Philips Healthcare uses a transnational production system with product specialization in regional markets. It focuses R&D efforts on diagnostic imaging products in Europe and home healthcare and disease detection products in Asia and the US. The company emphasizes innovation, training its employees, and adapting its marketing strategies to local conditions worldwide under the leadership of CEO Frans van Houten.

1. PHILIPS HEALTHCARE

2. Value Chain Model
High
High foreign investment with
extensive coordination of
activities
Purest Global
Strategy
PHILIPS HEALTHCARE
Country Centered
Strategy
Export based strategy with
decentralise marketing
Geo. Dispersed Geo. Concentrated
Coordination
of Activities
Low
Configuration of Activities

3. Logistics
 All the inbound and outbound logistics are outsourced to
UPS.
 On-site warehousing
 Direct supply from manufacturing units.

4. Overview of Manufacturing
Manufacturing Plants
Strategic Acquisitions

5. Transnational Production Systems
Product-specialization in a Regional Market

6. Marketing Mix - Product
Diagnostic - ECG
Advanced Molecular Imaging X - Ray Patient Monitoring
Mother & Child CareUltrasound

7. Marketing Mix - Price
 Standardized pricing
 B2B Strategy
 Competition influences Price

8. Marketing Mix - Place

9. Marketing Mix - Promotion
Traditional
 Medical Congresses
 Conferences
 Exhibitions of non-profit organisations for better health
such as HIMSS
Digital

10. LEADERSHIP AND MANAGEMENT
“I want to enable our managers, local market teams and business
units to take charge and to do what is best for Philips. A timely
decision may be right or wrong; a decision that comes too late is
always wrong. By allowing our market teams to resource to win, we
can continue making successful investments. Innovation will remain
a cornerstone of our strategy. Investing in innovation is part of
investing in growth. But we must base our bets on a very profound
understanding of local markets and customers.”
-Frans van Houten, President and CEO Royal Philips

11. McKinsey 7-S Framework
Shared
Values
Structure
Style
Strategy
Skills
Staffs
System

12. Organisational Structure –
Executive Committee
CEO
Frans van Houten
Chief Strategy & Innovation Officer
Jim Andrew
Chief Legal Officer
Marnix van Ginneken
Chief Human Resource Officer
Denise Haylor
Chief Market Leader
Ronald de Jong
Chief Executive Officer Greater China
Patrick Kung
Chief Executive Officer Philips Consumer Lifestyle
Pieter Nota
Chief Executive Officer Philips Lighting
Eric Rondolat
Chief Financial Officer
Ron Wirahadiraksa
Chief Executive Officer Asean & Pacific
Damien Cummings
Chief Domestic Appliances
Andrea Ragneti

13. Human Resource
66
68
70
72
74
76
78
80
2009 2010 2011 2012 2013 2014
Employee Engagement Index
Employee engagement is the key to Philips competitive advantage

14. Human Resource - Training

15. Human Resource –
Global Talent Acquisition Strategy
• Philips employee referral
• Internal Hire
• Proactively source by recruiter
• Digital career channel
• Philips careers website

16. Human Resource –
Philips University
• For Managers
• They implement one Central Management System to raise
the quality of standardisation and simplification for
managers of all levels.
• For Leaders
• In Leadership, academy delivers a simplified and
comprehensive system of leadership initiatives to create a
long term leadership pipeline at all levels and cross all
parts.

17. Technology - Innovation
 1st biphasic AED
 1st US airline save
 1st AED for children and infants
 1st AED designed specifically for home
 1st and only over the counter AED
 1st AED to implement a ‘Quick Shock’ algorithm. Our
AEDs are typically able to deliver a shock in less than 8
seconds after CPR.

18. R&Ds Around The World
Research Centres
Aachen, Germany
Molecular Imaging
Systems
Personal Health
Solutions
X-Ray Imaging
Systems
Hamburg, Germany
Diagnostic imaging
systems
Image-guided
intervention and
therapy
Medical image
processing
Eindhoven,
Netherlands
Diagnostic imaging
Patient care
Home healthcare
Shanghai, China
Chronic disease
management
Imaging system
solutions
Home healthcare for
the Chinese market
Bangalore, India
Cardiology
Perinatal care
Women’s health
Cambridge, UK
Home healthcare for
the UK market
Briarcliff, NY, USA
Controls,
Communication, &
Healthcare
Informatics
Clinical Informatics,
Interventional, &
Translational
Solutions
Ultrasound,
Photonics, and
Bioinformatics
Focus on research imaging product (i.e. X-ray)
Focus on research home healthcare products (i.e. sleep therapy systems) and early detection of disease (i.e. cardiology)
Focus on research clinical sites, provide clinical decision support and medical ultrasound

19. Financial Management
 3rd Party Payments
 3rd Party Receivables
 Inter-company transfers
 Liquidity Management

20. Procurement
 Perform and Transfer
 Competitive networks or supplier ‘Ecosystems’
 Policies and Procedures
 Supplier Sustainability & Environment