Philips Case Study

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Philips Introduction

Philips is a globally renowned electronics company that not only caters to the personal and individual needs of individuals but also contributes to the global healthcare situation through its state-of-art industrial healthcare devices. Despite the absence of dedicated and specific stores, the company mainly chooses to reach out to the target customer base through the means of retail stores dealing in its products as well as personally being in touch with healthcare establishments. In this study, the microeconomic and macroeconomic factors of Philips has been analysed through an extensive SWOT and PESTEL analysis respectively to get a better understanding of the environment the company operates within.

Company Background

Company Name

Philips

Type of Industry

Electronics

Headquarters

Amsterdam, Netherlands

Sales/Revenue

€18.121 billion 

Area Served

Worldwide

Competition

Siemens, LG, Samsung, GE, Braun.

USP

Expertise in electronic products ranging from both simple household and personal care and grooming to reliable medical equipment.

Target Group

Personal Care Products - Individuals with high and medium purchasing power residing in mainly urban areas

Healthcare Equipment - High-end and multi-speciality healthcare organisations

Products

Personal grooming products for men and women as well as high-end professional and institutional healthcare products

Website

www.philips.com

Table 2: Swot Analysis of Philips

(Source: Influenced by Muller, 2018)

Philips Swot Analysis

Strengths

The main strength available to Philips is the highly influential brand name and brand equity it has created in the electronics industry. As per the case study of Philips, it can be derived that through an expansive customer as well as employee base, catering to customers in almost every single country on the globe as well as being a source of employment to more than 80,000 individuals, Philips is a frontrunner in the electronic appliances industry (Philips.com, 2019). Additionally, the fact that it operates in multiple industries, including household appliances, personal care and grooming products as well as heavy-duty industrial-sized healthcare equipment, Philips has been able to successfully make its mark in the various different markets.

Weaknesses

The main weaknesses that have been identified in the case of Philips are the hugely unfavourable history of lawsuits that the company has been entangled in over the years as well as the comparatively higher price of its products as compared to other brands (Crainscleveland.com, 2018).

Opportunities

The major opportunity that has been presented to Philips is the constant development with regard to technology (Forbes.com, 2018). In accordance with the case study of Philips, it has been observed that through the vast potential available to Philips in the form of the new and developed technological inventions can be a huge opportunity to the company if it can successfully incorporate it into its products and make them more technologically advanced. This can be beneficial for Philips due to the fact that the contemporary world is becoming increasingly dependent on technologically advanced means.

Threats

According to the case study of Philips, the biggest threat presented to Philips is the high amount of competition present in the highly-competitive electronics industry. The fact that the various technological advancements available to Philips are also available to the other brands can act as a threat if competitors like LG, Samsung or GE Electronics make proper use of the technology at a faster pace than Philips. This threat tends to be exacerbated due to the presence of a vast amount of counterfeit goods that fake companies tend to sell under the brand name of Philips (Kiraz, 2019). As per the case study of Philips, the constantly changing customer preferences and priorities changing from being technologically savvy to being financially efficient can also pose to be a threat for Philips.

Philips Pestel Analysis

Factor Description
Political
  • Changes in government regulations of each country
  • National security and government regulations on implementation of technological advancements (Deloitte.com, 2019)
Economic
  • Decrease in the inflation rate of UK - 2.1% in December 2018 (Bbc.co.uk, 2019)
  • Rise in Consumer Prices Index - 2.0% in April 2019 (Ons.gov.uk, 2019)
Social
  • Huge diversity in the UK (Diversityuk.org, 2019)
  • Positive improvement in lifestyle factors of customer base.
Technological
  • Constantly upgrading R&D of Philips
  • New lighting and medical technologies, attracting more customers
Environmental
  • Corporate Social responsibility
  • Sustainable means of conducting business
Legal
  • Technology Code of Practice (Gov.uk, 2019)
  • Standards for Digital Health Technologies (Nice.org.uk, 2019)

Table 3: Pestel Analysis of Philips

(Source: Influenced by Shtal et al. 2018)

Philips Pestel Analysis

According to the case study of Philips, the external environmental factors of Philips include the various political, economic, social, technological, environmental and legal factors that can either hinder or act as enablers to the success of Philips.

