PHILIPS CASE STUDY

Submitted By:
Kumar Raj
Shivam Gupta
Aditya Raman
Prashant kathuria
Debashree
Chakraborty.
INDUSTRY ELECTRONICS
Founded Eindhoven, 15 May 1891
Founder Gerard Philips
Frederik Philips
Headquarters Amsterdam, Netherlands
Area served Worldwide
Key people Jeroen van der Veer(Chairman)
Frans van Houten (CEO)
Products Home appliances
Lighting
Medical
equipment
Revenue €21.39 billion (2014)
Operating income €486 million (2014)
Profit €415 million (2014)
Total assets €28.35 billion (2014)
Total equity €10.86 billion (2014)
Number of employees 105,365 (2014)
Slogan "Innovation & You"
Website www.philips.com/global/
PHILIPS
sense and simplicity

DIVISIONS
 Philips Consumer Electronics
 Philips Lighting
 Philips Medical Systems
 Philips Domestic Appliances and Personal
Care
 B2B
• Royal Philips Electronics of the
Netherlands is a diversified
health and well-being company.
• Headquartered ---Netherlands,
more than 186,000 employees in
more than 60 countries
worldwide.
• Market leader---cardiac care,
acute care and home healthcare,
energy efficient lighting
solutions and new lighting
applications,
• It is also right up there in
lifestyle products for personal
well-being and male shaving
and grooming as well as portable
entertainment and oral
healthcare.
Philips Headquarters in
Amsterdam, Netherlands
 (1910 to 1940s)
 Philips Metal Filament Lamp Factory Ltd. was
founded in Eindhoven in 1907.
 That was followed in 1912 by the foundation
of
Philips Lightbulb Factories Ltd.

 In 1920s,Philips started to diversify its

product range.
 In the 1920s, the company started to
manufacture other products, such as vacuum
tubes.
 In 1939 they introduced their electric razor,
the
Philishave.

 In 1949, the company began selling

television sets.
V
a
c
 1990 TO 2015
 In may 1990 when company  In January 2011 Philips agreed
posted losses of $2.6 billion,top to acquire the assets of Preethi,
management launched a major a leading India-based kitchen
initiative known as”Operation appliances company.
Centurion”.  In March 2012 Philips
 In 1999,Philips embarked on a announced its intention to sell,
worldwide marketing campaign or demerge its television
and changed their company’s manufacturing operations
to TPV Technology.
image to a technology-oriented
company rather than a market  April 2013, Philips
– oriented one. announced a collaboration with
Paradox Engineering for the
 In 2001,Philips launched a realization and implementation
company wide restructuring of a “pilot project” on network-
program called “Towards One connected street-lighting
Philips’(TOP) under CEO management solutions. This
Gerard Kleisterlee to foster project was endorsed by the San
greater co-operation. Francisco Public Utilities
 The program helped not only in Commission (SFPUC).
lowering costs but also promoted a
spirit of collaboration.
PHILIPS STREET LIGHT PROJECT
 PHILIPS INDIA OPERATIONS
 Philips began operations in India in 1930
with the establishment of Philips
Electrical Co. (India) Pvt Ltd in Kolkata .

 In 1948, Philips started

manufacturing radios in Kolkata. In
1959, a second radio factory was
established near Pune.

 In 1970 a new consumer electronics factory

began operations in Pimpri near Pune; the
factory was closed in 2006.

 In 1996, the Philips Software Centre

was established in Bangalore, later
renamed the Philips Innovation Campus.

 In 2008, Philips India entered the

water purifier market.

 In 2014, Philip's was ranked 12th

among India's most trusted brands
according to the Brand Trust Report, a
study conducted by Trust Research
 REVENUE

• Globally,Philips derives 34 percent of its revenues from lighting ,in

India,the figure is 58 per cent.

• In Health care,the global contribution is 40 per cent.In India it is

18 per cent

• In Consumer lifestyle,the company gets 26 per cent of its

overall revenues,in India,it is 24 per cent.

• Totally the Indian unit closed the fiscal ended march 2012 with
revenues of
Rs 5,579 crore,growing at a clip of about 23 per cent per annum.
 PHILIPS
GROWTH OVER THE YEARS
PHILIPS
INTRODUCED
BOUGHT
PHILIPS THE
OPTIVA ACQUIRED
WAS COMPACT
CORPORATIO THE ASSETS
FOUNDED. PHILIPS AUDIO OF PREETHI.-
N INDIA BASED
LIGHTBULB CASSETTE
INTRODUCED TAPE KITCHEN
FACTORY THEIR APPLIANCES
COMES FOLLOWED COMPANY
ELECTRIC
INTO. LASER. BY “RADIO
EXISTANCE RECORDER”
. FEW YEARS
LATER.

