“Innovation and you”

The company provides a rich and diverse

portfolio to its customers to choose

from.

Founding Fathers

Gerad Philips

Frederik Philips

Mission and Vision

Mission“Improve the

quality of people’s lives through timely introduction of meaningful innovations.”

Vision“In a world where complexity increasingly touches every aspect of our daily lives, we will lead in bringing sense and simplicity to people.”

History:- Now and then Founded in 1891. The first product manufactured by it were

the carbon filaments. Manufactures more than 50,000 products. Currently employs around 1,22,000 people. The company has aligned itself as a health

and well-being company. For years, the company has innovating and introducing newer products into the market.

Target sectors

The company operates in following 3 categories:-

1.Healthcare2.Lighting3.Consumer lifestyle

Philips in healthcare

The company has been consistently ranked high in the healthcare sector.

The company provides products in sectors such as cardiology oncology, orthopedics radiology etc. to name a few.

A belief that the company can make a difference by removing boundaries in healthcare with its innovative and affordable technology solutions.

Philips in healthcare continued… The company also organizes various

campaigns from time to time to create awareness about various diseases.

Breast Cancer awareness campaign organized in India

Philips in lighting

Philips lighting is a leading provider of solutions and applications for both professional and consumer markets.

With the new lighting technologies, such as LED Philips continues shaping the future with its new and ground breaking new lighting applications.

Philips and consumer lifestyle

The company’s consumer lifestyle portfolio is further divided into following sub-portfolios:

1.Healthy living space ex:- Water purifiers2.Home living ex:-LCD TV’s3.Personal care ex:-Grooming kits4.Interactive living category ex:-Go gear MP3

player

Philips and consumer lifestyle continued… The company intends to make consumer

lifestyle portfolio as its point of difference(POD). This will help the company in competing with its

various other competitors such as Samsung, LG etc.

The company aims to deliver deeper experiences in touch with the social and emotional needs of its customers in their homes: right from a cup of coffee in the morning , to a relaxing evening with an Aurea TV.

Problems the company faces

The company faces the following issues:-

1.The company faces stiff competition from its Japanese counterparts as they provide products at relatively lower prices.2.The company has its products in too many domains. As a result the company needs to run separate marketing campaigns for its varied product mix.This not only increases the company’s expenditure but also makes it difficult for the company to have an integrated brand image.

SolutionsFollowing are the solutions to the previously mentioned problems:-

1.The company can shut down its smaller inefficient units and instead have bigger automated plants. This will help the company on cutting down on its cost.2.The company has started sharing its R&D expenses with other large corporations to cut down on its own cost.

SWOT analysis

Strengths:1.Huge investments in R&D2.Highly innovative products3.Effective communication4.Strong brand equity5.Copyright patents (Philips is the world’s

largest patent applicant at the European Patent Office)

SWOT analysis

Weaknesses:1. Higher priced products2.Competitive leadership3. Weaker distribution networks than

competitors

SWOT analysis

Opportunities1.Increasing industrialization in developing

countries. The company can capture markets of such

countries.Ex:- Introduction of modular switches for its

Indian market.2.Higher demand for more energy efficient

lighting sources.

SWOT analysis

Threats:1.Competition2.Exchange rate fluctuations3.Lower cost competitors

Plausible answer to questions of the case study Question 1: Evaluate Philips “sense and

simplicity” strategy. What are the risks the company faces in using this tagline.

Answer 11. They would compromise on the advancement

of technology in order to stick to its tagline of “sense and simplicity”.

2. It would give an impression of technically less advanced products being made available in the market by the company.

3. Therefore the company has changed its slogan from “sense and simplicity” to “innovation and you.”

Question answers continued…

Question 2: What strategies can be used to compete with Japanese manufacturers.Answer 2:The biggest advantage which Japanese competitors have is a lower price tag.Philips can overcome it in the following manner:

The company should highlight its “ innovation and you” tagline. The company should be able to effectively communicate to the customers that even though their products are costlier, they are worth the extra amount to be paid because they are quite technically advanced. The customers should be convinced that the extra amount paid is worth the product they purchase.

Summary

Founding fathers History Mission and Vision Target sectors-healthcare , lighting and

consumer lifestyle Problems faced with solutions SWOT analysis Answers to the questions of case studies

Disclaimer

Created by Prasham Bhargava, VIT Pune during

a marketing internship under Prof. Mathur ,IIM Lucknow.