Philips 2006 Annual Report Download - page 61

Philips Annual Report 2006 61
end ironing system with a steamer and a refresher
into one solution, underscoring Philips’ position as
an innovator in garment care.
Focusing on key established and emerging markets
DAP continues to build and focus on key established
and emerging markets. Effective January 1, 2007, DAP
removed the regional management layer between its
global business units and country sales organizations,
simplifying its structure and processes to facilitate
maximum growth and realize untapped potential.
Expanding into adjacent business opportunities
DAP’s most visible expansion into adjacent business
opportunities was in its Health & Wellness business,
where it expanded its baby monitor business with the
Avent acquisition, extending the category from Baby
Care towards Mother & Child Care. DAP has also
redefi ned the categories for Shaving & Beauty and
Domestic Appliances by including market segments
previously considered out of scope, such as Water &
Air, Espresso and Skin Care. DAP continues to build
capabilities to deal with the extension of its portfolio
into new high-growth categories and markets.
Driving integral customer management
By strengthening (international) key account management
teams and maintaining direct ‘top to top’ contacts with
its customers, DAP has intensifi ed its focus on category
management. Increasingly, DAP partners its customers,
jointly managing a full product offering and growing profi table
categories such as small electrical appliances, which include
both domestic appliances and personal care products.
Pursuit of business leadership
DAP seeks to achieve and consolidate leadership in
its target markets by pursuing breakthrough concepts
to accelerate growth and improving its operational
performance, for example through working capital
management and its simplifi ed organizational model.
DAP also strives to leverage its brands and, where
appropriate, partnerships and alliances.
DAP further expanded its global leading position in electric
dry and wet male shaving and grooming products in 2006.
Shaving & Beauty managed to realize strong sales growth
thanks to the global introduction of a mid-end shaver
range which offered a much improved shaving performance
and a radically designed WilliamsF1 model, as well as – in
selected markets – the Bodygroom all-over body trimmer
Philips Domestic Appliances and Personal Care (DAP)
offers consumers exciting experiences to help them look,
feel and live better. It brings to market technologically
advanced products that are designed around the consumer
and easy to use. DAP offers a wide range of products
that help people prepare food and beverages, take care
of their homes and garments, and enhance their appearance
and sense of well-being. In short, propositions
designed to
improve people’s quality of life – every day.
DAP is engaged in the development, manufacturing
and marketing of innovative home and personal care
propositions through its four businesses* – Shaving &
Beauty, Domestic Appliances, Health & Wellness and
Consumer Healthcare Solutions. In its drive to offer
consumers
appealing value propositions, DAP also partners
with leading companies from other fi elds in order to
deliver
exciting appliance/consumable combinations.
The division
employs over 10,000 people worldwide and has sales
organizations in more than 60 countries.
Major developments
DAP had a successful year in 2006, with a host of
No. 1 or 2 global market positions across its portfolio.
The division was also strengthened with two value-
adding acquisitions: childcare products company Avent
and emergency response provider Lifeline Systems.
Moving forward on objectives
In the Annual Report 2005, DAP defi ned a number
of important objectives for 2006. The advances made
on these are discussed below.
Investing in advertising and promotion,
R&D and breakthrough innovation
DAP invested effectively in advertising and promotion
by concentrating its investment on critical initiatives
and reaped the rewards with, for instance, the successful
launch of the Bodygroom trimmer, which has won several
advertising campaign awards. DAP also invested more
aggressively in R&D, specifi cally in breakthrough R&D.
Results of such investments include the innovative
3-in-1 Wardrobe Care Solution, which combines a high-
The Oral Healthcare business has been incorporated into the
Health & Wellness business as of January 1, 2007. As of the same
date, Consumer Healthcare Solutions was transferred to the new
sector Innovation & Emerging Businesses.
*
54 The Philips sectors
Domestic Appliances
and Personal Care
86 Risk management 100 Report of the Supervisory Board 110 Financial Statements