Sustainability Management at Philips

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Case Details:

Case Code : BECG051
Case Length : 25 Pages
Period : 1995-2005
Pub. Date : 2005
Teaching Note :Not Available
Organization : Philips
Industry : Consumer Electronics
Countries : Netherlands

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Introduction Contd...

Barbara Kux (Kux), chairperson of Philips' Sustainability Board, said, "Sustainability is about growth. It is usually defined as meeting the needs of the present generation without compromising the ability of future generations to meet theirs. By empowering future generations to meet their needs, we also open up a world of opportunities for the company."5

Background Note

Philips & Company (Philips) was founded in 1891 by Gerard Philips (Gerard) who established a facility at Eindhoven, the Netherlands, to produce incandescent electric lamps. Gerard's younger brother, Anton, joined the business in 1895 as a salesperson and helped the company become one of the largest producers and marketers of carbon-filament lamps by the early 1900s.

Right from the beginning, Philips laid strong emphasis on research. In 1914, all its research efforts were consolidated and brought under one organization, called Philips Research Laboratories. In the 1920s, Philips began mass production of consumer goods and as a result, decided to diversify its product range.

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X-ray radiation and radio reception were focus areas for Philips and the company's innovations in these areas were protected through patents. The company introduced medical X-ray tubes in 1918. In the 1920s, Philips also began manufacturing vacuum tubes.

It began experimenting with television in 1925; radio production began in 1927 and more than one million pieces were sold by 1932. The 100 millionth radio valve was produced in 1933. The same year also saw Philips opening production facilities for X-ray equipment in the US. The Great Depression6 of the 1930s that followed the stock market crash of 1929 had a negative impact on Philips' business. In the mid-1930s, Philips was in search of ideas that could be converted into saleable products. An executive who was sent to the US in 1937 came up with the idea of manufacturing electric shavers. Philips began manufacturing electric shavers in 1939. The same year it launched sodium and mercury based lamps and sound recording equipment...

Excerpts >>

5] "Beyond Sustainability," Philips Newscenter Archives, 2004.

6] The stock market crash in the US on October 29, 1929, (also called Black Tuesday) saw 16 million shares sold in a single day. The index declined by 86.2% between September 1929 and June 1932. This led to investments and savings shrinking and to a loss of jobs, resulting in depression in the US that continued through the 1930s.


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