Philips Strategy and Structure

Topics: Organization, Business, Management Pages: 53 (1637 words) Published: October 14, 2012
Emelie Gustafsson Jacek Nagórski Katherine Nunes Johan Sandström Michael Steiner

Internationalization Strategy and Organizational Structure
Corporate
 Strategy
 Philips
 case
  1
 

Questions!
•  What
 were
 Philips
 Interna8onaliza8on
 strategies
 over
  the
 decades
 (especially
 pre-­‐
 and
 post-­‐1960s)?
 
 
 
•  Examine
 it's
 development
 over
 ,me
 
  •  Examine
 the
 Interna,onaliza,on
 strategy
 and
  organiza,onal
 structure
  •  Look
 for
 the
 reasoning
 and
 side-­‐effects
 

  •  What
 organiza,onal
 structure
 do
 you
 think
 would
 fit
  best
 Philips'
 strategy
 and
 product
 por?olio
 today?
  Propose
 one.
 
 
Corporate
 Strategy
 Philips
 case
 

2
 

Today’s Agenda
1.  BACKGROUND
  2.  INTERNATIONALIZATION
 STRATEGY
  3.  ORGANIZATIONAL
 STRUCTURE
  4.  REASONS
 AND
 SIDE
 EFFECTS
  5.  NEW
 ORGANIZATIONAL
 STRUCTURE
 

Corporate
 Strategy
 Philips
 case
 

3
 

1. BACKGROUND
Corporate
 Strategy
 Philips
 case
  4
 

Philips history in short
•  Founded
 1891
 in
 Eindhoven,
 Netherlands
  •  It
 all
 started
 with
 light
 bulbs
  •  Today
 ac8ve
 within
 3
 areas;
 Healthcare,
  Ligh8ng
 and
 Consumer
 lifestyle
 
  •  Moving
 from
 decentralized
 to
 centralized
 

Corporate
 Strategy
 Philips
 case
 

5
 

•  More
 decentralizing,
 par8ally
 due
  to
 impending
 war
  •  Build
 on
 strength
 of
 NO’s
 because
  of
 bombings
 in
 Holland
  •  NO/PD-­‐matrix
 structure
 

•  Closed
 inefficient
 plants,
 around
 38’
  layoffs,
 high
 compensa8on
 by
 law
  •  Focused
 more
 on
 core
 business
  •  PD’s
 more
 decision
 power
  •  Reduced
 mgmt.
 board
  •  R&D
 concentra8on
 

1892-­‐1930
 

1930-­‐1960
 

1960-­‐1982
 

1982-­‐1990
 

1990-­‐2001
 

•  •  •  • 

Founded;
 Eindhoven
  Started
 to
 export
  Broaden
 product
 line
  Decentralizing
 

•  Low-­‐wage
 electronics
  manufacturing
  •  Lot’s
 of
 innova8on
 but
  low
 market
 shares
  •  Yellow
 Booklet;
  disadvantage
 of
 PD/NO-­‐ matrix
  •  Concentra8ng
 products
 

•  100
 factories
 closed,
 68’
  layoffs
  •  Target
 to
 increase
 ROA
 from
  17
 to
 24
 %
  •  Elimina8ng
 the
 PD/NO-­‐matrix
  •  40
 %
 increase
 in
 adver8sing
  •  Performance
 goes
 up!
 
6
 

Corporate
 Strategy
 Philips
 case
 

2. INTERNALIZATION STRATEGY
Corporate
 Strategy
 Philips
 case
  7
 

Evolved from a national to a worldwide business strategy
High
 

Focus
 on
 low
 costs
 

Global
 

Transna8onal
 

Interna8onal
 
Low
 

 

Mul8na8onal
 

Low
 

Corporate
 Strategy
 Philips
 case
  Focus
 on
 local
 adap8on
 

High
 

8
 

Philips moved from Multinational to a Global/Transnational company Management
 Prac8ce
  Adapted
 management
  to
 local
 needs
  Manufacturing
 and
 Marke8ng
 
Differen8a8on
 to
 fit
 local
  foreign
 condi8ons
  Generic,
 undifferen8ated
  products
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Strategy Essay

