PHILIPS PRAKASH

Type Public
Traded as Euronext: PHIA, NYSE: PHG

Industry Conglomerate

Founded 15 May 1993; 26 years ago

Eindhoven, Netherlands

Founders Gerard Philips

Koninklijke Philips N.V. (literally Royal
Anton Philips
Philips, stylized as PHILIPS) is a Dutch
multinational conglomerate corporation Headquarters Amsterdam, Netherlands

headquartered in Amsterdam, one of Area served Worldwide

the largest electronics companies in the Key people Jeroen van der Veer (Chairman)
world, currently focused in the area of Frans van Houten (CEO)
healthcare and lighting. It was founded
Abhijit Bhattacharya (CFO)
in Eindhoven in 1891 by Gerard Philips
Hugo Barbosa Vazquez (Vice
and his father Frederik, with their first President)
products being light bulbs.
Products Electronics

Lighting

Audio system

Medical equipment

Revenue €18.121 billion (2018)

Operating income €1.719 billion (2018)

Net income €1.097 billion (2018)

Total assets €26.019 billion (2018)

Total equity €12.088 billion (2018)

Number of employees 77,400 (2018)

 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.
 Gerard Leonard Frederik Philips (9
October 1858 – 26 January 1942) was a
Dutch industrialist and co-founder, with his
father Frederik Philips, of Philips as a family
business in 1891. In 1912, Gerard and his
younger brother Anton Philips converted the
business to a corporation by founding NV
Philips' Gloeilampenfabrieken.
“ At Philips, we are
striving to make the
world healthier and
more sustainable
through innovation,
with the goal of
improving the lives of 3
billion people a year by
”
2025.

VISION - MISSION
Philips Internationally early 19th
century

1907 1920s 1939

Philips Metal In 1920s,Philips In 1939 they
Filament Lamp started to diversify introduced their
Factory Ltd. was its product range. electric razor, the
founded in Philishave.
Eindhoven in 1907.

That was followed In the 1920s, the

in 1912 by the company started to In 1949, the
foundation of Philips manufacture other company began
Lightbulb Factories products, such as selling television
Ltd. vacuum tubes. sets.

1912 1920s 1949

What made Philips

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

1930 1970 2008

Philips began operations
in India in 1930 with the
establishment of Philips
Electrical Co. (India) Pvt
Ltd in Kolkata .
In 1970 a new consumer In 2008, Philips India
electronics factory entered the water
began operations in purifier market.
Pimpri near Pune; the
factory was closed in
2006.

In 2014, Philip's was

In 1948, Philips started
manufacturing radios in
Kolkata. In 1959, a second
radio factory was
established near Pune.
In 1996, the Philips
Software Centre was
established in Bangalore,
later renamed the Philips
Innovation Campus.
ranked 12th among
India's most trusted
brands according to the
Brand Trust Report, a
study conducted by Trust
Research Advisory.

1948 1996 2014

 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

REVENUE 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 was success since its
inception, but its faced poor
financial performance during the
1990s due to several reason:
 Fall of market share.

PROBLEMS  High Manufacturing Costs.

 Lack of competitive product price
 Growing competition and Rapid
changes in the external
environment
SOLUTIONS

Philips embarked an improvement

program called BEST (Business
Excellent through Speed and
Teamwork).

Have several tools and approaches Philips Business Excellence

as a part of BEST. Model(PBE)

Some of them are Process Survey Tools(PST)

Balanced Scorecard (BSC)

  At the launch of ‘Philips Business
Excellence’ (PBE) it has been decided
that all organizational units had to apply
the PBE Model and had to implement
‘Philips yearly PBE self- and peer assessments.
This included also all Corporate Staff
Business Departments and the Board of
Management Office. This was a strong
Excellence’ message to all managers in Philips : PBE
is a ‘must’ and is the Philips ‘Business
Model’ and ‘Company Standard’ for
assessing approaches, improvements and
business results.
  To have a benchmark for World-
Class Process Performance,
‘Process process experts from Philips
and other global Companies
have developed the so called
Survey ‘Process Survey Tools’ (PST’s).
PST’s have been described for
Tools’ all key processes like Marketing
& Sales, Product Development,
Purchasing, Manufacturing,
(PST’s) Supply Chain Management,
Finance- and Human Resource
Management..
“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
  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, retail
promotion worldwide

Strategy of  Apart from its Philips spent

$600 million to buyAegis
Philips Group’s Carat International
to create a consistent brand
experience
 Philips also tried direct
marketing and internet
marketing to reach to its
consumers
  Philips started ‘Borderless Brand
Management’ in 2004
 After 2005 Philips started focusing
more on consumer with brand
promise of ‘sense and simplicity’

 As a part of TOP initiative, Philips

also began a range of new
Strategy of
technology. One such technology is
Philips

‘Connected Home’

 At present Philips is planning to put

digital at the core of its newly

 merged consumer & healthcare

business
CASE STUDY
Question:

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 .Ifa 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

Answer 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
Question:

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
Answer 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.
Thank You