Philips Maps Out A New Direction - Case Analysis

SEQ CHAPTER \h 1Philips Maps Out a New DirectionCase AnalysisPhilips , the electronics churchman , has developed a plan to summation lucre , shareowner value , and market blank spaceing by 2010 . The first timber in the process is CEO Gerard Kleisterlee . Upon taking the top plazaing , Kleisterlee was able to affect an immediate 4 rise in share prices by simply announcing the market make every(prenominal) over plan . He believes that a heighten on innovating and commemorate will be the key to the plan s br success . The strategies that Kleisterlee is employing are consolidating six direct build blocks into troika , getting exchangeable or enhancing engineering science companies , and entering into uphill marketsThe six breathing units will merge into three partitions , Consumer life-style , Philips Hea lthcare , and Philips lighting . Each division will be run by a CEO recruited from within the otherwise existing Philips operating units . The rationale for the consolidations is to `save on logistic and back-office costs and to increase tax incomes by 5-6 for each unit . Philips will also subscribe existing technology companies that fill out with a specific technology , most likely incorporating those acquisitions into unitary of the three divisions . Philips is also not bad(p) emerging consumer markets like chinaware to build reproach light and create a consecrated market baseStrategic Issues : Problems and OpportunitiesPhilips has some publicise to overcome , particularly intimidate or brand fruition , and stagnate honorarium and profits . As stated the name Philips is associated with laxatives and tools . The parent lodge royal Philips Electronics produces a wide wave of products from light bulbs , to electric shavers , habitation medical devices , and semiconductors Even though stock prices ros! e promptly when Kleisterlee took over , sales and earnings have not change magnitude signifi cornerst mavintly . Kleisterlee s death of change magnitude pre-tax margins by 10 will require an increase in sales along with the slump in operating expenses which is the goal of consolidating operating unitsAccording to the case battleground , Philips has no debt on their relief sheet .

This financial position is a great investing fortune . As note , it makes cash available for acquisitions of other technology companies whose operations tail provide immediate revenue growth to Philips bottom retrace . Secon d , it allows Philips to invest trade dollars into the newly created divisions and into emerging markets creating the want after name and brand recognitionAnalysis and EvaluationPhilips as a substantial has enhanced its rankings in cardinal areas as brand rankings , brand value , and innovations . Consolidated and extremely targeted operating divisions allow Philips to focus on marketing three different product lines in the same market . Philips has an chance to saturate any one or all of three unique markets . Operating as individual units allows each division to operate as an freelancer company with independent marketing strategies . However , by building on the parent company s brand name , royal Philips Electronics , each division can enhance their market positions by taking on the character that has been developedThe challenge for Phillips , and the continuing opportunity , is to try maintain a virtually...If you want to get a full essay, order it on our website: OrderCustomPap! er.com

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