    ...their skills within the strategic objectives of the organization. Bratton and Gold HRP is the process through which, based on the analysis of changing external and internal conditions, management defines the desired future state of human resources. A systems perspective of the HRP process: strategy formation-HR planning-implementation of HR action plans A processual perspective of the HRP process-strategy formation-hr planning-HR actions in a two way relationship Key features of SHRP: -a process -directed at meeting current and future needs -progresses through phases from forecasting to developing plans -monitoring and evaluating outcomes and feeding back the results -should be driven by strategic objectives and its purpose to achieve its fulfilment Limitations of HRP definitions: -provides no insight as to what it considers right people or right time -what is meant by term process -the strategic linkage failed to prove a two way relationship -planning refers to the outcomes of the forecasting process Turner, key elements of HRP: -strategic planning (strategy formation, environmental scanning, key business issues) -demand forecasting (what are hr implications on strategy, forecasting for future HR requirements to meet bis. Objectives) -auditing current HR capabilities (analyzing current labor resources, auditing internal labor supply) -supply forecasting (forecasting internal and external labor...

    Read More
    692 Words 5 Pages
  • Structure follows Strategy Essay

    ...For too long, structure has been viewed as something separate from strategy. Revising structures are often seen as ways to improve efficiency, promote teamwork, create synergy or reduce cost. Yes, restructuring can do all that and more. What has been less obvious is that structure and strategy are dependent on each other. You can create the most efficient, team oriented, synergistic structure possible and still end up in the same place you are or worse. The Connection between Strategy and Structure Structure is not simply an organization chart. Structure is all the people, positions, procedures, processes, culture, technology and related elements that comprise the organization. It defines how all the pieces, parts and processes work together (or don’t in some cases). This structure must be totally integrated with strategy for the organization to achieve its mission and goals. Structure supports strategy. If an organization changes its strategy, it must change its structure to support the new strategy. When it doesn’t, the structure acts like a bungee cord and pulls the organization back to its old strategy. Strategy follows structure. What the organization does defines the...

    Read More
    1167 Words 3 Pages
  • Essay on Firms Strategy and Structure

    ...Management and Strategy Essay Notes INDUSTRIAL ORGANIZATION, CORPORATE STRATEGY AND STRUCTURE  Top managers perceptions of the market structure and firms strengths and weaknesses determine their choice of corporate strategy and organisational structure  Both corporate strategy and organisational structure influence the economic performance of the firm and the market in which it sells  One of the main goals for strategy implementation is to achieve synergy between functions and business units (Hunger and Wheelen) Organisational Structure  Organisational Structure – arrangement whereby the firm motivates, co-ordinates, appraises, and rewards the inputs and sources that belong to its coalition  It is a process of choosing arrangements that maximise the value of the firms chosen strategy Other factors affecting organisational structure • Market processes surrounding the unit • Influence of competition • Uncertainty – relate to Chandler – The external environment is uncertain therefore companies are forced to change their structure to comply with the changing environment STRATEGY MAKING AND STRUCTURE: ANALYSIS AND IMPLICATIONS FOR PERFORMANCE (Danny Miller) • Organisational...

    Read More
    1338 Words 5 Pages
  • Strategy and Structure of Tata Motors Essay

    ...Introduction As we all know, strategy and structure is one of the most fundamental and significant part of an organization. Strategy and structure is come up by planning process during processes of management in organization, therefore, it is not possible to ignore how well an organization in determining its mission and goal, planning appropriate strategies and structures of organization and implementing these strategies. Strategy is the direct result of decision making and structure is the indirect result. Nevertheless, both strategy and structure is the result of decision making by managers through analyzing the organization and market, segmenting markets, selecting market, positioning themselves and using resources to implement the process. In this article, I will firstly) identify the mission and goals of Tata Motors, secondly) use SWOT analysis and the Five Forces Model to evaluate how well Tata Motors in strategy formulating and thirdly) evaluate the process of implementing these strategies. Company’s mission and structure Tata Motors is a multinational manufacturing company in Mumbai, India. It has operated firms in the UK, South Korea, Thailand and Spain, moreover, it also has expanded its operations since 1961 to other countries. The Mission of Tata Motors is...

