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Philips Healthcare

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

208. professional healthcare systems. a decrease of 65. Massachusetts.com Revenue / turnover 9.Philips Healthcare Company Overview COMPANY OVERVIEW Philips Healthcare (or 'the company'). is one of the leading providers of medical systems for screening and diagnosis.065 Philips Healthcare © MarketLine Page 3 .065 people as on December 31.1% compared with FY2013. The company recorded revenues of E9. The operating profit of the company was E456 million (approximately $606 million) in FY2014. 2014.186 million (approximately $12.3% compared with FY2013.philips. treatment. a decrease of 4. The company's product and service portfolio consists of home healthcare solutions. imaging systems and clinical care systems.2 million) during the financial year ended December 2014 (FY2014). Philips Healthcare operates in more than 100 countries across the globe.0 (EUR Mn) Financial Year End December Employees 37. KEY FACTS Head Office Philips Healthcare 3000 Minuteman Road Andover Massachusetts 01810 1099 USA Phone 1 978 659 3000 Fax Web Address http://www. a business sector of Koninklijke Philips (Philips). It is headquartered in Andover.healthcare.186. health management and monitoring. and employed 37.

one of the leading companies in body temperature management. has helped Philips extend its imaging business to image-guided intervention and therapy.Philips Healthcare SWOT Analysis SWOT ANALYSIS Philips Healthcare (or 'the company'). a part of Koninklijke Philips. treatment. the 2009 acquisition of Canada-based Traxtal. the Traxtal acquisition has made Philips one of the leading solution providers for image-guided procedures. Coupled with its strong position in medical imaging. 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. and also bridged its care cycle strengths in diagnosis and management. cost containment measures in the US Health Care Reform Act could affect the demand for the company's healthcare products. Further. the acquisition of US-based InnerCool Therapies. Philips' strategy of acquiring small. is engaged in the manufacture and marketing of medical systems for screening and diagnosis. The company's acquisition of small and complementary businesses has enabled it to expand its healthcare business portfolio. health management and monitoring. However. has helped the company broaden its offerings in emergency care. Philips Healthcare © MarketLine Page 4 . For instance. 'tuck-in' businesses supports its growth initiatives. a provider of minimally invasive instruments and software for image-guided intervention and therapy.

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

In May 2015. Such product recalls could affect the consumer confidence in the company's products and its brand image. if the system had been powered on for over 12 hours. acquired Volcano Corporation (Volcano). software and services.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. 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. 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. It also offers a suite of peripheral therapeutic devices. However. 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. in April 2015. 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. the system would no longer emit this signal. manufacturing and selling medical imaging devices for cardiovascular care and other specialties. the company recalled DigitalDiagnost System XRay designed to emit a beep upon termination of an exposure.Volcano’s acquisition also complements Philips Healthcare’s portfolio of interventional X-ray and ultrasound imaging equipment. Launch of new products may strengthen the company’s product portfolio Philips Healthcare © MarketLine Page 6 . and physiology. Volcano offers physicians and their patients around the world with tools that aid diagnosis and guide and provide therapy. This in turn would help Philips Healthcare in enhancing its customer base. Earlier in November 2014. As stated by the company. Volcano is one of the leading companies in intravascular imaging for coronary and peripheral applications. navigation systems. Customers were asked to discontinue use and dispose of all Gel-E Donut gel pillow and Squishon 2 gel cushion products in their facility. a US-based company engaged in developing. This acquisition would create new sources of recurring revenue streams for the company. Royal Philips. the parent company of Philips Healthcare. For instance. Opportunities Acquisition of Volcano may enhance the company’s customer base In February 2015.

cardiac ultrasound. Hence. By reviewing data from CareSage’s analytics and the wearable medical alert devices. Philips Healthcare. Furthermore. offering both invasive and noninvasive ventilation. the demand for innovative. cardivasculor Philips Healthcare © MarketLine Page 7 . Between 2005 and 2050. in the more developed regions. Focusing initially on the needs of US cancer centers. By combining AIUS with the power of HeartModel. 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.Philips Healthcare SWOT Analysis The company has launched several new products in the recent past. Health systems are looking for solutions to provide an effective way to an accurate diagnosis. “solution as a service” delivery model. being a global leader in the areas of home healthcare. health systems can predict when their at-home patients are likely to be hospitalized and intervene in advance. the demand for healthcare services and more importantly. services and resources for a digital program and eliminate capital expenditures related to the transition. 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. 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. For instance . Partnership with Inspirata may help the company advance digital pathology in the US In March 2015. Philips Canada launched Philips Respironics V680 Ventilator for hospital respiratory care. half of the increase in the world population will be accounted for by a rise in the population aged 60 years or over. Philips Lifeline introduced CareSage. In June 2015. As the global population ages. the creation of improved insights and algorithms would help pathologists in better informed decision making. Philips launched HeartModel. As reported by the company. in April 2015. Philips Healthcare and Inspirata. Built on the foundation of Philips’ innovation and experience in clinical informatics. partnership with Inspirata may help the company in advancing its digital pathology business in the US. a new anatomically intelligent ultrasound (AIUS) tool that brings advanced quantification. 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. Inspirata’s managed service model would supply the necessary IT infrastructure. In May 2015. automated 3D views and reproducibility to cardiac ultrasound imaging. dual-limb system. Launch of such new products is likely to strengthen the company’s product portfolio. the population aged 60 or over is expected to nearly double from 245 million in 2005 to 406 million in 2050. 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.

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

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