Execution in the market
Execution in the market
Execution in the market
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
<strong>Execution</strong> <strong>in</strong> <strong>the</strong> <strong>market</strong><br />
Rudy Provoost<br />
Senior Vice President Royal Philips Electronics<br />
CEO Global Sales and Services Consumer Electronics
Consistency and focus <strong>in</strong> strategy and<br />
execution<br />
• Partnerships with lead<strong>in</strong>g retailers<br />
• Innovative alliances and new channels<br />
• Differentiated bus<strong>in</strong>ess models<br />
• Integrated through-<strong>the</strong>-l<strong>in</strong>e <strong>market</strong><strong>in</strong>g<br />
• Enhanced supply cha<strong>in</strong> capabilities<br />
• Global consumer services platform<br />
2
Partnerships with lead<strong>in</strong>g retailers and<br />
<strong>in</strong>novative alliances <strong>in</strong> new channels<br />
Turnover share Top 10 (concentration)<br />
In billion € TO share<br />
top 10<br />
Partnerships with lead<strong>in</strong>g retailers Innovative alliances and new channels<br />
50%<br />
40%<br />
30%<br />
20%<br />
Source: M<strong>in</strong>tel 2003<br />
2.0<br />
1.6<br />
1.2<br />
0.8<br />
0.4<br />
0<br />
1997 2002<br />
Growth <strong>in</strong> Europe G10<br />
1997 1998 1999 2000 2001 2002 2003est 2004 T<br />
3
Differentiated bus<strong>in</strong>ess models and <strong>in</strong>tegrated<br />
through-<strong>the</strong>-l<strong>in</strong>e <strong>market</strong><strong>in</strong>g<br />
Price<br />
Profit<br />
COGS<br />
Differentiated bus<strong>in</strong>ess models Integrated through-<strong>the</strong>-l<strong>in</strong>e <strong>market</strong><strong>in</strong>g<br />
Transport<br />
cost<br />
PC<br />
CoO+<br />
Profit<br />
Supply Direct PC Mass<br />
Merchant<br />
Consumer end price<br />
Retail<br />
PC<br />
CoO+<br />
Profit<br />
Retail<br />
CE<br />
regional<br />
CoO+<br />
Profit<br />
CE Mass<br />
Merchant<br />
Retail<br />
CE<br />
regional<br />
CoO+<br />
Profit<br />
Electronics<br />
Retailer<br />
Retail<br />
CE<br />
regional<br />
CoO+<br />
Profit<br />
Specialty<br />
stores<br />
Pr<strong>in</strong>t advertis<strong>in</strong>g<br />
In-store Poster<br />
4
Enhanced supply cha<strong>in</strong> capabilities and global<br />
consumer services platform<br />
Enhanced supply cha<strong>in</strong> capabilities Integrated through-<strong>the</strong>-l<strong>in</strong>e <strong>market</strong><strong>in</strong>g<br />
CPFR ®<br />
Manufacturer Retailer<br />
Flexible,<br />
shipments<br />
to order<br />
Collaborative<br />
plann<strong>in</strong>g<br />
Collaborative<br />
forecast<strong>in</strong>g<br />
Collaborative<br />
replenishment<br />
5
A streaml<strong>in</strong>ed commercial organization for<br />
effective execution across regions and channels<br />
• Solidify our USA position<br />
• Capitalize on our stronghold <strong>in</strong> Europe<br />
• Drive growth <strong>in</strong> Asia<br />
• Leverage opportunities <strong>in</strong> Lat<strong>in</strong> America<br />
6
DD DD D DD<br />
D<br />
D<br />
D<br />
DDDD<br />
From 2002 till 2003 YTD<br />
WASHINGTON<br />
MONTANA<br />
MAINE<br />
NORTH DAKOTA MINNESOTA<br />
NEW HAMPSHIRE D<br />
OREGON<br />
WISCONSIN<br />
IDAHO<br />
SOUTH DAKOTA<br />
MASSACHUSETTS D<br />
