Panasonic needed to change its strategy in the 1980s in order to respond to demographic and economic changes in China. As the Chinese middle class began to emerge, local companies responded with competitive products. Panasonic then changed its strategy from a transnational strategy to a global strategy.

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Panasonic benefited from moving from a global to a transnational strategy. Panasonic moved into China in the late 1980s, seeing it as a low-cost region in which to manufacture its products. Traditionally, Panasonic had used a global strategy in its operations. It designed standardized products in Japan, manufactured them in low-cost markets, and sold its products primarily in developed markets. China simply served as a manufacturing location. This worked well until the Chinese economy started to grow and mature. As the Chinese middle class began to emerge, local competitors, such as Haier, quickly jumped in with products designed for the Chinese market and out-competed Panasonic in the growing market. This led Panasonic to radically change its way of competing in the global market. Panasonic embraced the need to balance global integration with local adaptation.

Panasonic Needed to Change Its Strategy in the 1980s in Order