1931

The New York Stock Exchange crashed on October 24, 1929, spreading panic among the world's financial markets. The already weakened Japanese economy was thrown into disarray. Prices plummeted, employee rolls were slashed throughout the country, and many factories were closed.
Panasonic's sales declined, and by the end of December its warehouses were overflowing with unsold stock. Company executives could see no solution other than staff cutbacks, but Matsushita told them, "Cut production by half starting now, but do not dismiss even a single employee. We'll halve production not by laying off workers, but having them work only half days. We will continue to pay the same wages they are getting now, but there will be no holidays. All employees should do their best to sell inventory."
Employees threw themselves into the sales effort with fierce determination. Within two months, the excess inventories were gone and demand had recovered, allowing full-scale production to resume.
At the beginning of January 1931, the company celebrated its first shipment of the year to throw off the despair of the depression-a tradition that lasted up until 1965.

Japan's national broadcasting station began transmitting in 1925, and by 1930 it had more than 700,000 subscribed listeners. But the radio sets available at the time were subject to frequent breakdowns. Matsushita himself was inconvenienced by a set that broke down just as he was about to listen to a program, and resolved to build "a radio that doesn't break."
In August 1930, the company set up Kokudo Electric Co. in a joint venture with a radio manufacture and began producing radios. However, the company was soon swamped with returns. Matsushita found that, although radio shops had some technical knowledge and were capable of solving minor problems, Panasonic retailers simply sent back the sets if they didn't work.
Matsushita was convinced it was worth building a set that ordinary electrical dealers could handle. In March 1931, he took charge of Kokudo Electric, and instructed senior engineer Tetsujiro Nakao to develop a set that would meet his expectations. After three months of hard work, a prototype three-tube set was ready, which immediately won first prize in a contest sponsored by Japan's public broadcasting station.
Matsushita priced the new radio at ¥45 at a time when cutthroat competition was forcing other manufacturers to sell their products at ¥25 to ¥30. This was in line with his fair-pricing policy, which maintained that adequate profits were imperative to healthy development of the industry.
Matsushita redoubled his commitment to fair pricing when he observed a company driven out of business by a trading company that undersold it to gain a monopoly position, then proceeded to milk the market for excessive profits.