Running Head: MARKET ANALYSIS PHILIPS 1

Department of Marketing and International Business

International Business
Course Code: INB372
Summer 2020 Section: 20
MIDTERM ASSIGNMENT
SUBMITTED TO: Mahtab Muntazeri (Mbt)
SUBMITTED BY: Sk. Shahriar Rahman
STUDENT ID: 1712886630
Serial no.: 25
Date: 09.08.2020

TOTAL MARKS - 100

MARKS OBTAINED:

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 MARKET ANALYSIS OF PHILIPS (NORTH AMERICA) 2

Contents
Introduction:........................................................................................................................3

Market Analysis:..................................................................................................................4

Globalization of market & Globalization of production:....................................................4

Political environment:..........................................................................................................4

Economic environment:.......................................................................................................5

Legal environment:..............................................................................................................5

Cultural environment:..........................................................................................................6

Power distance:....................................................................................................................6

Individualism:......................................................................................................................6

Masculinity:.........................................................................................................................6

Uncertainty avoidance:........................................................................................................7

Long-term orientation:.........................................................................................................7

Conclusion:..........................................................................................................................7

References............................................................................................................................8
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Introduction:
Philips is a multinational conglomerate corporation headquartered in Amsterdam,
Netherlands. Founded by Gerard Philips and his father Frederik Philips in 1981 was one of the
largest electronics companies in the world. Philips is currently focused in health technology
field. In Eindhoven the company started their production in 1892. They started by producing
carbon-filament lamps and other electro-technical products. Philips main focus was being export-
oriented. The first large orders were from Russia. One was from the Tsar to light up the Winter
Palace. The company began constructing plants in north America by the 1930s which was called
Philips Electronics North America. At present the headquarter of Philips Electronics North
America is situated at Massachusetts, United States.
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Market Analysis:
I am analyzing Philips North America, mainly focusing on USA market.

Globalization of market & Globalization of production:

From the start Philips was export oriented. Their target was globalizing their products.
One of the first orders they got from Tsar, Russia to light up the winter palace. It was a big step
of their globalization of market. They started their operation in North America by 1930s. In 1974
Phillips begins production of the industry's first coiled 7-way electrical assembly which was the
start of Philips North America production.

Political environment:
The United States has a solid political system and efficient rule of law, with elections
considered fair and open. The nation has immense political and economic control in both
domestic and global policymaking, and is known as the world's leading superpower.
Nevertheless, the country faces international criticism for its interventionist policies on the 'War
on Terror,' which is a pillar of foreign policy, while also supporting militant groups and
increasing the threat of terrorism
Philips has a workforce of 105,000 and operates in over 60 countries. This has a very
diverse portfolio, including consumer electronics, home appliances, personal care, and personal
health care. So, it's quite clear that governments are setting certain laws in all of those countries
that Philips will obey. The trade war between the US and China has adversely affected Philips'
earnings. Philips is exporting some of its goods from the US to China and those from China to
the US, and the company has been affected by the tariffs imposed on each other by the two
countries on both sides.
 MARKET ANALYSIS OF PHILIPS (NORTH AMERICA) 5

Economic environment:

The US is the largest economy in the world, with a GDP of over $16,760 trillion. The
economic structure is well developed and derives its energy from its manufacturing and services
sectors. The 2009 recession negatively impacted the country's economy, and levels of
unemployment soared to an alarming level. Yet the economy bounced back in the third quarter of
2014 with growth of about 4 per cent as consumers and companies increased spending. The
growing budget deficit, however, puts the country's economic prosperity at serious risk, as the
current deficit amounts to a staggering $506 million.

It's really important for Philips to thrive and develop economic stability. The
government's support for the LED lights has greatly opened up Philips' growth potential. The
unemployment rate is rising in China and India, which means that the job supply is more than
demand, and people are willing to work at low wages, which would help Philips recruit workers
at low wages. The U.S.-China trade war has slowed the world economy, particularly China's
economy has taken on a hit that decreases people's commodity consumption and also decreases
demand for Philips product.

Legal environment:
Any business is legally binding in the country in which it operates and the businesses
are required to abide by these laws in any case. Because Philips operates in various verticals, it
has to take care of all the laws relating to the respective vertical. It recently faced a legal dispute
in its healthcare business in the United States where it was held responsible for mishandling
3623 concerns about issues with its medical imaging equipment. The problem did not cause
severe injury but it could do so.
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Cultural environment:
I am going to talk about Hofstede’s five cultural dimension of USA.

Power distance:
Us has the lower power distance ranking (PDI) (40), when compared to the worlds an
average of 55 according to the Hofstede’s cultural dimension in a low-powered country is an
indication of great quality between society, government, organization and family. It shows
cooperative relationships across all power labels and provides an acceptable cultural atmosphere,
its low power gap shows a good partnership between bosses and workers that helps businesses
remain stable in many circumstances.

Individualism:
US ranks high in individualism, which may mean that there is more individualistic minds
et less cooperation between immediate family members and others Typically the participants of t
he individualistic society focus more on the job and themselves and very close participants.
Individualism is supposed to take care of itself, on the social side we find people who are deeply
bound and linked in communities and extended families whose collectivism of exchangeable
allegiance has no political sense which refers only to community and which is extremely
fundamental.

Masculinity:
In the hofstede dimension we are ranked 62 in masculinity, when compared to the worlds
average of 50 they indicate that USA has a significant gender difference, male domination in
society is generally considered as important because of their roles in society, which results in the
female population becoming more competitive with women trying to move into male roles.
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Uncertainty avoidance:
United States ranks 46 in the Hofstede’s aspect of uncertainty avoidance as compared to
the worlds average of 64 low rank of uncertainty avoidance in a society is considered to have
very few laws and regulations and they do not seek to regulate the outcomes and tests this form
of society is often open to new ideas thoughts and beliefs.

Long-term orientation:
USA ranked the lowest in the long term as 29 when compared to the world average of 45,
showing that society has a cultural tradition in accordance with rules and regulations.

Conclusion: 
Philips started its journey by producing carbon-filament lamps now the company mainly
focused on medical sectors. Its move of globalizing its market & production have been the main
move for their success. I talked here about Philips North America market mainly about USA
where Philips currently offers healthcare, home appliances, grooming products.
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References

“Philips Electronics North America Corporation.” (August 05, 2020). Company Profiles for
Students. Retrieved from

Encyclopedia.com: https://www.encyclopedia.com/economics/economics-
magazines/philips-electronics-north-america-corporation
Deckmyn, Dominique C. (2019.February 27). Philips Electronics NV. Retrieved from
Britannica.com: https://www.britannica.com/topic/Philips-Electronics-NV
“WHAT ABOUT THE USA.” (N.D.) Retrieved from hofstede-insights.com:
https://www.hofstede-insights.com/country/the-usa
“HISTORY.” (N.D.). Retrieved from Phillipsind.com:
https://phillipsind.com/about_phillips/history#:~:text=1974,assembly%20made%20in
%20North%20America
“More than a century of innovation and entrepreneurship.” (N.D.). Retrieved from Philips.com:
https://www.philips.com/a-w/about/company/our-heritage.html