Philips 2011 Annual Report Download - page 68

6 Sector performance 6.2.1 - 6.2.3
68 Annual Report 2011
geographies. Our investment in research and
development enables us to deliver a stream of locally
relevant, meaningful innovations. We have a leading global
brand, which is highly trusted across the world.
The fragile global economic environment in 2011 had a
negative impact on consumer demand for some
categories and some markets. However, we also saw
strength in growth geographies, driven in part by the
continuing emergence of the middle class.
Underlying trends continue to drive growth in our key
categories:
• In Male Grooming, young men are increasingly turning
to electrical grooming solutions to create a much wider
range of facial hairstyles, helping them to express their
own individual look
• In Oral Healthcare, Philips Sonicare is already a market-
leading brand in the world’s largest oral healthcare
markets. It is also a business that’s poised for growth
thanks to its plans to expand geographically and to
broaden its portfolio into new value spaces and price
points
• In Kitchen Appliances, Philips is delivering local
innovations based on global platforms that deliver on
the specific eating habits of different cultures around
the world whilst driving global scale
• In Coffee, fully automatic espresso and portioned
solutions, such as the Philips SENSEO portfolio,
account for more than 60% of the total coffee market
value and over 95% of its growth. With the Philips Saeco
and SENSEO portfolios, the company is well-
positioned to capture this growth
6.2.2 Helping people achieve a healthier and
better life
Consumer Lifestyle makes a difference to people’s lives
by making it easier for them to achieve a healthier and
better lifestyle.
Consumer Lifestyle works together with Philips Design to
monitor trends ranging from consumer tastes to design
aesthetics. With its global footprint, Consumer Lifestyle
is well positioned to capture and respond to emerging
needs in local markets. Country organizations are our
interface with the consumer, allowing us to accurately
identify local needs, tastes and commercial opportunities.
We apply a rigorous product development process when
creating new value propositions. At its heart are validated
consumer insights, which show that the propositions
meet a market need. The combination of insight and
innovation creates a platform for sustainable business
success.
6.2.3 About Consumer Lifestyle
The Philips Consumer Lifestyle sector is organized around
its businesses and markets, and is focused on value
creation through category development and delivery
through operational excellence.
We plan, resource and manage performance by Business/
Market Combination. Our operating model stimulates
entrepreneurship and speed by ensuring clear
accountability and by moving decisions closer to our
customers and markets. Our teams are highly engaged and
our local leaders empowered, which provides a strong
platform to ignite growth.
In 2011 the sector consisted of the following areas of
business:
• Health & Wellness: mother and childcare, oral
healthcare
• Personal Care: male grooming, skincare, beauty
• Domestic Appliances: coffee, floor care, garment care,
kitchen appliances, water & air, beverage appliances
• Lifestyle Entertainment: communication & control,
audio & multimedia, speech processing, headphones &
accessories, home cinema & home video
Total sales by business 2011
as a %
Health & Wellness
13
Lifestyle
Entertainment
32
Other incl. Licenses
5
Domestic
Appliances
28
Personal Care
22
We offer a broad range of products from high to low
price/value quartiles, necessitating a diverse distribution
model. We are expanding our portfolio to increase its
accessibility, particularly for lower-tier cities in growth
geographies. We are also developing new retail channels,
for instance selling our innovative laser-based skin
rejuvenation solution, Philips RéAura, in high-end beauty