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Philips Healthcare

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PUBLICATION DATE: 22 Jan 2016
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.............................................................................3 SWOT Analysis.........................................................................Philips Healthcare TABLE OF CONTENTS TABLE OF CONTENTS Company Overview..............................................................................4 Philips Healthcare © MarketLine Page 2 ...........3 Key Facts....................................................................

a decrease of 4. Massachusetts. a decrease of 65.186 million (approximately $12. The operating profit of the company was E456 million (approximately $606 million) in FY2014.3% compared with FY2013. The company recorded revenues of E9. 2014.2 million) during the financial year ended December 2014 (FY2014). The company's product and service portfolio consists of home healthcare solutions. Philips Healthcare operates in more than 100 countries across the globe.065 people as on December 31.healthcare.065 Philips Healthcare © MarketLine Page 3 .208. KEY FACTS Head Office Philips Healthcare 3000 Minuteman Road Andover Massachusetts 01810 1099 USA Phone 1 978 659 3000 Fax Web Address http://www.philips.186. treatment. a business sector of Koninklijke Philips (Philips).1% compared with FY2013. professional healthcare systems. health management and monitoring. and employed 37. imaging systems and clinical care systems. It is headquartered in Andover. is one of the leading providers of medical systems for screening and diagnosis.Philips Healthcare Company Overview COMPANY OVERVIEW Philips Healthcare (or 'the company').0 (EUR Mn) Financial Year End December Employees 37.com Revenue / turnover 9.

Philips Healthcare SWOT Analysis SWOT ANALYSIS Philips Healthcare (or 'the company'). The company's acquisition of small and complementary businesses has enabled it to expand its healthcare business portfolio. and also bridged its care cycle strengths in diagnosis and management. For instance. the 2009 acquisition of Canada-based Traxtal. the acquisition of US-based InnerCool Therapies. Philips' strategy of acquiring small. health management and monitoring. However. Strengths Weaknesses Small 'tuck-in' acquisitions enabling Philips Healthcare to tap growth opportunities Strong presence in lucrative home healthcare market Simplified business portfolio Product recalls may affect the company's brand image Opportunities Threats Acquisition of Volcano may enhance the company’s customer base Launch of new products may strengthen the company’s product portfolio Partnership with Inspirata to advance digital pathology in the US Aging world population likely to spur demand for healthcare products and services Healthcare reform in the US may affect the company's business Stringent reimbursement rules and regulations Strengths Small 'tuck-in' acquisitions enabling Philips Healthcare to tap growth opportunities In the healthcare sector. the Traxtal acquisition has made Philips one of the leading solution providers for image-guided procedures. has helped Philips extend its imaging business to image-guided intervention and therapy. one of the leading companies in body temperature management. a provider of minimally invasive instruments and software for image-guided intervention and therapy. cost containment measures in the US Health Care Reform Act could affect the demand for the company's healthcare products. a part of Koninklijke Philips. Further. 'tuck-in' businesses supports its growth initiatives. treatment. has helped the company broaden its offerings in emergency care. Coupled with its strong position in medical imaging. Philips Healthcare © MarketLine Page 4 . is engaged in the manufacture and marketing of medical systems for screening and diagnosis.