WYOMING MICHIGAN NEW YORK<br />
PENNSYLVANIA D D<br />
IOWA<br />
NEW JERSEY D<br />
NEVADA<br />
NEBRASKA<br />
OHIO<br />
INDIANA<br />
DELAWARE<br />
D D<br />
UTAH<br />
ILLINOIS<br />
MARYLAND<br />
WEST VIRGINIA<br />
COLORADO<br />
D<br />
VIRGINIA<br />
KANSAS MISSOURI KENTUCKY<br />
CALIFORNIA<br />
NORTH CAROLINA<br />
OKLAHOMA TENNESSEE<br />
ARIZONA<br />
NEW MEXICO<br />
ARKANSAS SOUTH CAROLINA<br />
D<br />
D D<br />
DD D<br />
D<br />
DD D D<br />
D<br />
D<br />
D<br />
D<br />
D<br />
D DD<br />
D<br />
D<br />
D<br />
D<br />
DD<br />
D<br />
DD<br />
D<br />
D<br />
D<br />
DD D D<br />
D<br />
D D<br />
D<br />
D DDD<br />
D<br />
DDD<br />
D<br />
D<br />
D<br />
D<br />
D D D<br />
D D<br />
DDDD<br />
D<br />
DDD<br />
D D<br />
D<br />
D<br />
D<br />
D<br />
D<br />
D<br />
D<br />
DD<br />
D D<br />
D<br />
D DDD D<br />
D<br />
DD D<br />
D D D<br />
D<br />
D D<br />
DDD D<br />
D<br />
D D<br />
D<br />
DD D D D<br />
D D<br />
D<br />
D D<br />
D<br />
D DDD<br />
D<br />
D DD<br />
D<br />
D D<br />
D D<br />
D<br />
DDD<br />
D D<br />
DDD<br />
D<br />
D<br />
DDD<br />
D<br />
DD D<br />
DDD D<br />
DD D<br />
D<br />
D<br />
D<br />
D<br />
D<br />
D<br />
D<br />
D<br />
D<br />
D D<br />
DD<br />
D<br />
DD D<br />
DD D<br />
D<br />
D D<br />
D<br />
D<br />
D<br />
D<br />
Price<br />
Philips<br />
Magnavox<br />
D<br />
MISSISSIPPI<br />
GEORGIA D<br />
TEXAS<br />
ALABAMA<br />
LOUISIANA DD<br />
D D<br />
DD D<br />
D<br />
D D<br />
D D DD<br />
D<br />
DD D<br />
DDD<br />
D DDD<br />
D<br />
D D<br />
D<br />
D<br />
D<br />
D DD<br />
D<br />
D<br />
D DD D D<br />
D<br />
DD DD D DD<br />
D<br />
D<br />
D<br />
D D<br />
D D<br />
D<br />
D<br />
D<br />
DDD<br />
D<br />
D<br />
Added<br />
value<br />
Basic<br />
FLORIDA<br />
Philips - Magnavox bus<strong>in</strong>ess model<br />
Solidify our USA position<br />
• Capitalize on our <strong>market</strong> presence<br />
and brand franchise<br />
– Focused account portfolio and<br />
partnerships with w<strong>in</strong>n<strong>in</strong>g retailers<br />
– Co-equity programs and category mgmt to<br />
drive placement productivity<br />
– Streaml<strong>in</strong>ed Magnavox bus<strong>in</strong>ess model<br />
• Leverage partnerships<br />
– Philips-Nike (Sports)<br />
– Philips-Gem<strong>in</strong>i (Accessories)<br />
– Philips-DirecTV (Set Top Boxes)<br />
• Execute <strong>the</strong> bus<strong>in</strong>ess renewal program<br />
– Organization realignment and right-siz<strong>in</strong>g<br />
– Process reeng<strong>in</strong>eer<strong>in</strong>g and outsourc<strong>in</strong>g<br />
– Streaml<strong>in</strong>ed operat<strong>in</strong>g models<br />
7
In billion €<br />
2.0<br />
1.6<br />
1.2<br />
0.8<br />
0.4<br />
0<br />
Growth G10<br />
+31% +7%<br />
21%<br />
15.1%<br />
11.6%<br />
5%<br />
10%<br />
1997 1998 1999 2000 2001 2002 2003 2004 est<br />
Capitalize on Europe<br />
• Leverage our leadership position with <strong>the</strong><br />
trade<br />
– Strategic partnerships with <strong>in</strong>ternational top-10<br />
– Category management for priority categories<br />
– Integrated e-Commerce, supply cha<strong>in</strong> and service<br />
platform<br />
• Drive profitable growth through expansion<br />
and differentiated bus<strong>in</strong>ess models<br />
– Development of new channels and alliances<br />
