Radical Innovation at Philips Lighting

Topics: Innovation, User innovation, Eric von Hippel Pages: 6 (2083 words) Published: June 7, 2011
Radical innovation at Philips Lighting
Nowadays, radical innovation has increasing importance in competitive market. Also it is difficult to implement it in establishing firms because they have stable organization culture for many years and it is very risky to change strategy, product or services with radical innovation. ‘Radical innovations transform the relationship between customers and suppliers, restructure marketplace economics, displace current products, and create entirely new product categories.’ (Leifer R, O’Connor G. C. and Rice M. 2001: The role of hubs. Vol. 15, Issue 3.) Leifer R, O’Connor G, C, and Rice M,(2001) state that large and establishing firms have many difficulties when they make radical innovation through their steady organizational models and culture. Despite their solid background to work out operations; they don’t want to take a leap into new technologies within chaotic and uncertain situations. Innovation is very crucial for all the companies because they can survive and continue their operations through development which always needs innovation. Generally, firms cannot exist for a long time if they don’t make innovation. They should supply people’s needs as product or service and get new customers with new technologies and higher standards. Furthermore, companies should have a capability to reinvest themselves and they sometimes have to change their target market like Nokia which was founded as a timber and paper company at the beginning. Moreover, getting the old and the new together effectively is one of the most important things that companies should achieve in order to live longer. Also, adding new knowledge and processes into the old and strong organizational culture, companies can retain the new spirit in the establishing firms. For the purpose of this essay, I am going to refer briefly to the challenge facing Philips Lighting after 2000. I clarify how the build of a new vision and the take of risk through radical innovation change the organizational structure of Philips and what were the difficulties in this irresistible demand of the world. Firstly, I am going to analyse the historical innovation background of Philips until recently, then its working tools and finally some business outcomes of this firm. II.Background of Philips Electronics

Philips is an international company with a brand name which is globally known. Operating in plenty of areas, Philips focuses at the present on Healthcare, Consumer Lifestyle and Lighting. Characterized in its company profile as a “Health and Well-being” corporation, its total sales figure hit in 2007 the EUR 26,793 million having at the same time an EBITA of 7.7%. The foundations of Philips were laid in 1891 when Anton and Gerard Philips established Philips & Co. in Eindhoven, the Netherlands. Also, Philips brought many new products and technologies to market during a period of more than 100 years. Its innovation history started in 1914 with the production of carbon-filament lamps and it continued with the construction of a medical X-ray tube in 1918, the production of Compact Audio Cassette in 1963, the compact disc in the 80s and recently the Ambi-light TV. Seven years ago, Philips company decided to reinvigorate its brand and for this reason it drove a market driven program to get expertise in end-user insights resulting in the creation of a new brand logo which is ‘Sense and Simplicity’.

Philips had always invested in R&D and its creative designers were very successful for more than a decade. This brought huge success and innovations through its vainglorious history. Philips had always been operating in lighting industry although being in slow-growth market. In 2000, besides the end user innovation, Philips started its radical innovation journey.

III.Radical Innovation Journey of Philips
In December 2000, Philips started their innovation journey with innovation workshop for his group managers and it was...

References: • Tidd, & Bessant J. (2009). Managing Innovation: Integrating technological, market & organizational change. Wiley, 4th edition.
• Leifer R, O’Connor G. C. and Rice M. (2001). Implementing radical innovation in mature firms: The role of hubs. Vol. 15, Issue 3.
• Seebode D., Harkin G. and Bessant J. (2009). Case Studies: ‘Radical Innovation at Philips Lighting’.
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