From Chulhas to Defibrillators: Can Philips India Be All Things to All People?

Friday, July 31, 2009

Philips India was once unchallenged in India’s lighting and electronics arena. With more than 75 years in the country, the nearly wholly owned subsidiary of the Dutch multinational Royal Philips Electronics boasts impeccable parentage. But competition eroded its vaunted position, and today Philips has redefined itself as a “health and well-being company.”

“Through consumer insight, we understood that people perceive health and well-being as a combination of superior lifestyle and availability of relevant health care options. This was the beginning of the transformation in the company,” says Philips India CEO Murali Sivaraman.

What remains after two years of strategic acquisitions and divestitures of non-core businesses — by both parent and subsidiary — are three areas of focus: health care, lighting and consumer lifestyle. “We have simplified our organizational structure to fully align with these markets,” Sivaraman notes. “We refer to our new organizational units as ’sectors’ rather than ’product divisions,’ because ’sector’ refers to sectors of the market rather than products. The names of the sectors also focus our attention on the needs we aim to meet, rather than on the products and services with which we might meet them.”

Philips takes sufficient license in defining itself. “Health” refers not only to the medical aspects of personal maintenance, but also to diet and fitness. “Well-being” is a general sense of fulfillment, a sense of comfort, safety and security in daily environments, according to the company. But for marketing and branding experts, Philips’ shift in focus raises a red flag about the value of “umbrella marketing,” or offering notably diverse products under one name. Can one brand be all things to all people?

Source: Knowledge @ Wharton (link opens in a new window)