PHILIPS CASE STUDY

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PHILIPS

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sense and simplicity

DIVISIONS
 Philips Consumer Electronics
 Philips Lighting
 Philips Medical Systems
 Philips Domestic Appliances and Personal Care
 B2B

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INDUSTRY ELECTRONICS
Founded Eindhoven, 15 May 1891
Founder Gerard Philips
Frederik Philips
Headquarters Amsterdam, Netherlands

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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 €30.97 billion (2014)
Total equity €10.86 billion (2014)
Number of employees 116,000 (2014)
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Slogan "Innovation & You"
Website www.philips.com/global/
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 (1910 to 1950s)
 Philips Metal Filament Lamp Factory Ltd. was
founded  in Eindhoven in 1907.
That was followed in 1912 by the foundation of

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
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.
Vacuum Tubes.
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 1990 TO 2015
 In may 1990 when company  In January 2011 Philips agreed to
posted losses of $2.6 billion,top acquire the assets of Preethi, a

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management launched a major leading India-based kitchen
initiative known as”Operation appliances company.
Centurion”.  In March 2012 Philips announced
 In 1999,Philips embarked on a its intention to sell, or demerge its
worldwide marketing campaign television manufacturing
and changed their company’s operations to TPV Technology.
image to a technology-oriented  April 2013, Philips announced a
company rather than a market –
oriented one.
collaboration with Paradox
Engineering for the realization
 In 2001,Philips launched a and implementation of a “pilot
company wide restructuring project” on network-connected
program called “Towards One
street-lighting management
Philips’(TOP) under CEO
solutions. This project was
Gerard Kleisterlee to foster
endorsed by the San Francisco
greater co-operation.
Public Utilities 8
 The program helped not only in Commission (SFPUC).
lowering costs but also promoted a
spirit of collaboration.
 TARGET APPLICATIONS IN THE PROFESSIONAL
MARKET ARE DECORATIVE OUTDOOR AND
SHOP LIGHTING…

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 ..creating new lighting possibilities

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CASE STUDY

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 REVENUE

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• 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.

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 PHILIPS
GROWTH OVER THE YEARS
PHILIPS
INTRODUCED
BOUGHT
PHILIPS THE

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OPTIVA ACQUIRED
WAS COMPACT
CORPORATION THE ASSETS
FOUNDED. PHILIPS AUDIO OF PREETHI.-
LIGHTBULB CASSETTE INDIA BASED
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.
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Problem Solutions

 Philips was successful since its  Philips embarked an improvement

inception, 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).

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STRATEGY OF PHILIPS

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 …cont’d

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

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PERSONAL
HEALTHCARE CARE

Market leader in male

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

Anesthesia Trimmers
Cardiology Razors
Critical care Wet & Dry electric shaver
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Home respiratory care Steam Iron
Radiology Hair dryer & straightner
 Questions
raised at the
end of mini
case
 Q.1 Evaluate Philips "sense and simplicity" strategy. What are the risks the
company faces in using the tagline?

Strategy – Risks –

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Philips sense and simplicity 1) They would compromise on the

strategy was based around a advancement in technology in order

marketing insight they obtained to make things simpler.

from a market research on their 2) They would give the impression of

consumer segment. Philips a less advanced electronics

wanted to make the technology manufacturer, because of it's simple

hassle free and easy to access. design and features.

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 Q2. What strategies can Philips follow to ward off competition from
Japanese manufactures of consumers electronics?

if Philips were to emphasize

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adherence to
The major advantage that quality, simplicity of design, the
Japanese manufacturers have multi-lingual instructional manuals,
and the sense that
over Philips their products provide more value for
is their ability to keep their money, they would have an
advantage. The ‘Sense
prices lower. and Simplicity’ campaign is all well
and good, but Philips should take
care to ensure that
advertisements are designed in such a
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understand the
products in exactly what the company
wants them to.
Summary
BMW’s
Logo
 Thank you
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 Created by Kouts Kumar, IET Lucknow,
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during a marketing internship under Prof.
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Sameer Mathur, IIM Lucknow. 24