Gerard Philips

Philips

1892

• Gerard Philips and his father, Frederik Philips, opened a small light bulb factory in Holland

• Gerard’s brother, Anton, an excellent salesman and manager, joined the company

1899

• Anton hired the company’s first export managers

• The managers spent 8-10 months a year traveling in such diverse places as Japan, Australia, Canada, Brazil and Russia to establish new markets

1900

• Philips was the third largest light bulb producer in Europe

• In Eindhoven, company houses, bolstered education and local services were provided for employees

• Paid its employees so well that other local employers complained

1912

• Set aside 10% of profits for employees

• Electric lamp industry started to show signs of overcapacity, Philips started building sales organizations in the United States, Canada, and France and other cartel-free countries

1918

• Philips began producing electronic vacuum tubes; 8 years later its first radios appeared, capturing a 20% world market share within a decade

• Philips was forced to build local production facilities to protect its foreign sales of these products

1919

• Philips entered into the “Principal Agreement” with General Electric, giving each company the use of the other’s patents. The agreement also divided the world into “Three spheres of influence”: General Electric would control North America; Philips would control Holland; both companies agreed to compete freely in the rest of the world (General Electric also took 20% stake in Philips)

• Philips began evolving from a highly centralized company whose sales were conducted through third parties to a decentralized sales organization with autonomous marketing companies in 14 European countries, China, Brazil and Australia

1930s

• Philips began producing X-ray tubes

• Gerard, an engineer, and Anton, a businessman, began a subtle competition where Gerard would try to produce more than Anton could sell and vice versa

• In anticipation of the impending World War II, Philips transferred its overseas assets to two trusts, British Philips and the North America Philips Corporation in late 1930s

• Moved most of Philips vital research laboratories to Redhill in Surrey,