The Philips technical alliance: “five and five, on equal terms” (1952)

Buying parity

The subtlety of this alliance lies in the technically weaker party asserting parity with management strength rather than money as its consideration. Not content to remain a mere recipient of a technology license, Matsushita built an equal vessel — a joint venture — and stood alongside its counterpart; it was a negotiation in which Konosuke went out to define, himself, what one must offer to be regarded as an equal. Making up for the technology it did not have with the sales and management strength it did — in that way of balancing the scales, one can read Matsushita’s negotiating instinct.

What is interesting is that this “buying parity” pattern runs long through Matsushita — Panasonic’s view of alliances thereafter. The automotive-battery joint venture it formed with Toyota Motor half a century later was likewise an equal framework, with Panasonic offering battery technology and Toyota an outlet in the car. The idea of striking one of your own strengths against the other side’s strength to reach a balance quietly resonates with the stance Konosuke showed in his bout with Philips.