability is thus divided between the individual departments, which are more adaptable to different market requirements. Gorenje’s development is based on research teams, which are responsible for the development of the whole project and consists of members who cover different areas. This method of work was adopted during the development of a new washing machine with Panasonic.
Regarding the composition of new products, Panasonic applies a system of vertical integration. Panasonic develops most of the components by itself and minimalizes the reliance on external producers of components. This provides greater control over development and more exclusive products. In Slovenia and elsewhere in Europe, the home appliance manufacturers increasingly rely on external suppliers. This horizontal integration provides lower prices, but due to standardized components, the European products are less innovative and differentiable.
Future of Gorenje with Panasonic
Itami predicts that Gorenje and Panasonic will expand their cooperation in the coming years. From the development of washing machines, they will move forward to the development of other household appliances. Panasonic sees Gorenje as one of the key partners in its expansion into Europe, where today large powerful companies have already divided the market amongst themselves. ”Europe is not Asia, Africa, or other parts of the world where they do not have a long tradition in the production of home appliances, so Panasonic wants to continue to strengthen ties with Gorenje.” The success of the partnership with Slovenia may also provide further investment from Japanese companies and establish stronger ties between the two countries.
Aleksander Koren, EFnews
Proofread by Leeanna Whirl, EFnews
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