Pioneer Corporation: The NEC Plasma Opportunity (A)
(9 pages of text)
In 2004, Kaneo Itoh, president of the consumer electronics firm Pioneer Corporation, was considering acquiring the plasma display operations of another Japanese firm, NEC. Pioneer had decided some years ago that plasma display panel (PDP) technology was a good strategic area in which to invest. Recently, Pioneer had been selling increasing numbers of plasma television sets using PDPs. While the company was building a new PDP production facility that would soon become operational if demand continued to increase, additional capacity would become necessary. Buying NEC’s plasma operations would give Pioneer this capacity, the potential for realizing scale economies, and some valuable intellectual property NEC had developed. Itoh had to make a decision: Should Pioneer buy NEC’s plasma business?
This case series is suitable for use in introductory and advanced strategy courses. It may be used to discuss environmental changes, how new markets and technologies evolve, and the fit between strategies and activities pursued by a firm. More generally, it offers an opportunity to consider a situation where changes in the business environment make what, at one point, appears to be a straightforward decision more complex in hindsight.
Japan, Large, 2004
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