Through an analysis of the case study of Philips, it can be derived that the main political factors that can hinder the global expansion and success of Philips is the fact that every country the company operates in has separate regulations regarding technological advancements. This would make it difficult for the company to successfully and properly conduct business in every country. According to the case study of Philips, the various national security and technology regulations implemented in the UK itself can act as a hindrance to the successful application of the new technological advancements to its products.

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Economic factors like the fall in inflation rate to 2.1% in December 2018 and the rise in Consumer Prices Index to 2.0% in April 2019 would imply that consumers have a greater purchasing power, which can ultimately benefit Philips in the UK market (Ons.gov.uk, 2019). According to the case study of Philips, various social factors like the huge diversity in the UK and changing lifestyle patterns and preferences of customers can also help in the sales of Philips products in the UK (Diversityuk.org, 2019).

The most influential impact can be considered to be in the form of various technological advancements that Philips can make use of to make its products more appealing, technologically advanced and increase its demand in the global market. Through the case study of Philips, it can be understood that it can be exacerbated through the fact that Philips tends to faithfully and properly fulfil its Corporate Social and sustainable responsibilities to the environment and society in general (Results.philips.com, 2019). However, the legal factors in the form of the Technology Code of Practice and the Standards for Digital Health Technologies can also act as either barriers or enablers to the ethical and successful implementation of technological advancements in its products.

Reference List

Bbc.co.uk (2019). Inflation falls to lowest level in nearly two years. Available at: https://www.bbc.co.uk/news/business-46889433 [Accessed on: 30 July, 2019]

Crainscleveland.com (2018). Philips mishandled thousands of complaints, FDA report says. Available at: https://www.crainscleveland.com/article/20180316/news/155246/fda-report-says-philips-healthcare-mishandled-thousands-complaints [Accessed on: 27 July, 2019]

Deloitte.com (2019). National security and technology regulation. Available at: https://www2.deloitte.com/insights/us/en/industry/public-sector/national-security-technology-regulation.html [Accessed on: 28 July, 2019]

Diversityuk.org (2019). Diversity in the UK. Available at: https://diversityuk.org/diversity-in-the-uk/ [Accessed on: 28 July, 2019]

Forbes.com (2018). Top 10 Digital Transformation Trends For 2019. Available at: https://www.forbes.com/sites/danielnewman/2018/09/11/top-10-digital-transformation-trends-for-2019/#747759403c30 [Accessed on: 30 July, 2019]

Gov.uk (2019). Technology Code of Practice. Available at: https://www.gov.uk/government/publications/technology-code-of-practice/technology-code-of-practice [Accessed on: 29 July, 2019]

Kiraz, S.E. (2019). Third Party’s Intellectual Property Rights And The Seller’s Liability Under The United Nations Convention On International Sale Of Goods (CISG) And The Sale Of Goods Act (SGA), 11(5), 1-9.

Muller, G. (2018). Business Strategy: Methods and Models, 19(4), pp.119-137.

Nice.org.uk (2019). Evidence Standards Framework For Digital Health Technologies. Available at: https://www.nice.org.uk/Media/Default/About/what-we-do/our-programmes/evidence-standards-framework/digital-evidence-standards-framework.pdf [Accessed on: 30 July, 2019]

Ons.gov.uk (2019). Consumer price inflation, UK: April 2019. Available at: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/april2019 [Accessed on: 29 July, 2019]

Philips.com (2019). Introduction - Company - About. Available at: https://www.philips.com/a-w/about/company/introduction.html [Accessed on: 27 July, 2019]

Philips.com (2019). Our Heritage - Company - About. Available at: https://www.philips.com/a-w/about/company/our-heritage.html [Accessed on: 26 July, 2019]

Results.philips.com (2019). Making the world healthier and more sustainable. Available at: https://www.results.philips.com/publications/ar18#/interactive-worldmap [Accessed on: 29 July, 2019]

Shtal, T.V., Buriak, M.M., Amirbekuly, Y., Ukubassova, G.S., Kaskin, T.T. and Toiboldinova, Z.G. (2018). Methods of analysis of the external environment of business activities. Revista Espacios, 39(12), pp.19-27.

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