Outside-in approach in product development · PMM GBU AL, June 21, 2013 23 Market Introduction Process & PCP - yesterday Joint brainstorm sessions Product Study Phase Product Development

Wolfgang Schiene

PMM GBU AL

June 21, 2013

Outside-in approach in

product development:

Lighting for electrical cars

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Content

• Philips Company Profile

• Outside-in approach in product development:

From product development to business development

• One example: Lighting for electrical vehicles

PMM GBU AL, June 21, 2013

Philips corporate

information

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Royal Philips Electronics

Royal Philips Electronics of the Netherlands is a diversified

Health and Well-being company, focused on improving

people’s lives through meaningful innovations.

As a world leader in healthcare, lifestyle and lighting, Philips

integrates technologies and design into people-centric

solutions, based on fundamental customer insights and the

brand promise of “sense and simplicity”.

4

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4.4

5.96.7

7.78.3 8.1

8.7 8.7

2004 2005 2006 2007 2008 2009 2010 2011

The world’s 41st most

valuable brand in 2011 Philips increased brand value by 29%

in the last five years

Value of the Philips brand

USD billions

Our global reach

Philips is a global company with

operations over all continents.

Philips: a globally recognized brand

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Philips Lighting

Customer Segments

24% 17% 17% 11% 13% 5% 2% 3% 8%

Retail Entertainment Healthcare Automotive Homes Offices Outdoor Industry Hospitality

€22.6 Billion sales in

2011

125,000+ People employed

worldwide in 100 countries

+7% of sales invested

in R&D in 2011

54.000 Patent Rights in 2011

Philips Healthcare

Businesses1 Sales & services geographies1

Imaging

Systems

Home

Healthcare

Solutions

Patient Care

and Clinical

Informatics

Customer

ServicesNorth America International

45% 35% 20%

Emerging

Markets

39% 14% 21% 26%

Philips Consumer Lifestyle

Businesses1 2 Geographies1

Personal

Care

Health &

Wellness

Domestic

Appliances

Television Audio

Video

Multimedia

Mature

Markets

60% 40%

Emerging

Markets

13% 7% 17% 36% 13%

Accessories

10%

A strongly diversified industrial group

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Philips Automotive

OEM

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Philips Automotive mission

8

We believe in simply enhancing

people’s life on the move by

creating meaningful innovations

that make their mobility

experience, safer, more

environmentally friendly and

stylish.

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Industrial footprint

9

Research & Application labs

Production facilities*

*Our state-of-the-art processes and facilities are ISO and TS14949 certified

Shanghai, China

Plauen, Germany Aachen, Germany

Chartres, France

Eindhoven, NL Pabianice, Poland

San Jose, California

Penang, Malaysia

Singapore

Songzi, China

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Lighting solutions

2 Wheeler applications Truck/ Bus applications Car applications

Mobility solutions

Air purification In-car entertainment Workshop lamps

Philips Automotive solutions

10

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Portfolio information

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Daytime Running Lamp LUXEON Rebel

HiPer Vision

products

Mirror turn SnapLED

SuperFlux

SignalSure

CHMSL SnapLED

SuperFlux

SignalSure

Headlight - HB/LB LUXEON Altilon

Xenon products (D5S,…)

Halogen lamps (H8,…)

Front turn LUXEON Rebel

HiPer Vision products

Side marker SuperFlux

SignalSure

HiPer Vision

products

Rear combination lamp SnapLED

LUXEON Rebel

SignalSure

HiPer Vision products

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Product applications

Front fog LUXEON Altilon

LUXEON Rebel

HiPer Vision

Halogen lamps (H8, H11)

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Star products - Bulbs

Xenon

D5S D1 NBV HiPer NCC Halogen

Hi2RLL

13

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Our customers

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Our products are used by

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Confidential PMM GBU AL, May 31, 2012

1970s

1990s

1950s ~1900

2000s

2010s

Incandescent

10 Lm/W

Halogen

H1, H4

~20 Lm/W

2015-2020

OLED

(rear/interior)

& Laser

1980s

Xenon HID

~90Lm/W

LED

... 90Lm/W

Halogen

H7

~25 Lm/W

Philips Automotive has been shaping the market

since 1980 History of car headlighting technology

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Automotive is undergoing historical transformation A changing world provides opportunities

• The world's mobility needs are changing with

higher personalization & customization

• Geographical spotlights are changing with global

demand fueled by emerging countries

• Tighter governmental restrictions & increased

environmental awareness pushes our industry

towards energy efficient mobility means

• Breakthrough LED technology is changing and

shaping the industry

• Health & Wellness will become the focus area of

car manufactures in the next decade

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So, we need to change our way of innovation...

