The Growth of Philips From Light Bulb Maker to Technology Company

Dutch industrial giant Philips believes two trends will dramatically reshape the global economy: population aging in developed economies and an environmental shift towards greener technologies. Therefore, its strategy involves shifting away from consumer electronics like Magnavox TVs and Norelco shavers towards higher margin health care products with greater margin potential.

History

Philips has become synonymous with technological innovation over its 130 year history, from light bulbs and radio tubes to X-ray machines and cassette tapes. Starting out as two brothers opening a small factory in a Dutch town back in 1891, they now boast an immense global empire despite setbacks and controversy that marred its early days of expansion.

Gerard and Anton Philips understood early on the importance of having an extensive research-and-development capability. In 1914, they created a lab specifically for this purpose and hired physicist Gilles Holst as its leader, thus setting in motion Philips Research Laboratories which became one of the first industrial research centers.

As the company evolved, it diversified into other product lines to meet market requirements. Subsidiaries were established across many countries to serve local markets, while several smaller firms such as RCA, Westinghouse Electric Corp and Siemens AG were acquired.

Philips took full advantage of its neutral status during World War I to capture new markets while benefiting from lower production costs as other manufacturers turned toward producing war equipment. By the 1920s Philips had moved beyond radio tubes into manufacturing radio tubes for television systems. By the 1960s they had created transistors and integrated circuits – critical elements in many later inventions by Philips like CD players in 1978 or energy saving lamps such as PL and SL lamps in the 1980s.

Following World War II, Philips quickly expanded into consumer electronics – now accounting for almost half of its revenues. Marketed under both Magnavox and Philips Electronics names in the US market, its offerings did not always achieve strong market shares; for instance in Europe-dominated CD players from Philips failed to catch on among U.S. consumers who instead chose machines from Matsushita Electric Industrial Co and Sony Corporation instead.

Philips began diversifying its efforts into consumer electronics during the 1980s in an effort to revitalize its image in America. Industry expert and longtime Philips executive Jan Trimmer was brought on board as president to bring back profitability; during his tenure he significantly increased sales within key divisions while overseeing their purchase by PolyGram International in 1983 and acquisition of Magnavox and Signetics by Philips United States shortly thereafter.

Innovation

Over time, Philips has introduced many innovations – both small and incremental as well as radical and game-changing. What has allowed Philips to achieve such innovations is its culture of innovation fostered through leadership, vision and a desire to see change happen – making Philips an international brand known for quality products and a powerful legacy of innovation.

Philips is renowned for always seeking ways to improve life, which is why they excel at developing innovative new products and technologies. At the core of all this lies their customer-first focus, with each individual receiving what they require in order to live the fullest experience. Their customer-first business philosophy has proven highly successful on the marketplace.

This company boasts an illustrious record of scientific research that results in breakthrough products. Their efforts in vacuum electronics for lamps led to the invention of penthode tubes for lamps and TV camera tubes; further technological breakthroughs allowed for products like electric shavers and, most notably, compact disc (CD) players.

Innovation is at the core of their success today; it allows them to stay ahead of competitors by keeping ahead with technology.

Philips innovates by employing cross-functional teams to generate innovative ideas. This involves assigning employees from various departments working together and devising solutions tailored specifically for client needs – something which is an integral component of its success and which can be seen across its entirety.

Philips remains at the forefront of innovation through acquisitions. One such acquisition is Hue, an LED home lighting system which transforms physical spaces into digital ones that can be controlled via smartphones. Hue was launched for public consumption in 2012, sparking much excitement in its wake – leading to Philips becoming an industry leader when it came to home lighting solutions.

Health care

Philips was long known for its innovative technologies that improved consumers’ lives, such as digital TV and optical telecommunication systems, as well as one of their greatest successes: Compact Disc (CD). Philips became especially well known during the 1980s for creating consumer electronic products including video games.

At the dawn of the 21st century, the company saw an opportunity for expansion. By capitalizing on their strengths in imaging, hearing and vision technology to expand into health care device sales for both public and private U.S. healthcare systems they were able to offer solutions which advanced technological innovations related to genomics, population health management and imaging informatics.

Therefore, they were able to create systems that enable physicians to make more informed decisions for their patients, improving clinical outcomes and patient experiences while offering services such as monitoring and analytics, diagnostic imaging, interventional radiology, image-guided therapy, ultrasound and sleep and respiratory care.

Philips also focused on improving its operations to provide customers with optimal service while keeping costs under control, by adopting sustainable processes and implementing circular designs that reduced environmental impact while meeting customer demands. Its commitment to sustainability can be seen through its “Design for Life” philosophy that ensures products meet needs while simultaneously protecting the planet.

Furthermore, it aims to reduce waste production through efforts such as recycling plastics and other materials as well as finding innovative ways to convert trash into energy sources.

Due to these initiatives, it appears likely that the lighting business will expand more quickly than its parent group overall. Van Deursen has suggested that it could meet or even surpass its 6 percent sales growth target and is ready to pursue acquisitions that strengthen technology bases and sales channels for improvement.

Lighting

Philips continued to expand its manufacturing capacity, eventually turning out complete products like radio sets. During World War I, they made significant profits by producing its technology for countries that had banned German technology; these machines were returned after the war ended to Philips for repair or recycling. By 1920s Anton Philips had taken control of his family company as president and altered its strategy by shifting away from producing individual components to developing innovative new products – while keeping its early focus.

As part of their commitment to innovation, the company increased their research spending. During this time they developed various products including tubular fluorescent lights, ceramics, magnetic materials, x-ray tubes and even hearing aids/gramophones – as well as restructuring factories and introducing new management techniques.

By 1958, when the European Economic Community was created, Philips saw an opportunity to increase its market share. They started building large factories capable of manufacturing products for all markets at once – this allowed for more efficient use of resources and better distribution of work across their facilities.

In the 1980s, Norelco switched its focus from industrial electronics to consumer electronics, increasing marketing efforts in support of their various divisions including Norelco, Magnavox and Philco while placing greater emphasis on research with over two-thirds of its R&D budget allocated directly for product division-related research projects.

By 2013, Philips Electronics had become “Koninklijke Philips.” The lighting division had been spun off into Signify N.V., where it now specializes exclusively in energy-efficient LED lighting systems. Due to its diversified business model and commitment to innovation, Signify N.V. remains at the forefront of its industry; their diverse revenue models continue to reduce dependence on traditional sales; for instance they’ve explored Light-as-a-Service arrangements where customers pay a fee instead of purchasing the product itself.