In spite of being a brilliant inventor, Philips could never master the art of understanding its consumers. But lately, it has been successful in `making things better' through various restructuring programs. It is to be seen if it can sustain its recovery in the coming times.We need fundamental change to the business model if we are to take our industry forward into a new growth era.

Philips, one of the world's biggest electronics companies, has seen it all in the recent past from shrinking market share, falling profits, product failure and above all a hint of bankruptcy due to its operational and strategic mishaps during 1990s. The company's product portfolio is too wide and unrelated. The consumer electronics division, though accounts for one-third of Philips sales, has consistently been showing disappointing results for over a decade, which is one of the reasons behind the limping performance of the company.

Philips ranks 7th in television, 10th in Video, 6th in home audio and 4th in portable audio categories in the US in terms of its market share. However, all taken together it does not even stand in the top ten in consumer electronics division in the US. In the semiconductor business worldwide in 2003, Philips stands 10th with a market share of 2.5% and revenues of $4.4 bn. Time and again the company that is known for its breakthrough inventions has fallen flat on the marketing front and has not been able to adapt to the changing business environment.

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