    Read More
    1800 Words 6 Pages
  • Essay about Strategy or Structure

    ...“What comes first? Strategy or structure?” Strategy is a chosen direction that you want to take your company or organization. To establish direction, a strategy must be explained to others. Strategy determines what the key activities and factors are in a business. That is, in addition to establishing a course for the future, one must get others on board for the ride. Most people find that there is a clear definition of the mission or purpose makes possible clear and realistic business objectives and goals. It is the foundation for priorities, strategies, plans and work assignments so in a sense structure follows strategy. And strategy requires knowing what our business is and what it should be. What if your organization is working with a legacy structure? If you want to accomplish your mission you'll need to start there, formulate strategy to do what needs to be done…and then align structures to make the strategy happen. To more effectively evaluate the productivity of existing programs on an ongoing basis, and integrate this evaluation with enrollment planning and proposals to develop new academic programs, we recommend the development of a new academic planning structure. Our current process for developing new academic programs involves minimal academic planning; it is...

    Read More
    3398 Words 10 Pages
  • Market Structures and Relating Pricing Strategies Essay

    ...Market Structures and Relating Pricing Strategies Abstract This paper analysis’s the four categories of the market structure; perfect competition; monopolistic competition, oligopoly and monopoly marketing structures. It will also provide pricing strategies as they are specifically related to each market structure. Each market structure possesses it own unique pricing structure that every business follows to achieve its maximum profit. Some market structures pricing strategies are simple and straightforward while others can be complex. This paper exams how each market structure functions in the business world and how businesses set their pricing strategy. The case study also provides a real world example of a company’s pricing strategy for a monopoly structure. Market Structure controls the goods and set the price by which consumer will pay for a particular goods or service. The four main marketing structures are perfect competition, monopolistic competition, oligopoly and monopoly. The all possess the own unique characteristics as it plays a different role in the economy. But they are all dictated by the law of supply and demand. One of the main characteristics that all four...

    Read More
    2084 Words 6 Pages
  • Airline Industry: Pricing Structure and Strategies Essay

    ... Airline Industry: Pricing Structure and Strategies ABSTRACT The profitability of an airline industry depends on filling seats, and on the company’s ability successfully to anticipate the cost and price structures of their competitors. However, many airline carriers have a hard time accomplishing this because the average airline passenger just needs to travel from one destination to another in the most convenient and shortest amount of time at a reasonable price. Therefore, customers in this market are not as loyal to one specific airline (brand) in the industries. The reason for this is that airline carriers provide the same services at similar prices. In addition, the passenger will only incur high switching costs if they choose to take another mode of less desirable transportation. Airline carriers have overcome these problems by using the strategy of “Price discrimination.” That is a strategy that allows them adequately to segment their potential passengers, and to offer different pricing structures that match passengers’ sensitivity to price and value differences in cost to serve, and their different competitive positions (Stern, 1989). While it also allows passengers to maximize their “expected utility” when flying with the airline carrier that meets their needs. The 1978 deregulation of the airline industry has resulted in airline...

    Read More
    2098 Words 9 Pages
  • The Importance of Pricing Strategies in Market Structures Essay

    ...Running Head: THE IMPORTANCE OF PRICING STRAGETIES IN MARKET STRUCTURES THE IMPORTANCE OF PRICING STRAGETIES IN MARKET STRUCTURES Yvette Daniels American Public University Systems October 15, 2011 The importance of pricing strategies is different depending upon the type of market structure because each market structure has special components that affect the pricing schema and determination of output. Although the pricing strategies are different, it is highly important for a select market structure to choose the optimal pricing policy to insure that the firm is able to be successful and earn long-term profit. It also important to remember that pricing policies are subject to change considering that the business environment is ever changing as well; implementation is critical for a firm to remain stable within its industry and competitive. The importance of pricing strategies influence firms within its market structure to make the necessary adjustments to pricing depending upon the demand of it consumers, most importantly. According to Bobette Kyle (n.d.), “A higher or lower price can dramatically change both gross margins and sales volume” (para. 1). If a firm sets a price that is not appealing to the consumer then it has a higher chance of losing a sale or forcing a consumer to shop around for a substitute with a cheaper price tag....

    Read More
    2096 Words 6 Pages

Popular Essays

Become a StudyMode Member

Sign Up - It's Free