Phillips Electronics

In no more than 500 words, briefly analyse the case – Phillips Electronics (5 marks)

Phillips was founded in Eindhoven, Holland in 1891 as a family run business. It started by Frederick Phillips and his son Gerard Phillips and four years later, Anton Phillips joined the company.

Philips built its success on a worldwide portfolio of highly autonomous national organizations and focused on two main areas of conducting its business, that is, commercial strategy and technical research.

Technology was the backbone of the family business; therefore product innovation was driven solely on technology and this was used to market its products.

Over the years, Philips Electronics operations remained centralized in Eindhoven, and although competition started to rise it failed to decentralize its operations. This resulted in the slumping of the company’s stock value and revealed that its approach to the market had to be changed in order to remain relevant and profitable.

Although there was need for a new market approach, Phillips culture suggests that they were attached to their old routines and opted to stay solely in their preferred area or region, however other companies were infiltrating their market such as the Japanese who understood the importance of teamwork and market approach. Additionally, the customer loyalty that Phillips once had was been loosened, as they did not see the need to explore other markets neither to satisfy its consumers demand. Rather, they were bent on delivering their core business acumen of having their products technologically driven.

It was also noticeable that Philips Electronics is an organization that was very complacent and arrogant, as it failed to react to the demands of its external environment. Although Phillips was considered to be the world’s foremost designer and manufacturer of high quality, innovative consumer electronics, components, information and lighting products, their customer base started to dwindle, as...