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“Everything that can be

invented has been invented”

Charles H.Duell - Commissioner,

US Patent Office1899

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Innovation along product lifecycle

Time

Nu

mb

er

of

co

mp

etito

rs

Blue Ocean

Unmet need solved in

a new way

Peak

I can do it better and

cheaper

Red Ocean

End-Game / Golden

Tail

LED Halogen HID

35W

HID

25W

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Product Creation Process (PCP)

- day before yesterday

Idea Product

Study Phase Product

Development Process

Development

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“If I had asked people what

they wanted, they would

have said faster horses.”

Henry Ford

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Market Introduction Process & PCP

- yesterday

Joint

brainstorm

sessions

Product

Study Phase Product

Development Process

Development

Concept Business & Market Plan

Market Introduction

Maintenance / Phase Out

Marketing

Development

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Disruptive Technologies

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Business Creation Process: Today

Strategic Planning Portfolio

Management Concept

Application & Solution

Go-To-Market

Marketing & Development & Sales

Customer Feedback

One integrated process involving all stakeholders

Planning Execution

BG BUs

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Key elements in BCP

Technical specification

Customer specific

requirements

Industrialization

Market introduction

Release

Strategic Planning Portfolio

Management Concept

Application & Solution

Go-To-Market

Market trends

Market analysis

Portfolio Analysis

Business Potential

Insights

Proposition

Concepts

Validation of proposition

Technical feasibility

Business Case

Customer need Customer satisfaction

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Let's now invent a lamp for electrical vehicles...

(BCP Quick run)

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BCP Planning Strategic Planning Portfolio

Management Concept

Application & Solution

Go-To-Market

Market analysis: expected market shares in 2020

Source: BCG (2009), The Comeback of the Electric Car? (rev. 2) p.7

What does it mean: Opportunity or Threat ?

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BCP Planning Strategic Planning Portfolio

Management Concept

Application & Solution

Go-To-Market

Source: http://www.conti-online.com/generator/www/de/en/continental/automobile/themes/news/meldungen/pr_2012_02_14_conti_econtact_en,version=2.html

Other companies are thinking

in a similar direction

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BCP Concept Strategic Planning Portfolio

Management Concept

Application & Solution

Go-To-Market

• Majority of hybrid cars today are still "micro hybrids"

• "An electrical car is an energy crisis on wheels"

• Energy consumption, weight and space are of key relevance

• Lighting (front / rear ) has become a key differentiator

Collection and validation of insights:

Source: Internet

100% electrical cars

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BCP Application

& Solution

Strategic Planning Portfolio

Management Concept

Application & Solution

Go-To-Market

+ -

Halogen (Reflection) Low costs

Standardized building blocks

"Price-Performance-Ratio"

High power consumption

"old fashioned style"

LED – low end Style

"LED-inside"

Lowest power consumption

Non-standardized building

blocks (engineering effort)

Beam performance

Price (compared to halogen)

LED – high end Sophisticated style

"LED-inside"

Beam performance

Low power consumption

Non-standardized building

blocks (engineering effort)

Weight/Size

High Price

Xenon 25W Style (projection + bluish light)

"Xenon-inside"

Beam performance

Medium power consumption

Standardized building blocks

Price (compared to halogen)

Potential technical solutions for HB/LB (e-cars):

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BCP Application

& Solution

• Xenon look & safety

• Outperforms halogen

• Compactness of halogen system

• Weight & energy reduced

• Easy mounting

• Regulated and standardized

Strategic Planning Portfolio

Management Concept

Application & Solution

Go-To-Market

Philips D5S at a glance

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with standard Halogen Light

Safety & Comfort ?

Halogen Halogen

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with Xenon Light:

• Longer beam

• Wider beam

• Daylight color

Safety & Comfort !

D5S

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BCP Go-To-

Market

Strategic Planning Portfolio

Management Concept

Application & Solution

Go-To-Market

Demo e-car of TU/e

equipped with Philips

25W Xenon D5S

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“Innovation distinguishes between a leader

and a follower.” Steve Jobs

Thank you very much for your attention !

Questions ?