An innovation/creative audit of an organisation.

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Creation, Innovation 14/01/02

and Enterprise.

EN22001

Coursework: "An innovation/creative audit of an organisation"

DAUBRY JULIEN

01008906

Introduction

This report is an innovation audit of Royal Philips Electronics. This firm is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 37.9 billion in 2000. It is a global leader in colour television sets, lighting, electric shavers, colour picture tubes for televisions and monitors, and one-chip TV products. Its 192,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, and medical systems. Philips is quoted on the NYSE, London, Frankfurt, Amsterdam and other stock exchanges.

I have chosen Philips for this report because I am interested in electronics products, and in all new technologies. The electronic market is interesting, because it is in constant evolution: there are always new products launched on this market. Moreover, Philips is a multinational company, which allow me to find more easily some information about their creativity.

This report will first provide information about Philips, by presenting the firm history, its location and the kind of product that it manufacture. This will help us to understand the second part of this report, which is an assessment of the firm's creativeness. The company will be evaluated using 9 criteria, dealing with innovation and creativity. It will finish by giving Philips some recommendation to improve its market position and so its profits.

Part I: Background information about Philips

History:

Philips has been created in 1891 when Gerard Philips established a company in Netherlands. The company initially concentrated on making carbon-filament lamps and by the turn of the century was one of the largest producers in Europe.

Developments in new lighting technologies fuelled a steady program of expansion, and, in 1914, it established a research laboratory to study physical and chemical phenomena, so as to further stimulate product innovation.

Marketing companies had already been established in the US and France before the First World War, and in Belgium in 1919, and the 1920s saw an explosion in their number.

It was at this time that Philips began to protect its innovations with patents, for areas taking in X-ray radiation and radio reception. This marked the beginning of the diversification of its product range. Having introduced a medical X-ray tube in 1918, Philips then became involved in the first experiments in television in 1925. It began producing radios in 1927 and had sold one million by 1932. One year later, it produced its 100-millionth radio valve, and also started production of medical X-ray equipment in the United States.

Philips' first electric shaver was launched in 1939, at which time the Company employed 45,000 people worldwide and had sales of 152 million guilders.

Science and technology underwent tremendous development in the 1940s and 1950s, with the development of the Philishave electric shaver.

Philips also made major contributions in the development of the recording, transmission and reproduction of television pictures, its research work leading to the development of the Plumbicon TV camera tube and improved phosphors for better picture quality.

It introduced the Compact Audio Cassette in 1963 and produced its first integrated circuits in 1965.

The flow of exciting new products and ideas continued throughout the 1970s, resulting in the inventions of the LaserVision optical disc, the Compact Disc and optical telecommunication systems.

Philips established PolyGram in 1972, and acquired Magnavox (1974) and Signetics (1975) in the United States. Acquisitions in the 1980s included the television business of GTE Sylvania (1981) and the lamps business of Westinghouse (1983).

The eighties were characterised by a period of high growth for the consumer electronics market. Innovative products such as VCRs and CDs were introduced into the market and many of these innovations were driven by Philips. The Compact Disc was launched in 1983, while other landmarks were the production of Philips' 100-millionth TV set in 1984. However, a crucial change during this period was the growth of newer competitors and Philips underestimated their threat. Philips continued to innovate, but began to lose ground to competitors from Japan who could reduce prices because of their volume advantages leading to economies of scale.
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The 1990s was a decade of significant change for Philips. The company carried out a major restructuring program to return it to a healthy footing. Today, Philips is at the leading edge of the digital revolution, introducing world-class products that are helping to improve people's lives as we continue into the new millennium.

Area of business:

Whether in homes, factories, offices, airports, or on the street, it's hard to imagine a place where Philips is absent. Some of its products are tucked away inside, like integrated circuits or CD drives. Some of them are undergoing dramatic ...

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