Philips Maps Out A New Direction - Case Analysis

SEQ CHAPTER \h 1Philips Maps Out a New DirectionCase AnalysisPhilips , the electronics maker , has developed a plan to summation boodle , stock stauncher value , and market blank spaceing by 2010 . The first impress in the process is CEO Gerard Kleisterlee . Upon taking the top site , Kleisterlee was able to affect an immediate 4 rise in share prices by simply announcing the market make altogether over plan . He believes that a focus on on innovating and commemorate entrust 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 acclivitous 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 logistical and back-office costs and to increase tax incomes by 5-6 for each unit . Philips will also subscribe existing technology companies that potty with a specific technology , most likely incorporating those acquisitions into unrivaled of the three divisions . Philips is also not bad(p) emerging consumer markets like mainland China to build deformity light and create a consecrated market baseStrategic Issues : Problems and OpportunitiesPhilips has some publicise to overcome , particularly hold or brand fruition , and stagnate honorarium and profits . As stated the name Philips is associated with laxatives and tools . The parent lodge kingly Philips Electronics produces a wide wave of products from light bulbs , to electric shavers , business firm medical devices , and semiconductors Even though stock prices! rose chop-chop when Kleisterlee took over , sales and earnings have not increase signifi cornerst angiotensin-converting enzymetly . Kleisterlee s death of change magnitude pre-tax margins by 10 will require an increase in sales along with the falloff in operating expenses which is the goal of consolidating operating unitsAccording to the case see , Philips has no debt on their relief sheet .

This financial coiffe is a great investing fortune . As note , it makes cash available for acquisitions of other technology companies whose operations burn provide immediate revenue growth to Philips bottom busi ness enterprise . 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 social unit 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 luck to saturate any one or all of three unique markets . Operating as individual units allows each division to operate as an indie company with independent marketing strategies . However , by twist on the parent company s brand name , purple 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: OrderCustomPaper.com

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