Philips strives to make the world healthier and more sustainable through innovation.
No. of employees
Approx. 122,000 employees (2011)
22.6 billion euro sales (2011)
HQ in the Netherlands
This report contains study of major factors which affected Philips during the economic meltdown as well as in its competitive environment. The report also analyses how Gerard Kleisterlee, CEO of Philips who took over Philips in 2001 during the time when the company was making huge significant losses.
The case further analyses how Philips regained its brand value and market share under Gerard Kleisterlee leadership. Kleisterlee who admitted loss were due to flaws in organisation and economic conditions. This report shows how Kleisterlee opted to restructure the organisational strategies and revived Philips. Report also indicates in detail of the new strategy which was to promote a more cooperative approach than working on single division, which led to 'one Philips'. This report also indicates the improvements in Philips after implementing these new cultures and shows how these improvements were measured. In summary we analyses the leadership qualities of Philips applying each of the factors from Table 3.1 (fourth edition, 2009, or fifth edition, 2013) of the text Managing Innovation.
Effective partnering: Philips collaborates with municipalities, and corporations to develop joint livable city visions and sustainable business models. Already cities and villages over the globe scaled up to energy-efficient LED lighting solutions as result of effective public-private partnerships.
PROMOTING COLLABORATION:-The TTLF program also called for extensive collaboration among product division a big change from the pass when Philips was run as a set of disparate companies that acted independently. Strategy setting was identified as the area where collaboration was most needed.
In the pass era, Philips was run as a set of disparate businesses, where as long as you delivered your bottom line, no one cared about collaboration or group-level profitability. The traditional strategy-setting process was not appropriate for a multi-division company like Philips.
The traditional strategy process is a very linear. It’s not suited to looking at an issue that cuts across different divisions or operation within the company and identifying what’s needed in order to effect change or come to a common understanding. Kleisterlee introduced “strategic conversation” as a way of setting strategy. Commenting on the effectiveness of the “strategic conversation” process, Kleisterlee said, “These meetings result in a very clear goals and much better cooperation between the different divisions”.
FOCUS ON CUSTOMER: As part of its initiatives, Philips also began developing a range of new technologies using its traditional strength in a technology research. One such technology was known as “connected Home”.
Another technologies innovation that Philips introduced was the “Mirro TV” which has essentially an LCD display integrated into mirror. The product was an attempt to bring connectivity and convergence to homes. Getting closer to customers was another important objective of the Think the Lighting Future’ (TTLF) program.
The TTLF program focused on transforming Philips from being a technology-driven company to a market-driven company. As part of its strategy to get closer to its customers, Philips struck a deal with home Depot; a US based home improvement chain.
Under the deal, Home Depot, which sold 20% of all light bulbs in the US through its 1,400 stores, agreed to a sell only Philips lighting products. Philips also developed a strategy that focused its portfolio of products around the aspects of Health,…