{"id":15750,"date":"2016-11-17T14:51:12","date_gmt":"2016-11-17T19:51:12","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/a-bright-future-for-philips\/"},"modified":"2016-11-17T14:51:12","modified_gmt":"2016-11-17T19:51:12","slug":"a-bright-future-for-philips","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/a-bright-future-for-philips\/","title":{"rendered":"A Bright Future for Philips"},"content":{"rendered":"

\u201cSmart, connected products are changing how value is created for customers, how companies compete, and the boundaries of competition itself. These shifts will affect virtually every industry, directly or indirectly.\u201d[1]<\/strong><\/a><\/em><\/p>\n

This statement on the impact of the Internet of Things (IoT) on value creation should be a resounding call to action for companies around the world. Technology is changing the way we interact with everyday products and companies will have to either adapt and change with the advance of technology or get left behind.<\/p>\n

At Philips, the company has recognized this need to adapt and innovate and is working hard to create products that satisfy customer\u2019s connectivity demands. Pieter Nota, the Executive Vice President, Chief Executive Officer of Consumer Lifestyle says, \u201cThe \u2018Internet of Things\u2019 has become central to how we innovate at Philips \u2013 and how we listen to, engage with and take inspiration from our consumers\u2026smart products must constantly evolve according to the desires of our consumers and we must be agile to satisfy them and create value.\u201d With that commitment to IoT innovation, Philips has created several connectivity based products such as a \u201cwearable device called ActiveLink, that collects data about the user\u2019s activity levels,\u201d the Philips Smart Air Purifier, which \u201cprovides families with a real-time overview and control of indoor air quality via their smartphone,\u201d the Philips AVENT Smart Baby Monitor \u201cwhich connects to and is operated by a smartphone, ensuring parents are never disconnected from their baby,\u201d and most notably, the Philips Hue light bulb, a light bulb that gives a user the ability to change its brightness and color from a smartphone. This light bulb has been Philips\u2019 most public foray into the world of the IoT. It has created many business opportunities for Philips to serve corporations or organizations interested in taking advantage of this new technology for their customers like the city of Los Angles or Cisco and SAP. Additionally, Philips sells the bulb direct-to-consumer as an innovative way to light up one\u2019s home.<\/p>\n

\"Philips<\/a>
Philips Hue Lightbulb<\/figcaption><\/figure>\n

Nota proclaims, \u201cthe \u2018Internet of Things\u2019 puts the consumer in the driving seat and allows us at Philips to ensure our products are more personal, relevant and impactful than ever before. The consumer has always been at the heart of what we do. This interconnected world presents new ways for Philips to work with consumers to help them to be healthier, live well and enjoy their life.\u201d[2]<\/a> In service of this goal to create products that improve consumers\u2019 lives, Philips participates in a program called Plug and Play, which \u201cintroduces start-ups to corporations and investors to accelerate their commercial development. It will work with Philips to filter hundreds of IoT-orientated start-ups that match Philips\u2019 most relevant technology needs.\u201d This openness to partnerships will allow Philips to be on the forefront of IoT innovation and will give start-ups the necessary scale to propel their ideas forward in a successful way. Philips is wise to take advantage of this opportunity and is dedicated to adding value to its existing business model by focusing on \u201cinnovators in sensor data, analytics and connected lighting for buildings and smart cities.\u201d[3]<\/a><\/p>\n

Philips\u2019 10K claims that, \u201crecognizing that the growth and profit pool will shift to digitally connected lighting products, systems and services, our goal is to become a lighting solutions company capturing superior growth and profitability.\u201d[4]<\/a> In order to become the successful lighting solutions company Philips wants to be, they will need to double down on IoT product innovation to continue to push the envelope in lighting technology and stay relevant to consumers. Beyond direct-to-consumer uses, Philips should consider more partnerships with governments and large corporations. Imagine city streetlights that could be more actively controlled based on climate and lighting conditions, or corporations that could have more control over how their office buildings were lit, hour-by-hour. These two sectors provide a huge amount of growth opportunity for Philips, especially if they position the light bulbs as a long-term cost savings to customers due to the more efficient use of electricity gained by being able to dim or turn off lights with greater ease. If Phillips can continue to improve upon their IoT technologies and gain market share, their business model will be able to sustain itself through the digital transformation age.<\/p>\n

(782 Words)<\/p>\n

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[1]<\/a> Porter, Michael E., and James E. Heppelmann. “How Smart, Connected Products Are Transforming Competition.” 性视界 Business Review<\/em>, November 2014. Accessed November 16, 2016.<\/p>\n

[2]<\/a> Nota, Pieter. “How the Internet of Things Empowers Us All.” Philips. Accessed November 16, 2016. http:\/\/www.philips.com\/a-w\/innovationmatters\/blog\/how-the-internet-of-things-empowers-us-all.html.<\/p>\n

[3]<\/a> Macovei, Diana. “Philips Taps into Silicon Valley\u2019s Start-ups, Accelerates Innovation in Connected Lighting for IoT.” Internet of Things Event. August 10, 2015. Accessed November 16, 2016. https:\/\/iotevent.eu\/big-data\/philips-taps-into-silicon-valleys-start-ups-accelerates-innovation-in-connected-lighting-for-iot\/.<\/p>\n

[4]<\/a> Philips, 2015 Annual Report, p. 55, http:\/\/www.philips.com\/corporate\/resources\/annualresults\/2015\/PhilipsFullAnnualReport2015_English.pdf, Accessed November 2016<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Philips embraces the Internet of Things with its Philips Hue smart lightbulb<\/p>\n","protected":false},"author":2144,"featured_media":15757,"comment_status":"open","ping_status":"closed","template":"","categories":[2219,2040,1875,2220],"class_list":["post-15750","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-digitaltransformation","category-internetofthings","category-philips","category-philipshue"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"\nA Bright Future for Philips - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/a-bright-future-for-philips\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Bright Future for Philips - 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