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Philips Maps Out a New Direction'

Prepare a case analysis of 'Philips Maps Out a New Direction'

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Prepare a case analysis of Philips Maps Out a New Direction

When Phillips was taken over by Kleisterlee, Phillips had half a dozen departments that lacked communication and even competed with each other. A large number of its products were low margin products. Kleisterlee started a divestiture program and in the past year finally sold off the volatile chip unit for $10 billion to some equity investors.

The unique strength of Phillips is its brand recognition and innovativeness. Further, the technological superiority of Phillips is its strength. The weakness of Phillips is its unrelated product lines and low profitability of its product lines.

The external environment in which Phillips operates is that of economic weakness. The economic growth rate is stagnating, the business cycle stage in most economies is that of recession, and the unemployment rate is high. Even though the skill level of the workforce is satisfactory, the labor costs are low, especially in countries like Chin and the trade barriers are decreasing. The social environment favors the use of high technology products and innovative ...

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