Philips's healthy life platform addresses the need for healthy. and shifting patient care strategies toward home settings. Philips further strengthened the innovation capabilities and product portfolio of Philips' respiratory drug delivery activities within its Home Healthcare Solutions business in 2014 by obtaining a technology license and acquiring select assets solely related to Aerogen's home-care business. Philips works together with its clinical provider customers to improve the quality of life for at-risk individuals in the home through better awareness. monitoring and management of their conditions. diagnosis. a provider of imaging equipment parts. For example. medical alert services. the company expanded its position in the anesthesia market with the acquisition of Danish anesthesia firm Dameca.Philips Healthcare SWOT Analysis The acquisition of Sectra's mammography equipment line has strengthened Philips Healthcare's women health portfolio. Aerogen is a privately-owned respiratory drug delivery company headquartered in Ireland. the company has designed new Trilogy100 portable at-home lifesupport ventilator to be simple to use and live with. The company has further expanded its capabilities in imaging equipment services through the acquisition of All Parts Medical. treatment. Philips focuses on the range of medical issues associated with oncology. treating and monitoring patients in their homes rather than in hospitals. The home healthcare solutions business of Philips Healthcare offers sleep management and respiratory care. It has directed its focus on six platforms including professional healthcare. high health care spending intensity. improve clinical outcomes. The acquisition of Respironics has put Philips Healthcare at the forefront of the fast-growing market for home healthcare solutions. there is a gradual shift towards diagnosing. and reduce healthcare cost. Simplified business portfolio Philips has fundamentally simplified its business portfolio across its sectors including Healthcare since 2000. And the personal care platform focuses on consumers' need to be fit. widespread insurance coverage. cardiology and women's health. and healthy life/personal care.The company further solidified its presence in home healthcare solutions with the acquisition of the aerosol therapy business of Medel in Italy. Philips is engaged in the development of solutions that help improve the way both patients and professionals experience healthcare. Philips' wearable Activity Monitor records the person's daily movements and transfers the information to a webpage that keeps track of the person's progress against longer-term goals. The rising number of elderly people and the subsequent growth in the incidence of chronic diseases is also driving the demand for home healthcare. For instance. caring relationships. Philips Healthcare © MarketLine Page 5 . Strong presence in lucrative home healthcare market Given the escalating healthcare costs in many markets and increased emphasis on both efficiency and patient comfort. remote cardiac services and remote patient management services. Further. At the home healthcare front. In the professional domain. Respironics (now Philips Respironics) is one of the leading US-based global providers of innovative respiratory and sleep therapy solutions for both hospital and home use. home healthcare. The US is expected to remain the largest market globally based on its extensive network of home health care providers.

Volcano acquisition is an important milestone in its strategy to become one of the leading systems integrator in the growing image-guided minimally invasive surgery market and accelerate the growth in that market. Earlier in November 2014. the system would no longer emit this signal. In May 2015. Customers were asked to discontinue use and dispose of all Gel-E Donut gel pillow and Squishon 2 gel cushion products in their facility. This in turn would help Philips Healthcare in enhancing its customer base. it recalled Computed Tomography Systems after finding that a software defect exists in marketed product wherein the sign indication of the longitudinal position of some types of scan is inverted. even if mold was not visible. if the system had been powered on for over 12 hours. the company issued a recall of all Gel-E Donut gel pillow and Squishon 2 gel cushion products due to potential mold contamination of the products. For instance. Such product recalls could affect the consumer confidence in the company's products and its brand image. in April 2015. and physiology. The combination of Volcano’s portfolio of imaging and measurement catheters and Philips Healthcare’s interventional imaging solutions would allow the company to provide customers with an integrated solution to improve procedural outcomes at a decisive stage in the health continuum. Royal Philips. Volcano is one of the leading companies in intravascular imaging for coronary and peripheral applications. the parent company of Philips Healthcare. the company recalled DigitalDiagnost System XRay designed to emit a beep upon termination of an exposure. navigation systems.Volcano’s acquisition also complements Philips Healthcare’s portfolio of interventional X-ray and ultrasound imaging equipment. As stated by the company. manufacturing and selling medical imaging devices for cardiovascular care and other specialties. Launch of new products may strengthen the company’s product portfolio Philips Healthcare © MarketLine Page 6 . acquired Volcano Corporation (Volcano). a US-based company engaged in developing.Philips Healthcare SWOT Analysis Weaknesses Product recalls may affect the company's brand image The company has recalled several of its products in the recent past. It also offers a suite of peripheral therapeutic devices. However. Volcano offers physicians and their patients around the world with tools that aid diagnosis and guide and provide therapy. This acquisition would create new sources of recurring revenue streams for the company. Opportunities Acquisition of Volcano may enhance the company’s customer base In February 2015. software and services.

