Panasonic seems to acquire Blue Yonder
Several media including Nikkei Asia and Reuter reported that Panasonic Corp is planning to acquire Blue Yonder, for $6.45 billion. The deal would be Panasonic’s biggest acquisition since 2011.
The Japanese company acquired a 20% stake in Blue Yonder in 2020 for approximately $790 million. Panasonic will acquire the rest of the stock from shareholders, Blackstone Group and New Mountain Capital. As of March 13th, 2021, there is no official statement from Panasonic.
Two companies has already formed strategic partnership
According to Panasonic Business homepage, the company explains the purpose of partnership with Blue Yonder.
The demand of improvement of productivity in supply chain sector is increasing. This is because digital technologies including the Internet of Things (IoT) and Artificial Intelligence (AI) can improve supply chain drastically. In addition, external business environment is changing continuously and rapidly. Therefore, supply chain management is more crucial for companies.
To tackle the issue, Panasonic enhances its capability by partnering with Blue Yonder, a leader in U.S. supply chain software. The Japanese company strengthens especially software, consulting and service. Panasonic tries to evolve its business statement “Gemba Process Innovation”.
Note: Gemba is a Japanese word and it means on-site.
Who is Panasonic?
Panasonic is a Japanese multinational electronics company, and was founded in 1918. Its founder is Konosuke Matsushita and he is one of the most famous entrepreneurs and executives in Japan. In fact, many current CEOs in Japanese companies acknowledge and admire him.
As of March 13th, 2021, the Japanese electronics giant has mainly 7 business companies. They are Appliances, Life Solutions, Connected Solutions, Automotive, Industrial Solutions, China & Northeast Asia and US Company. The company’s slogan is “A Better Life, A Better World”. In addition, it continuously contributes to the evolution of society and to the happiness of people across the globe.
Who is Blue Yonder?
Blue Yonder is an American software and consultancy company. The US company offers supply chain management, manufacturing planning, retail planning, store operations and category management offerings. Its head office is in Scottsdale, Arizona. Based on its homepage, there are four core values: Empathy, Results, Relentless and Teamwork.
Japanese electronics companies face difficult situation
Japanese electronics companies enjoyed their good old days, but it was more than decades ago. South Korean electronics companies such as Samsung and LG, and Chinese new players have totally changed the business landscape. Even though high standard and quality of Japanese products are still worth buying, their price competitiveness is very low.
In addition, both South Korean and Chinese companies catch up with the quality of products. To get matters worse, some South Korean and Chinese electronic products are better than Japanese. Therefore, there is a simple question: How do the Japanese companies compete with?
Integration between hardware and software is a possible solution so that many Japanese companies set this direction. Panasonic is without exception and the announcement is relating to this strategy. It means that the criteria of competition is changing from price and quality to service.
Of course, price and quality are important factors to choose products and services. However, many companies can earn money by subscription business model thanks to digitalization. To realize this business model is really difficult, but most Japanese manufacturing companies cannot help but choose this option.
Of course, Panasonic is on the way to transform its hardware business model to new model combining hardware with software. However, we can safely say that the Japanese electronics giant accelerates it. What’s more, if Panasonic completes the deal, it will face another problem: Post Merger Integration. One of issues is the difference of culture between two companies. In the other article, we can see “Culture eats strategy for breakfast”. Thus, Panasonic’s ambition to be software & hardware company just starts.