Problem Definition
The president of Philips, Cor van der Klugt is aiming to bring a fundamental change in the organization due to the growing and changing market situation and the increase in competitiveness. But the question remains on what strategic change should be adapted along with organizational and cultural change and how that will help the organization to cope up with the growing challenges.
Analysis
The analysis portion will evaluate the company’s internal and external environment utilizing the SWOT model in order to identify the strengths and weaknesses of the company and the opportunities and threats it can endeavor. Next in line is the external analysis as it will provide the industry’s overview using the porter’s five forces to analyze the current market situation. On the basis of the analysis, alternatives will be developed and will be provided with their rationale in order to make recommendations.
SWOT
Strengths
The major strengths of the company include its market leadership which the company is enjoying as it has the privilege of being a pioneer in the industry. On the other hand, currently Philips is considered as a strong brand and is perceived as a quality brand by the consumers.
Furthermore, the company has the ability of sensing the market situation and quickly responding to it by aligning its operations with the market situation. Besides that, the company’s R&D is amongst the major strengths of the company, as it is giving immense focus to its R&D and is trying to develop its R&D as a major source of competitive advantage.
Weaknesses
The company has a diverse focus that is why the company is not consistent in running its operations smoothly in the long run. On the other hand, the assets are not utilized properly in the company, and the asset management is very poor that leads to poor utilization of assets. Besides these major weaknesses, the company’s brand image is also getting affected due to the legal issues that have arisen in the recent years.
Opportunities
The opportunities for the company are immense locally as well as globally, which can help the company strengthen its global position. There is an increasing demand for green products around the world, and the company can utilize this opportunity and take the competitive edge. Secondly, the company can expand into emerging markets which are showing high potential and choose the most lucrative markets.
Threats
The threats that the company has to face are immense and are very intense in nature. Some of the major threats that the company may have to face include competition, which is very intense in the industry. The competition is growing in the local market as well as in the international market, which will require the company to keep on evolving in order to remain competitive. Secondly, the economic conditions around the world are slowing down rapidly, which may decrease the demand of electronic items. On the other hand, global expansion may prove challenging due to the rules and regulations of some growing economies.
Porter’s Five Forces
The porter’s five forces will provide an overview analysis of the industry.
Bargaining power of Buyer
The company has a strong brand name which is very essential for the company as it restricts the buyers from bargaining. The company in the household electronic division is considered as a market leader which is why the brand recognition is very high.
On the other hand, the medical systems division is also highly recognized which gives the company advantage by keeping the bargaining power of consumers low.
Bargaining Power of Supplier
The industry is motivated towards forward integration as the cost of backward integration is very high. This gives the supplier an edge in the industry granting them the power to bargain. The overall scenario in the industry suggests that the suppliers have the advantage of shaping price as the companies are highly dependent on the raw material and small equipment’s like ICs.
Threat of Substitute
The threat is not very high in the industry but still present in every division. Substitutes are available but not ready to be supplied in the electronic division, which keeps the threat at a moderate level. Although the companies in the industry are focusing innovation.........................
This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.
Describes the strategic and organizational changes Cor Van Der Klugt, as he becomes CEO.
This event is accompanied by a short video for Premium Teachers to show in class. To view the video, or to show the students, click on the video icon. "Hide
by Christopher A. Bartlett Source: Harvard Business School 4 pages. Publication Date: June 12, 1991. Prod. #: +391245- PDF-ENG
Related Case Solutions & Analyses:
Gree Case Analysis
Contracting from East to West: Bridging the Cultural Divide
OvaScience
A Brief Introduction to Macroeconomics
Negotiating Social Value – Crisis at Fuel Safe (A): General Instructions
Competing With Analytics By Taking Analytics Offshore
Axel Springer in 2014: Strategic Leadership of the Digital
Golden Star
Dell Computers Field Service For Corporate Clients
Netflix
