Philips 2008 Annual Report Download - page 79

>20
million
Senseo coffee
makers sold
since 2001
Lifestyle retail landscape
The lifestyle retail landscape continues to evolve,
with Brazil, China and India emerging as major retail
markets and retailers driving their expansion, both
into new geographies, as well as into the online segment.
Our new Consumer Lifestyle sector, launched on
January 1, 2008, reflects Philips’ evolution from a
technology business to one that focuses on people’s
health and well-being. Through the application of
design and validated consumer insight, we develop
innovative solutions that help to fulfill people’s
lifestyle needs and desires.
Clearly, markets around the world – both mature and
emerging – were hit hard by the steep downturn in the
second half of the year, with its sharp decline in consumer
confidence and consumer spending, a situation that is
expected to continue in 2009. This had a heavy impact
on our Consumer Lifestyle sector. Now more than ever,
focus, flexibility and differentiation remain key to gaining
and maintaining market leadership
.
About Philips Consumer Lifestyle
The Philips Consumer Lifestyle sector was launched
following the integration of the former Domestic
Appliances & Personal Care and Consumer Electronics
divisions. The sector is organized around its markets,
customers and consumers, with its businesses focused
on value creation through category development, and
its functions concentrating on value delivery through
operational excellence, albeit with a lower fixed-cost
base. A delayered management structure has increased
the span of control of the sector’s leadership, creating
greater employee empowerment to help drive Consumer
Lifestyle forward.
The market-driven approach is applied with particular
emphasis at local level, enabling the sales organizations
to operate with shorter lines of communication with
the sector’s six businesses. This also promotes customer-
centricity in day-to-day operations. The grouping of
local sales activities within three sales ‘clusters’ – Western
Europe & North America, Growth (including the emerging
markets of China, India, Russia, Latin America, Poland,
Turkey and Ukraine) and International – with each
cluster defined by the individual market characteristics,
enables Consumer Lifestyle to address a variety of
dynamics in both its mature and emerging markets.
In 2008 the sector consisted of the following areas
of business:
Television – experience television (including the new •
Aurea II, Ambilight and ultra-thin Essence TV ranges),
lifestyle television, professional and business display
solutions
Shaving & Beauty – electric shavers, female depilation
•
appliances, haircare and male grooming products,
vitality solutions (including the Wake-Up light)
Audio & Video Multimedia – home and portable •
audio and video entertainment, including Blu-ray
Disc playback, MP3 and MP4 players, and docking
stations for portable entertainment devices
Domestic Appliances – kitchen appliances, floor care, •
garment care, water and air purifiers, beverage appliances
Health & Wellness – oral healthcare, mother and •
childcare, relationship care
Peripherals & Accessories – mobility accessories •
(including headphones, portable audio accessories),
remote controls, PC peripherals, digital picture
frames, audio and video communications (including
DECT and VoIP digital cordless phones).
We also partner with leading companies from other
fields, such as Sara Lee/Douwe Egberts, Nivea Beiersdorf
and Swarovski, in order to deliver customer-focused
appliance/consumable combinations.
Consumer Lifestyle has continued its business with
international key accounts, particularly in emerging
markets. The introduction of ‘flagship’ online stores
for Consumer Lifestyle products has added a key
touch-point to the consumer brand experience.
With our extensive product portfolio, we are able to
service traditional and emerging distribution channels,
e.g. general retailers, electronic retailers, mass merchants,
retail specialists, online retailers, and distributors/
wholesalers. We offer a broad range of products
from high to low price/value quartiles, necessitating
a diverse distribution model that includes mass
merchants, retail chains, independents and small
specialty stores often represented by buying groups.
Under normal economic conditions, the Consumer
Lifestyle business experiences seasonality, with
higher sales in the fourth quarter resulting from
the holiday sales.
Philips Annual Report 2008 79
122
Performance statements
114
Supervisory Board report
110
Our leadership
94
Risk management
70
Our sector performance
Consumer Lifestyle