Philips 2007 Annual Report Download - page 15

We are a people-centric
company that organizes
around customers
and markets
1
Vision 2010 positions Philips as a market-driven company
with an organizational structure that refl ects the needs
of its customer base.
Our three new sectors, Healthcare, Lighting and
Consumer Lifestyle, each address different markets,
but have one thing in common – the customer is
at the center.
By bringing together Medical Systems and our growing
Home Healthcare Solutions business, for example, we
can develop solutions that deliver value throughout
the complete cycle of care – from disease prevention
to screening and diagnosis through to treatment,
monitoring and health management.
And by combining CE and DAP, we will leverage
our competencies to create competitive advantages
in a challenging marketplace. Merging sales teams, for
example, will create greater focus and reach within
our chosen markets. Optimizing supply and service
processes will improve customer-centric effectiveness.
And combining consumer insights will enable us to
deliver even more compelling value propositions.
We deliver innovation by
investing in world-class
strengths in end-user insights,
technology, design and superior
supplier networks
Technology continues to drive many of our innovations,
and innovation is integral to everything we do. But to
ensure it is relevant and meaningful, we take end-user
insights as its starting point.
Product creation and development begins with an
understanding of people’s needs and aspirations. We
make extensive use of our Experience Labs, where we
can study people interacting naturally with our product
concepts. If they fi nd the concepts too complex, we
make them simpler or go on to the next innovation.
The Philips Wake-Up Light is a new, medically proven
wake-up solution based on the simulation of dawn.
It emits light that gradually increases to the intensity
you have selected, gently preparing your body to wake
up. This ‘dawn light’ positively affects your energy hormones,
enabling you to rise naturally and easily, feeling energized
and refreshed.
3
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We invest in a strong brand
and consistently deliver on
our brand promise of “sense
and simplicity” in our actions,
products and services
The 2007 wave of our brand campaign showcased a
range of simplicity solutions that empower consumers,
particularly families, to manage their health and well-
being. These advertisements underscore the deep
consumer knowledge and insights that set Philips apart
in the healthcare industry.
By investing consistently in our brand – also through
activities like our Simplicity Events – we are seeing its
value increase signifi cantly, as evidenced by our fourth
successive rise in the annual Interbrand top 100.
Simplicity is knowing he only gets the exposure he needs.
The Ph ilips B rillianc e CT Sca nner with DoseWise keeps the total
radiation exposure lower while maximising the clarity of the 3D images it takes.
Want to know more about your health & wellbeing? Visit:
www.p hi li ps .co m /si mp li ci ty
Simplicity is knowing he only gets the exposure he needs.
The Philips Brilliance CT Scanner with DoseW ise keeps the total
radiation expos ure lower while maximising the clarity of the 3D image s it takes.
Want to know more about your healt h & wellbeing? Visit:
www.philips.com/simplicity
Si mpl icit y i s k nowi ng hi s h ealthy s mile can lea d t o a heal th y l ife.
The Philips Sonicare Toothbrush. Starting a good oral healthcare routine early will help keep your family’s
teeth and gums healthy and can contribute to better overall health.That’s why Sonicare is the most recommended
power toothbrush brand by dental professionals.Want to know more about your health & wellbeing?Visit:
www.p hi li ps .co m /s im pl ici ty
Our 7
strategic
drivers
We invest in high-growth
and profi table businesses
and emerging geographies
to achieve market
leadership positions
We develop our people’s
leadership, talent and
engagement and align
ourselves with high-
performance benchmarks
4 5
We are well positioned to benefi t from major trends
that will determine global GDP development in the
coming decade, i.e. the need of a growing and longer-
living population for more and affordable healthcare,
the need for energy-effi cient solutions (e.g. for lighting)
and developments in the consumer space. We are also
well placed to realize profi table growth in emerging
markets, while contributing to the sustainable
development of these economies.
We continue to pursue opportunities to make value-
creating acquisitions that can further our growth
ambitions. The acquisitions we announced in 2007,
for example, strengthened or established our leadership
positions in promising markets, or gave us access to
new markets. The successful integration of Partners in
Lighting International, Color Kinetics and Genlyte will
signifi cantly boost our global leadership position in
the market for advanced lighting solutions, while the
announced acquisition of Respironics puts us fi rmly
at the forefront of the fast-growing market for home
healthcare solutions.
Now, the priority is to successfully integrate and leverage
these acquisitions in order to capture their full value and
so deliver the anticipated growth and margins.
In the 2007 edition of our annual Employee Engagement
Survey, almost 100,000 Philips employees – from across
all sectors and functions – were invited to answer
the same 39 questions on leadership, management
capabilities, alignment with Philips’ vision, identifi cation
with the brand, and reward recognition.
The Employee Engagement Index fi gure increased to
64%, from 61% in 2006. We have set ourselves the goal
of reaching the high-performance norm of 70% by 2009.
So while we are on the right track, the remaining gap
still needs to be closed.
Do you have the
freedom to be creative?
The Engagement Survey allows you to express your opinion.
On your work. On your environment. On a lot of things
that affect you directly.
Your ideas and feedback are vital in helping our company
develop and grow. Tell us how we can work together to
make this an even better place to be.
Set your ideas free. Engage for growth.
Take the Engagement Survey:
September 5 to 26
pww.hrm.philips.com
© Chris Liu
We are committed to
sustainability and focus on
making the difference in
effi cient energy use
We drive operational
excellence and quality to best-
in-class levels, allowing us to
make strategic investments in
our businesses
6 7
Global climate change, rising energy costs and pressure
to meet targets on reduction of CO2 emissions are
major issues facing the world today. Addressing these
imperatives and the opportunities they present will
have a major impact on global business.
Philips has a long-standing commitment to providing
solutions that improve people’s lives and are
environmentally sound. Now we are the industry
leader in energy-effi cient lighting with, for example,
our state-of-the-art TL5 lamps and LED light sources,
electronic gear, high-effi ciency optics and energy-saving
lighting controls.
We are aiming for our Green Products to generate
30% of total revenues by 2012, compared with 15%
of Group sales in 2006. This commitment is part of
our latest EcoVision program, which aims to double
investment in green innovations to EUR 1 billion in the
next fi ve years and to increase the energy effi ciency of
our operations by 25%.
During 2007 we launched our Green Logo, a simple tool
to help consumers fi nd Philips’ Green Products in stores
and make responsible choices.
Philips Business Excellence (PBE) provides a holistic
framework for assessing an organization’s position
relative to world-class performance, identifying
strengths as well as improvement opportunities
that support business objectives.
In few areas are the demands for manufacturing
excellence higher than in the automobile industry.
This drives our Automotive Lighting business, which
has adopted a zero-defects policy – not as a philosophy
but as a hard target.
Using the Philips Business Excellence program,
our people at Automotive Lighting identify what
improvements are needed, and formalize them in the
management agenda. The policy is based on management
attention and shop fl oor focus. Black Belts (process
experts) and Green Belts (operational and tactical
experts) lead improvement teams focused on product
quality issues. Our Lighting Quality Improvement
Competition provides a platform where the teams
can share their experiences and learn from each other,
as well as motivating and engaging our people.