Earlier this year I commented on a decision by Panasonic to rein in R&D; investment in flat-panel televisions and instead expand its reach into the entry-level market (see “Is Panasonic Kissing Its Future Goodbye?”).

The company appeared to be eyeing significant market share opportunities offered up by the 2009 conversion to digital TV in the U.S. It was a bold move, because while it’s easy to cash in your brand equity and go down-market, once the decision is made it’s nearly impossible to reverse course.

Last month another famous brand made that fateful choice. Liz Claiborne, Inc. agreed to license its namesake brand exclusively to J.C. Penney, ending decades-long relationships with department stores like Macy’s, Dillard’s and Bon-Ton. The Claiborne brand has long been in decline, and a Macy’s spokesperson said the retailer could no longer justify expanding the line because of customer confusion between it and the “Liz & Co.” sub-brand that was being sold exclusively at–you guessed it–J.C. Penney.

The Claiborne brain trust may have created their own problem by overextending the brand, a common manifestation of the loss of focus that afflicts many stalled companies. That said, this new decision may work out. It’s not the first time J.C. Penney has partnered with respected, high-profile designers (Polo Ralph Lauren and Nicole Miller, to name two), and Penney is doing better than many of its rivals in this tough economy.

As with Panasonic’s decision, however, this one will be interesting to watch, and will serve as yet another object lesson for any company struggling with stalled growth. Going downscale–where all the value-conscious buyers are these days–can be extremely tempting. But if you do it, make sure you’re extremely comfortable with your decision. There’s no turning back.

A day after Panasonic announced its decision to focus on the low end of the television market, LG Electronics said its 2009 goal is to increase its flat-panel TV sales by 40%, to 21 million. The company is aiming to improve its category market share by five percentage points. How? By increasing its investments in both R&D and marketing. It’s a smart move.

LG and Panasonic are pursuing two very different strategies to deal with the economic downturn. While Panasonic is following the herd (at its own peril–see below), the approach LG is taking is consistent with what we’ve seen from the most successful corporations we studied. Both companies are pursuing aggressive growth, but while LG is doing so by finding ways to sow more value for the future, Panasonic appears content to reap the value it has sown in the past.

Don’t be surprised if short term results show Panasonic running ahead. But keep in mind that LG may be playing tortoise to Panasonic’s hare.

Osaka-Japan based Panasonic might have just written its own death warrant. In a little-reported decision, the company has decided to reign in investment in its flat-panel TV operations and instead expand its reach into the entry-level television market. Management’s goal is to increase unit sales by 50% within just over a year.

No doubt Panasonic is eyeing the conversion to digital TV (DTV) in the U.S., currently scheduled for February 17 of this year (although the Obama administration is exploring delaying the switchover). This is a potential revenue boon to the company as millions of consumers seek to upgrade their sets, preferring the trusted brand over its generic rivals.

As nice (and necessary) as the goose in revenue will be to Panasonic over the next year or two, I wonder if there have been any internal discussions as to the impact this decision will have on long-term consumer perceptions of the Panasonic brand. An unprecedented wave of television buyers looking for cheap TVs may come to view Panasonic brand as representing just that–cheap TVs. That would hamper the historically venerable brand’s ability to offer high-end anything, and could one day be looked back on as a fatal decision. This is one to watch.