Philips Healthcare

Philips is a diversified worldwide technology company based in Amsterdam, Netherlands. It has about 120 thousand employees and operates in 122 countries around the globe. Its main mission is to improve people’s lives through meaningful innovations, which they’ve achieved through new applications, new business models and unique customer propositions. Philips is active in three major industries that are healthcare, consumer lifestyle and lightening. For this assignment, I’ll talk about the Philips healthcare business since our guest speaker, Ivan Salgo, is an executive from that department.

After dominating the TV industry for a number of years and abandoning it after becoming commoditized, Philips CEO just announced that Philips is on the verge of exiting the lightening business as well. It seems like the company is shifting all its focus on the healthcare division to achieve it’s main objective, which is being the leader of the market through innovating and creating new healthcare technology. Philips healthcare is one of the leading healthcare companies in the world nowadays alongside GE, Siemens and Toshiba. It’s ranked number 2 in medical equipment sales directly behind GE, which together own about 70%+ of the industry’s market share.

Companies in the healthcare equipment industry compete mainly on product differentiation, not through offering low-cost products. Companies try to come up with new technologies and products with different features as well as growing their brand awareness and increasing marketing and advertising. In order for a company to have a sustainable competitive advantage, it needs to be valuable, hard to imitate, rare and sustainable. Philips healthcare has a sustainable advantage in some of it’s technologies such as ultrasound, diagnostic cardiology, patient monitoring, x-ray, nuclear medicine, magnetic resonance, CAT scans, and medical information management. It is leading the industry in the