1952, Matsushita Electric Co., Ltd. of Japan negotiated with Philips in order to introduce advanced technology from the Netherlands. At that time, the strength of the two sides was very different. As a world-famous big company, Philips has a tough and aggressive attitude in the negotiations with its strong financial and technical advantages. Although Kōnosuke Matsushita strives to reduce the technical assistance fee required by Philips, which accounts for 6% of sales, to 4.5%, Philips has set the patent transfer fee at 550,000 US dollars, which must be paid in one lump sum. Moreover, the draft contract is almost completely biased towards the Dutch side. For example, it is stipulated that if the Japanese side breaches the contract or leaks during the execution of the contract, it will be required to be punished or even confiscated. Philips' liability for breach of contract is ambiguous. Therefore, the terms of the contract are quite harsh for Panasonic.
At that time, the total capital of Matsushita Electric was only 500 million yen, and the patent fee of 550,000 dollars accounted for almost half of all the assets of Matsushita Electric. As a result, Kōnosuke Matsushita was caught in a dilemma: if he agreed to the other party's negotiation conditions and signed a contract, Matsushita Electric would face great risks, and in the event of an accident, it might make Matsushita Electric lose its strength and be unable to recover. However, if it did not agree to the other party's negotiation conditions and the negotiations broke down, then the company would lose this good opportunity for cooperation.
Kōnosuke Matsushita deserves to be called "the God of Management". After careful consideration, he finally made up his mind and decided to take a chance. Philips research institute is very powerful, with 3000 researchers and advanced equipment. Once the two parties sign the contract, Panasonic can make full use of this technical resource, which definitely exceeds the price of 550,000 US dollars. Temporary compromises and concessions can be exchanged for their long-term needs and interests. Although the risk is huge, it is worthwhile. Therefore, Kōnosuke Matsushita decided to sign a contract with Philips. This $550,000 and huge risk cost will be the basis for Panasonic's rapid development in the future.