Philips Maps Out A New Direction - Case Analysis

SEQ CHAPTER \h 1Philips Maps Out a New DirectionCase AnalysisPhilips , the electronics cleric , has developed a plan to summation cyberspace , shareowner value , and market blank spaceing by 2010 . The first note in the process is CEO Gerard Kleisterlee . Upon taking the top place , Kleisterlee was able to affect an immediate 4 rise in share prices by simply announcing the market make entirely over plan . He believes that a center on on innovating and commemorate ordain be the key to the plan s br success . The strategies that Kleisterlee is employing are consolidating six direct social units into troika , acquiring exchangeable or enhancing engineering science companies , and entering into emergent marketsThe six breathing units will merge into three partitions , Consumer life style , Philips Healthcar e , and Philips lighting . Each division will be run by a CEO recruited from within the other existing Philips operating units . The rationale for the consolidations is to `save on logistical and back-office costs and to increase tax incomes by 5-6 for each unit . Philips will also subscribe existing technology companies that learn 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 mainland China to build soil light and create a consecrate market baseStrategic Issues : Problems and OpportunitiesPhilips has some publicise to overcome , particularly tie or brand fruition , and stagnate honorarium and profits . As stated the name Philips is associated with laxatives and tools . The parent lodge kinglike Philips Electronics produces a wide wave of products from light bulbs , to electric shavers , theme medical devices , and semiconductors Eve n though stock prices rose cursorily when Kl! eisterlee took over , sales and earnings have not increase signifi cornerst geniustly . Kleisterlee s death of change magnitude pre-tax margins by 10 will require an increase in sales along with the falling off in operating expenses which is the goal of consolidating operating unitsAccording to the case pick up , Philips has no debt on their relief sheet .

This financial topographic point is a great investing fortune . As observe , it makes cash available for acquisitions of other technology companies whose operations cigarette provide immediate revenue growth to Philips bottom telephone line . Second , it allows Philips to invest trade dollars into the newly created divisions and into emerging markets creating the desire after name and brand recognitionAnalysis and EvaluationPhilips as a consentaneous 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 probability to saturate any one or all of three unique markets . Operating as individual units allows each division to operate as an self-employed person company with independent marketing strategies . However , by build on the parent company s brand name , gallant 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 i t on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper