Lighting, health high on Philips' agenda

Philips Electronics India, the domestic subsidiary of the Dutch giant Royal Philips Electronics, has identified three core areas of business, namely healthcare, lighting and consumer lifestyle.

This marks a deviation from the company's previous focus on four divisions such as appliances, lighting, medical equipment and electronics.

The strategy is aimed at doubling its revenues to Rs 5,000 crore by 2011. The company reported a turnover of Rs 2,649 crore in the calendar year 2006. According to analysts, the company might record 15 per cent growth this year.

Philips has integrated its consumer electronics and domestic appliances and personal care businesses into one division and christened it the consumer lifestyle division.

It will also rechristen the consumer healthcare solutions as home healthcare solutions and the medical system business will be brought under the Philips healthcare division.

Talking about the change of focus, Philips CEO Murali Sivaraman, said: "All companies have a life cycle. Depending on the stage in the life cycle, the company changes its focus or adapts to new strategies. As of now, we are going through a transition and are becoming a consumer-focused company."

According to him, Philips was a product-driven company, but is now focusing on developing products that are close to consumers and understood by them.

In order to drive the message home to consumers, the company will run a new campaign with a tag, sense and simplicity, for which it has earmarked a kitty of Rs 10 crore.

Philips is also on the lookout for an acquisition or collaboration with a local or an international player.

"We are open to all possibilities," said Sivaraman. The company hopes to generate 60-70 per cent of its revenue from organic growth.

He refused to divulge the details of upcoming acquisitions. But sources said the company had a cash surplus of Rs 500-600 crore, which could be used for acquisitions.

By 2012, Philips aims for 30 per cent of its global revenue to come from green products. Currently, 15 per cent of the group's sales come from this category. Internationally, the company is investing EURO 1 billion (Rs 5,548 crore) towards its fourth Eco Vision programme.