Philips Case Study: Swot & Pestle Analysis of Philips

Philips Case Study

Introduction

The company which is commonly known as Philips in the contemporary time is name as Koninklijke Philips N.V. which can be literally translated as Royal Philips in literal sense of the term. Philips is a multinational corporation which had been set up in the year 1997 at Eindhoven with it headquarter being in Amsterdam. Formerly the company had been one of the largest companies in the global marketing assignment help operating with electronics whose current focus is on health technology with diversifying business assignment help. The company leverages on advanced usage of technology and bring into use insights from the consumers and clinical expertise in order to develop integrated solutions. The company has been leading in the imaging diagnostics, therapy that has been guided by image, monitoring of the patients and informatics in real life.

Background

Through a meaningful innovation, the concern of the organization had been towards improving the health of the people in a meaningful manner and innovation. By 2030 the concern of Philips is dedicated towards improving the lives of about 2.5 billion people.

In the fourth Quarter of the year 2020 a sale of about 6.0 billion Euro had been delivered by the company which is comparable to the 7% growth in the sales. There had been an increase in the intake of the orders by a percentage of 7. There has been an increase in the EBITA margin by 19% of the sales as compared to the 17.9% which had been calculated in the year 2019. There had been improvement in the income from operation improved to the EUR 795 million as compared to the 730 million euro of the 2019. There has been an improvement in the cash flow to about 1305 million as compared to the 1271 million as collected from the quarter four of the year 2019. There had been a comparative improvement in the cash to an amount of 1055 million EUR as compared to the one collected in 2019 of EUR 959 million (Gumbus and Lyons 2002).

Internal Environment SWOT analysis

Strength

Philips accounts for a strong market position in terms of all the segments. The presence of Phillip is in diversified segments which incudes lighting, consumer lifestyles and healthcare. The diversified presence in its market has resulted in making Philips one of the leading global brand ranking between the top 100. It has a strong position in the market across all its segments. This in turn has provided Philips with greater bargaining power and a wider base of customers.

The increase of revenue in its inorganic growth had been the second source off strength for the organization. The business of Philips had seen its expansion through acquisition for the past few years. Acquisition of Wellcentive and Blue Jay Consultancy are notable among them. Such opportunities created new streams of revenues for Philips while providing them with opportunities for the future.

The strong focus of the organization on the research and development has also contributed in its strength. The organization has its research and development centres spread over Asia pacific, North America and Latin America. The benefit which had been experienced by the organization rapidly is the result of its investment on research and development which in turn has allowed the organization in coming up with solutions that are innovative as per all of its segments are concerned (Kommeren and Parviainen 2007).

Weakness

In recent times the organization had to recall certain number of its products. One of such products is the Halogen bulbs due to the concern of the products for safety. Such there had been an affect on the brand image which also caused financial concerns for the firm as well.

Legal cases that had been issued against Philips had been another source of weakness where about 50 action suits had been filed against the company in current years. Most of these cases are still under investigation. These issues play a great role when it is about affecting the image of the brand.

Opportunities

Growth in E commerce is one of the opportunistic areas that has evolved in the context of Philips. The emergence of online retailing and the trading across the international borders has evolved in the global world. With its operation diversifying in its online stores there has been a expectance to experience an increase in its sales through the online portals that they have been operating through.

There has been a growth health care market of IT. The growth of the IT based health care market had been brought about by the advancement in the technology like the usages of mobile based applications. By the year 2020 there had been expectation on this market to grow by a CAGR of six percentage. With the effective positioning of Philips in the healthcare market such a growth is most likely to benefit the organization.

There had been a stark growth in the market of male grooming. Philips has a wide range of male grooming products that is likely to add on to its product and cater to the growing demand of male grooming. The growth had been expected to reach a CAGR of about 8% till the year 2019.

Threats

Competitive environment in case of the business is an area of threat for Philips. Philips requires to compete with other MNCs operating in the global market. Major competitors of Philips include the players like Samsung, Sony and LG and others. The greater amount of competition limits the market share of Philips.

Rising labour cost and the increase in the counterfeit goods are dominating the market and thereby emerging as a source of threats for Philips in its operation (Lint and Pennings 2001).

External Environment- PESTLE analysis

Political	As an MNC Philips operates in about 60 countries with a count of employees of about 105000. The diversified portfolio of Philips included wide range of consumer electronics, domestic electronics ranging from professional to personal health care products The trade war that had been going on between US and China had a negative impact on Philips.
Economical	The opportunity for Philips’s growth had been boosted by promotion that has been made by Government for increasing the usage of LED Lights The world economy had been slowed down due to the trade war that had been going on between China and US specially the case of China which had been hit hard resulting in a decrease in the consumption of goods as well as in the demand for the products of Philips which also experienced a decline.
Social	Change in the mindset of the people is an important social factor. The concern of the people regarding the environment had been on an increase. There has been a shift rom the convention bulbs towards LED lights. The shift in the customer preferences has led Philips to innovate on a regular basis and introduce products that are new in their range
Technological	As per technology is concerned Philips as a company works with the advancement in the technology. The main concern of Philips is towards developing customer satisfaction by providing them with products that are new and unique. The tagline is suggestive of the concern of the company for innovation reading out as ‘innovation and you’
Legal	As the company has been operating in more than one country, the organization requires to abide by the rules of the country they had been operating in. The company has been subjected to legal issues in the sector of healthcare where it had been accused for mishandling about 3623 complaints Though the problem did not create any serious harm it had the potentiality of doing so. It had been subjected to case against NOVA for the infringement of Copyright as per its series of advanced beard trimer is considered
Environmental	With the increasing awareness in people in regard to the climate change it is the responsibility of the companies to produce products that are sustainable and friendly to the environment By the year 2020 the company had targeted to reach the 100% usage of sustainable and energy efficient source of energy in its operation. The aim of the company had also been directed towards going gender neutral by 2020. Out of 100, 65 of its manufacturing sites damped zero waste in the landfill In order to reduce the impact of kerosene on environment the organization had developed a combination of LED and solar light in order to reduce the impact of the same on environment. (Verspagen 1999)

Recommendation

It can be recommended following this course of discussion that the organization need to carry forth its innovation and bring about in its concern its compliance towards legal aspects of the countries where they had been operating. The concern of Philips should be towards developing its products and services in accordance to the changes in the preference of the customers.

Conclusion

In order to conclude it can be stated that the company had been playing a leading role among the players in the markets operating on electronics and healthcare sector. However, the concern of the organization lacked to a considerable extent in terms of its legal compliance where a more devoted effort is required.

References

Gumbus, A. and Lyons, B., 2002. The balanced scorecard at Philips Electronics. Strategic Finance, 84(5), p.45.

Kommeren, R. and Parviainen, P., 2007. Philips experiences in global distributed software development. Empirical Software Engineering, 12(6), pp.647-660.

Lint, O. and Pennings, E., 2001. An option approach to the new product development process: a case study help at Philips Electronics. R&d Management, 31(2), pp.163-172.

Verspagen, B., 1999. Large firms and knowledge flows in the Dutch R&D system: a case study of Philips Electronics. Technology Analysis & Strategic Management, 11(2), pp.211-233.