Philips 2013 Annual Report Download - page 78

5 Sector performance 5.2.1 - 5.2.2
78 Annual Report 2013
5.2.1 Lifestyle retail landscape
Across the world, consumers are looking for solutions
that help them to be healthy, live well and enjoy life.
They want to be in control of their own health and well-
being and to care for their family and friends. They want
to look and feel good.
In a connected, digital world, consumers are looking for
smart, personalized solutions. Purchase decisions are
increasingly made or influenced online; this is as true of
consumers in growth geographies such as China, as it is
in developed markets such as Western Europe.
The rise of the middle class in growth geographies is
another trend impacting the retail landscape. This
rapidly expanding group is experiencing greater
spending power.
In 2013, economic headwinds caused continued
pressure on consumer spending in some markets.
However, living a healthy life remained a high priority
for consumers.
5.2.2 About Philips Consumer Lifestyle
At Consumer Lifestyle we aim to make a dierence to
people’s lives by making it easier for them to achieve a
healthier and better lifestyle. The sector is focused on
value creation through category leadership and
operational excellence. We are increasing the quality
and local relevance of product innovation, the speed
with which we innovate, and expanding our distribution
to capture increasing spending power in growth
geographies.
Accelerate! is fully embedded in Consumer Lifestyle
and delivering strong results. Having moved from a
functional, centrally-led organization to an
organization built around businesses and markets, we
are now able to direct investments to where the growth
is, addressing locally relevant consumer needs. This
approach enables us to take locally developed
platforms and adapt them for other markets or on a
global scale.
Our end-to-end approach is accelerating our specialist
capability development in mature markets, to enable
eective partnerships with customers and consumers,
and in growth geographies, to enable development of
go-to-market strategies. Additionally, an extensive
change program has instilled an organizational
performance culture with a strong focus on
accountability.
In 2013 the Consumer Lifestyle sector consisted of the
following areas of business*:
• Health & Wellness: mother and childcare, oral
healthcare, pain management
• Personal Care: male grooming, beauty
• Domestic Appliances: kitchen appliances, coee,
garment care, floor care, air purification
*Philips had reached an agreement to transfer the
Audio, Video, Multimedia and Accessories (AVM&A)
business to Funai Electric Co. Ltd in Q1 2013. This
agreement has been terminated as of October 25. Since
then, Philips has received expressions of interest in the
business from various parties and has been actively
discussing the sale of the business with potential
buyers. In the meantime, the AVM&A business operates
as a stand-alone entity named WOOX Innovations.
Consequently, the AVM&A business is reported as
discontinued operations throughout 2013.
Total sales by business 2013
as a %
Health & Wellness
20
Personal Care
33
Domestic
Appliances
47
We oer a broad range of products from high to low
price/value quartiles, necessitating a diverse
distribution model. We continue to expand our portfolio
to increase its accessibility, particularly for lower-tier
cities in growth geographies. We have implemented
innovative approaches in online and social media to
build our brand and drive sales.
Under normal economic conditions, the Consumer
Lifestyle sector experiences seasonality, with higher
sales in the fourth quarter.
Consumer Lifestyle employs approximately 17,900
people worldwide. Our global sales and service
organization covers more than 50 developed and
growth geographies. In addition, we operate
manufacturing and business creation organizations in
Austria, Brazil, China, India, Indonesia, Italy, the
Netherlands, Romania, the UK and the US.