Philips Company specializes in the production of household appliances. Its markets stretch across the globe with a market presence in over 200 countries. The company is among the leading corporations in the manufacture of household appliances with major competition from Asian producers (Philips, 2010). This essay will analyze five products in its wide array of product lines according to the Boston Consulting group Approach (BCG). Philips has a number of product lines but this paper will only discuss televisions, home theaters, media players, digital photo frames and Blu-ray products.
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According to the BCG matrix, stars are characterized by products with a high growth and high market share. Philip’s home theatre system is such kind of a product. There is a growing market for Home theatre systems because of an increase in the number of musical copies released in multi channel formats (Billboard, 1995). There is a growing market for appliances to play such music and this contributes to the high growth rate experienced by the Philip’s home theater products. This in turn results in high growth rate for the product line. More and more models are being developed by the company to cater for the growing market and different consumer preferences. The home theatre product rakes in quite a good percentage in revenues and profits out of this.
Philip’s product line of Mp3’s and media players has also enjoyed considerable growth in market share and revenues. This is still attributed to a growing music business. The technological advancement that has seen the transition from walkmans to Mp3 music players has played a big role in the growth of market. The move by music companies to store music in Mp3 format has also impacted positively to the increase in revenues from Mp3 and media players. This is because of high demand by clients for appliances that can play music in this format.
The Television business hasn’t been very profitable for Philips. It has been characterized by high competition from other competitors. Moreover, consumers don’t pay much attention to the company that produces television; they basically just look at the price. Prospects are rife that Philips may sell off its television product line as a result. Fierce competition has dented heavily on the Television product line as can be witnessed in low product margins. Previous entrants have also exited from the business citing low profit margins and Philips may be just another victim of the same.
Philip’s digital photo frames are quite unique in the market. What started as a simple technological advancement has been observed to be picking up quickly in the general market. A high growth rate is observed with Philips digital photo frames but the returns are still falling short of expectations. With a low market share due to the presence of substitutes from other companies, Philip’s digital cameras are rated a question mark. This also contributes to slow revenue realization but the sector remains promising as the world moves to embrace digital photography.
Blu-ray and DVD product line is enjoying immense growth because of the new technology Blu-ray has over other traditional forms of playing movie for instance DVDs. The high market growth can be more attributed to Blu-rays than DVDs. The movie industry has been its biggest market by trying to accommodate the new Blu-ray technology in its production. However, just like other technological appliances, the Blu-ray and DVD product line is experiencing immense competition from other companies such as Samsung. This has eaten up on the market share and now all the companies must engage in cut-throat competition to gain more revenue through product modification.
Product lines are critical to most companies in taking care of different market segments. Proper managerial techniques should be applied in managing the product lines. This could ultimately dictate the profitability of the whole organization. Managing product lines involves thorough research and effective decision making. These factors should be ultimately incorporated into the final decisions regarding management.
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Billboard, M. (1995). Home Appliances. New York: Nielsen Business Media.
Philips. (2010). Consumer Products. Web.