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Case study on philips by Mudasir ali
1. PHILIPS
• Established in 1891
• One of the world’s largest electronic companies
• 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
2. Our Business
A market leader in:
Medical Diagnostic imaging
Patient monitoring systems
Energy efficient lighting solutions and life style solutions
3. Problems or Challenge's Faced by Philips
Between 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
4. 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.
5. Philips has been at the forefront of electronic innovation since 1891, registering
some 65,000 patents and has been responsible for many of this century’s
greatest, most useful products:
o Electric shaver
o Audio Cassette
o Video Cassette Recorder
o Compact disc
o Energy Saving lamps
6. Analysis of the Case
• In 1990 Philips carried out a major re-structuring programme 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.
7. Three steps were taken:
1. Restructuring and Cost Cutting
2. Creating a movement for change_ the “CENTURION” programme
3. 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
8. 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 live’s.They started a new Global communication strategy.
9. Communication Strategy
In 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.
10. Continue…..
• 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.
11. Sense and Simplicity
• Now 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 parameters
1. Products are designed around the customer
2. They are easy to experience
3. They are advanced
12. 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”.