– Differentiated B2C and B2B bus<strong>in</strong>ess models<br />
– Double-digit growth plans <strong>in</strong> emerg<strong>in</strong>g <strong>market</strong>s<br />
• Execute <strong>the</strong> bus<strong>in</strong>ess renewal program<br />
– Organizational realignment and f<strong>in</strong>e tun<strong>in</strong>g<br />
– Integrated geographical clusters I.s.o N.S.O.s<br />
– Streaml<strong>in</strong>ed operat<strong>in</strong>g models<br />
8
Philips - MTV<br />
Drive growth <strong>in</strong> Asia<br />
• Organize for profitable growth <strong>in</strong> Ch<strong>in</strong>a, and<br />
capture opportunities <strong>in</strong> o<strong>the</strong>r key <strong>market</strong>s<br />
– Expansion and upgrade of distribution<br />
– Focused brand <strong>in</strong>vestments <strong>in</strong> priority categories<br />
– Bus<strong>in</strong>ess plans for high potential <strong>market</strong>s (India)<br />
• Structural footpr<strong>in</strong>t for susta<strong>in</strong>able success<br />
– Intensify alliances and partnerships<br />
– Alignment and <strong>in</strong>tegration of <strong>in</strong>dustrial and<br />
commercial footpr<strong>in</strong>t for synergy and scale<br />
– Integrated economic model with right balance of<br />
local manufactur<strong>in</strong>g and sourc<strong>in</strong>g<br />
• Execute <strong>the</strong> bus<strong>in</strong>ess renewal program<br />
– Organization realignment and right siz<strong>in</strong>g<br />
– Rationalization support functions<br />
– Streaml<strong>in</strong>ed operat<strong>in</strong>g models<br />
9
Example DWIDE<br />
Leverage opportunities <strong>in</strong><br />
Latam<br />
• Leverage our leadership position <strong>in</strong> Brazil<br />
and brand equity across <strong>the</strong> region<br />
– Capitalize on DWIDE success to drive FTV<br />
– Focused brand <strong>in</strong>vestments <strong>in</strong> priority<br />
categories<br />
– Extend <strong>the</strong> retailer partnership programs<br />
• Capture key opportunities<br />
– Mexico turnaround plan<br />
– New Carribean, Plat<strong>in</strong>o and Pacific clusters for<br />
more effective execution<br />
– New policies for marg<strong>in</strong> optimization and better<br />
work<strong>in</strong>g capital management<br />
• Execute <strong>the</strong> bus<strong>in</strong>ess renewal program<br />
– Organizational realignment and right siz<strong>in</strong>g<br />
– Synergy and scale through shared services and<br />
systems, and common <strong>in</strong>frastructure<br />
– Streaml<strong>in</strong>ed operat<strong>in</strong>g models<br />
10
W<strong>in</strong>n<strong>in</strong>g formula for execution <strong>in</strong> <strong>the</strong> <strong>market</strong><br />
Partnerships with lead<strong>in</strong>g retailers<br />
Innovative alliances and new channels<br />
Differentiated bus<strong>in</strong>ess models<br />
Integrated through-<strong>the</strong>-l<strong>in</strong>e <strong>market</strong><strong>in</strong>g<br />
Enhanced supply cha<strong>in</strong> capabilities<br />
Global consumer services platform<br />
Solidify our USA position<br />
Capitalize on our stronghold <strong>in</strong> Europe<br />
Drive growth <strong>in</strong> Asia<br />
Leverage opportunities <strong>in</strong> Lat<strong>in</strong> America<br />
11
Change language