PHILIPS CASE STUDY
Founded Eindhoven, 15 May 1891
Founder Gerard Philips
Headquarters Amsterdam, Netherlands
Area served Worldwide
Key people Jeroen van der Veer(Chairman)
Frans van Houten (CEO)
Products Home appliances
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"
sense and simplicity
Philips Consumer Electronics
Philips Medical Systems
Philips Domestic Appliances and Personal
• 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
• Market leader---cardiac care,
acute care and home healthcare,
energy efficient lighting
solutions and new lighting
• 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
Philips Headquarters in
(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
In the 1920s, the company started to
manufacture other products, such as vacuum
In 1939 they introduced their electric razor, the
In 1949, the company began selling television
1990 TO 2015
In may 1990 when company
posted losses of $2.6 billion,top
management launched a major
initiative known as”Operation
In 1999,Philips embarked on a
worldwide marketing campaign
and changed their company’s
image to a technology-oriented
company rather than a market –
In 2001,Philips launched a
company wide restructuring
program called “Towards One
Philips’(TOP) under CEO
Gerard Kleisterlee to foster
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
In March 2012 Philips
announced its intention to sell,
or demerge its television
to TPV Technology.
April 2013, Philips announced a
collaboration with Paradox
Engineering for the realization
and implementation of a “pilot
project” on network-connected
solutions. This project was
endorsed by the San Francisco
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
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 Advisory.
PHILIPS INDIA OPERATIONS
• 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.
GROWTH OVER THE YEARS
1891 1912 1920 1939 1949 1963 1982 2000 2011 2015
Philips embarked an improvement
program called BEST (Business
Excellent through Speed and
Have several tools and approaches as a
part of BEST.
Some of them are:
• Philips Business Excellence Model
• Process Survey Tools(PST)
• Balanced Scorecard (BSC).
Philips was success since its inception,
but its faced poor financial
performance during the 1990s due to
• Fall of market share.
• High Manufacturing Costs.
• Lack of competitive product price
• Growing competition and Rapid
changes in the external environment
STRATEGY OF PHILIPS
• In 1970-80 Philips acquired Magnavox, Signetics, Sylvania,&
• 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, 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
• 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
OEM & OES
Supports hospitals and
providers for experience
Home respiratory care
Market leader in male
Personal care product is
introduce in Tier 1 &
Wet & Dry electric shaver
Hair dryer & straightner
HEALTH CARE & PERSONAL CARE SOLUTIONS
Q:1 Use the standardization versus adaptation arguments to support Philips
strategies worldwide. What are some of its advantages of its new
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
Standardization is a reasonable strategy at a time where trade barriers are
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.