Radical innovation at Philips Lighting

Case Study Presentation:

Group Members:UsmanAdnanAmmarBilalSulman

•Philips Electronics, a Dutch multinational Corporation founded in 1891

•One of the world’s largest electronic company

•Started by Anton and Gerard Philips

•Employees a workforce of 116,000 around the world

•Philips manufactures more than 50,000 products across 100 countries

Our Business A market leader in: Medical Diagnostic imaging

Patient monitoring systems

Energy efficient lighting solutions and life style solutions

Problems or Challenge's Faced by PhilipsBetween 1930 and 1995 advertisement campaign were carried out at product level, local market basis.

Tough competition from Japanese electronic companies like Sony, Canon etc.

Closer down of its business units in defense and home appliances that were not directly related to its core business

Cut of market share of Philips

New products such as the Video 2000, a video system developed to compete with Betamax and VHS videos, failed because Philips had begun to lose touch with the market.

Financial crisis due to, losing focus by operating in too many industries and did not focus on marketing

Not allowing himself to represent as a global company.

New products such as the Video 2000, a video system developed to compete with Betamax and VHS videos, failed because Philips had begun to lose touch with the market.

Financial crisis due to, losing focus by operating in too many industries and did not focus on marketing

Not allowing himself to represent as a global company.

Continued…

Analysis of the CaseIn 1990 Philips carried out a major re-structuring program and changed from localized production to global production

In 1990 company faces financial crisis which triggered change of leadership

So they appointed Jan Timmer as Chairman, who embarked upon a reappraisal of the inefficient structure of the company.

Timmer called top 100 managers together for the first time.

He decided to set a benchmark of Philips against competitors.

Three steps were taken:1. Restructuring and Cost Cutting2. Creating a movement for change_ the “CENTURION” program3. Implementation change Philips primary focus was now on product innovation

All employees were asked to raise questions to express their opinions and make suggestions

At CENTURION meeting 1 task force were appointed to create

sweeping changes to company wide issues

Continue……..

CENTURION sessions were held for each business division. The session focused on reviewing the state of business and plan of action for that business.

Managers at other hand made a commitment to improve their performance.

In 1994 company net income rose to 964 million euro. Workforce was reduced by 52,000 to 238,000 employees.

Philips wanted to become a global brand and champion the idea that technology will improve peoples lives. They started a new Global communication strategy.

Communication StrategyIn 1995 Philips introduced "Lets Make Things Better” Campaign, Its new Global strategy“Let’s make things better” embrace a duality: a desire to make better things through innovations and products so that people will say “I want to buy that”.

Also a commitment of the entire Philips organization to continue to make things better and affect people’s lives positively.

Campaign was launched Globally in all markets and related the campaign to all its products

Campaign primary objective was to help Philips connect with people and campaign was successful.

Management team was concerned that campaign did not convey the design excellence or technical superiority of its products

Philips conducted a market research to study the perception of costumers. They result showed that customers can “rely on Philips”.

Company also discovered the core target group of Philips is educated aged between 35-55

Group dislikes the unnecessary hassle often created by new technology and valued simplicity efficiency in all fields

So Philips acted on this information by Re-Branding itself. So they launched a new campaign.

Continue…..

Sense and SimplicityNow emphasis shifted to the benefits of technology without hassle of understanding of technology

This strategy reflects what Philips does and market oriented nature of company.Campaign was based on three parameters1. Products are designed around the customer2. They are easy to experience3. They are advanced

Suggestions

Philips should study its competitors and potential customers.

Build a strong, consistent brand culture

Be borderless in your marketing.

They should have communicate the “point-of-difference”.