1891 1912 1920 1939 1949 1963 1982 2000 2011 2015

. .

PHILIPS
BEGAN ACQUIRED
STARTED SELLING VOLCANO
MANUFACTURING TELEVISION LAUNCHED COMPACT CORPORATIO
VACCUUM TUBES. DISC. N
SETS.
Problem Solutions

 Philips was success since its inception,  Philips embarked an improvement

but its faced poor financial program called BEST (Business
performance during the 1990s due to Excellent through Speed and
several reason: Teamwork).
 Have several tools and approaches as a
• Fall of market share. part of BEST.
• High Manufacturing Costs.
 Some of them are:
• Lack of competitive product price
• Philips Business Excellence Model
(PBE)
• Growing competition and Rapid
changes in the external environment
• Process Survey Tools(PST)
• Balanced Scorecard (BSC).
PROCESS SURVEY TOOL
BALANCED SCORECARD
STRATEGY OF PHILIPS

• In 1970-80 Philips acquired Magnavox, Signetics, Sylvania,&

Westinghouse

• In 1990 Philips carried out major restructuring program &

changed from localized production to global production

• Another important change was the appointment of Gerad

Kleisterlee as President & Chairman of the company

• Philips started to concentrate on its initial core activities

CONTD.

• Philips primary focus was now on product innovation

• To create brand awareness in European market Philips spent $100

million on advertisement, sponsorship, movie tie-ins, reail promotion

worldwide

• Apart from it Philips spent $600 million to buy Aegis Group’s

Carat International to create a consistent brand experience

• Philips also tried direct marketing and internet marketing to reach to

its consumers
CONTD.

• Philips started ‘Borderless Brand Management’ in 2004

• After 2005 Philips started focussing more on consumer with brand

promise of ‘sense and simplicity’

• As a part of TOP initiative, Philips also began a range of new

technology. One such technology is ‘Connected Home’

• At present Philips is planning to put digital at the core of its newly

merged consumer & healthcare business

 …cont’d

RETAIL AUTO INDUSTRY

Emerging Philips Requires better
urbanization , offers best- illumination
population in-class for
growth and lightning performance
new demand. solutions in Reduces
OEM & operating
OES
cost
e.g.
Hyundai
HEALTH CARE & PERSONAL CARE SOLUTIONS

PERSONAL
HEALTHCAR CARE
E

Supports hospitals and Market leader in male

diagnostic centre grooming equipments
medical equipments Personal care product is
providers for experience introduce in Tier 1 &
of care Tier2 cities

Anesthesia Trimmers
Cardiology Razors
Critical care Wet & Dry electric shaver
Home Steam Iron
respiratory Hair dryer & straightner
care
COMPETITOR

Matsushita
40%

Sony
10%

Hitachi

Thomson
CASE STUDY
Q:1 Use the standardization versus adaptation arguments to support
Philips strategies worldwide. What are some of its advantages of its new
standardization strategy?
Standardization and international uniformity has many advantages.

 People can expect the same level of quality of any specific

brand anywhere around the world.
 Standardization supports positive consumer perceptions of a product .If a
company enjoys strong brand identity and a strong reputation, choosing
a standardized approach might work to its benefit.
 Positive word-of-mouth means an increase in sales around the globe.
 It also includes cost reduction that gives economies of scale. Selling
large quantities of the same, non-adapted product and buying
components in bulk can reduce the cost-per-unit.
 Other advantages related to economies of scale include improved
research and development, marketing operational costs, and lower
costs of investment.
 Standardization is a reasonable strategy at a time where trade barriers
are
coming down.
 Following a standardized approach helps companies aim focus on a
uniformed marketing mix specifically focusing on one single
product, leaving enough room for quality improvement
Q:2 Offers suggestions to Philips regarding the strategies that it can use to create a
unified, resonant global brand?
Q:3 SOME MAY ARGUE THAT PHILIPS IS A PAN-EUROPEAN BRAND THAT IS TRYING TO
MAKE INROADS INTO THE US. CRITICALLY EVALUATE THIS STATEMENT?

 Philips make $100 million dollar in advertising ,sponsorships movie tie-

ins and retail promotions worldwide to boost brand awareness. Philips
embarked its star campaign in an attempt to create a more human,
imaginative and seductive brand image. Using dynamic state of the arts
product, the Philips campaign was able to reach consumers on a very
personal manner, thus gaining their trust, loyalty and brand preference.
The campaign resonated very well with its target market, well educated
,independent and carefree consumers.

 It has its five years sponsorship of the U.S. soccer Federation. This help
Philips to reach its young target and more female consumers. Philips thus
has 30 second air spots on ABC and ESPN during soccer broadcasts, as
well as presence on the stadium billboards, and logo visibility on all
training kits and Philips branded goal cameras are highly visible.