the population aged 60 or over is expected to nearly double from 245 million in 2005 to 406 million in 2050. a new predictive analytics engine that enables health systems to monitor and care for elderly patients by combining insights with wearable devices and monitoring. more sophisticated means of delivering those services increases. offering both invasive and noninvasive ventilation. Philips Healthcare. the demand for healthcare services and more importantly. the creation of improved insights and algorithms would help pathologists in better informed decision making. the Philips Respironics V680 Ventilator is the first ventilator to combine the Philips gold standard single-limb noninvasive ventilation (NIV) solution with a fully featured. in April 2015. Between 2005 and 2050. dual-limb system. Launch of such new products is likely to strengthen the company’s product portfolio. a provider of a cancer diagnostics solution that digitizes and automates the entire pathology workflow using a unique. entered into a joint development agreement to advance digital pathology through the development of advanced image analytics and automated workflows available as a solution-as-a-service delivery model. Philips Canada launched Philips Respironics V680 Ventilator for hospital respiratory care. In June 2015. in the more developed regions. Partnership with Inspirata may help the company advance digital pathology in the US In March 2015. As reported by the company. Aging world population likely to spur demand for healthcare products and services The populations across the globe are aging rapidly as a result of declining fertility and increasing longevity. Built on the foundation of Philips’ innovation and experience in clinical informatics. Philips Healthcare and Inspirata. the demand for innovative. a new anatomically intelligent ultrasound (AIUS) tool that brings advanced quantification. cardivasculor Philips Healthcare © MarketLine Page 7 . As the global population ages. Furthermore. half of the increase in the world population will be accounted for by a rise in the population aged 60 years or over.Philips Healthcare SWOT Analysis The company has launched several new products in the recent past. cardiac ultrasound. Inspirata’s managed service model would supply the necessary IT infrastructure. Philips launched HeartModel. In May 2015. By reviewing data from CareSage’s analytics and the wearable medical alert devices. being a global leader in the areas of home healthcare. partnership with Inspirata may help the company in advancing its digital pathology business in the US. health systems can predict when their at-home patients are likely to be hospitalized and intervene in advance. “solution as a service” delivery model. services and resources for a digital program and eliminate capital expenditures related to the transition. For instance . the company is using automatic quantification and intelligence and an image quality to bring more diagnostic confidence to cardiac procedures and to create more reproducible results. Health systems are looking for solutions to provide an effective way to an accurate diagnosis. automated 3D views and reproducibility to cardiac ultrasound imaging. Focusing initially on the needs of US cancer centers. Philips Lifeline introduced CareSage. By combining AIUS with the power of HeartModel. Hence.

known as false claims law. those that prohibit unlawful inducements for the referral of business reimbursable under federally-funded healthcare programs. is well positioned to gain from the increasing demand for healthcare services. Philips Healthcare © MarketLine Page 8 . The Congressional Budget Office estimates that the total cost to the medical devices industry could exceed $20 billion over 10 years. The principal US federal laws implicated include those that prohibit the filing of false or improper claims for federal payment. In addition. or when a customer submits a claim for an item or service that is reimbursed under a US federal government funded healthcare program. The legislation also permits the establishment of accountable care organizations. and may lead Philips Healthcare's customers to reduce their orders for products or they may request to reduce the prices in order to offset the tax. This tax may put increased pressure on medical device manufacturers and purchasers. The US federal government healthcare laws apply when the company submits a claim on behalf of a US federal healthcare program beneficiary. which in turn could adversely affect its brand image and business operations. a new healthcare delivery model. Threats Healthcare reform in the US may affect the company's business Government oversight of and attention to the healthcare industry in the US is significant and increasing.Philips Healthcare SWOT Analysis X-ray and patients monitoring markets among several others. Foreign governments also impose regulations in connection with their healthcare reimbursement programs and the delivery of healthcare goods and services. the US federal legislation was enacted to reform healthcare. which started in 2013. the legislation established the Independent Payment Advisory Board. and those that prohibit healthcare service providers seeking reimbursement for providing certain services to a patient who was referred by a physician that has certain types of direct or indirect financial relationships with the service provider. such as Medicare or Medicaid. including the Centers for Medicare & Medicaid Services (CMS) as well as comparable state and foreign agencies responsible for reimbursement and regulation of healthcare goods and services. which will be responsible annually to submit proposals aimed at reducing Medicare cost growth while preserving quality. In 2010. Phillips Healthcare's failure to adapt to these changes can have a negative impact on its business. known as the Stark law. one of the components of the new law was a 2. The non-compliance of laws and regulations by the company and its officers and employees could subject it to severe criminal and civil penalties. various industry participants including medical equipment companies are asked to contribute fee to the Act. Further. For the implementation of healthcare reform measures. Stringent reimbursement rules and regulations Phillips Healthcare's devices are subject to regulation regarding quality and cost by the US Department of Health and Human Services (HHS). known as the anti-kickback laws.3% excise tax on sales of most medical devices.

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