Exhibit 3 Philips’s share price

Exhibit 4 Philips returns on assets

Exhibit 5 Philips share price versus competitors

Exhibit 6 DAP complementary alliances with Douwe Egberts, Nike, Nivea, and Unilever

Table 1 Five forces and value net analysis per Philips product division

Force \ PD

Consumer Electronics






Many products are outsourced to OEDs and OEMs

Low bargaining power of raw material suppliers

Same as CE

Same as CE

Low bargaining power of hardware providers

Some products are outsourced to OEDs and OEMs

Low bargaining power of raw material suppliers


Strong retailers:

They ask for two things:

· High quality (low field-call-rate[1])

· Supreme supply chain[2]

The same as DAP

High negotiation power of strong retailers and carmakers

Hospitals: difficult to gain those locked in by major competitors (high switching costs)

Strong B2B clients


Relatively easy to copy or reengineer products

Possibility to use OEM / OED solutions

High brand presence

Price competition from Chinese

High brand presence

Price competition from Chinese

Easy to enter in conventional lamp business: already fierce competition from Chinese

Patent protect high tech solutions

Difficult to get licenses as well as new customers

High capital required


Sometimes it is hard to find a substitute for an electronic product, unless not using it at all

Same as CE

Rising LEDs, though Philips is among the first here

Less high tech solution provide less service level, very viable for health care domain

Same as CE


Potential cross-product advertisement and lock-in

Many alliances (see also Exhibit 5)

Complementary products from video/audio from other Philips divisions

Other hospital equipment and entertainment

Wide spectre of technology solutions to satisfy all customer needs


Number of strong competitors, mainly Japanese and Chinese

Number of strong brands in the market

Few major competitors: GE, Osram, with Philips leading

Two strong competitors: GE and Siemens

Strong competition, especially from Asians

Legend (cell colour depicts level of attractiveness from Philips prospective):

  • Unattractive
  • Neither attractive nor unattractive
  • Attractive

[1] Field call rate – rate of products rejected by final customers due to quality or other reasons

[2] The producer of the goods should be able to satisfy flexible demand dictated by major retailers

Open all references in tabs: [1 – 4]

2 Responses

  1. […] stock price, return on assets, and relative stock price as compared to competitors all presented in Exhibit 3, Exhibit 4, and Exhibit 5 respectively. All three graphs show stable poor performance until 1996, […]

  2. […] 1 in Annexes presents analysis of suppliers, buyers, entrants, substitutes, complementors, and competitors per […]

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