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Philips Healthcare

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...........................................................................................3 SWOT Analysis................................................3 Key Facts..................................Philips Healthcare TABLE OF CONTENTS TABLE OF CONTENTS Company Overview..........................................................................................................................4 Philips Healthcare © MarketLine Page 2 ............

Massachusetts. a business sector of Koninklijke Philips (Philips).3% compared with FY2013. and employed 37.2 million) during the financial year ended December 2014 (FY2014). Philips Healthcare operates in more than 100 countries across the globe. 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 decrease of 4. professional healthcare systems.208. The operating profit of the company was E456 million (approximately $606 million) in FY2014.1% compared with FY2013. 2014. is one of the leading providers of medical systems for screening and diagnosis.065 Philips Healthcare © MarketLine Page 3 .186. It is headquartered in Andover.065 people as on December 31. imaging systems and clinical care systems. The company's product and service portfolio consists of home healthcare solutions.philips. health management and monitoring. treatment. a decrease of 65.healthcare. The company recorded revenues of E9.Philips Healthcare Company Overview COMPANY OVERVIEW Philips Healthcare (or 'the company').com Revenue / turnover 9.186 million (approximately $12.0 (EUR Mn) Financial Year End December Employees 37.

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

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

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. Earlier in November 2014. Such product recalls could affect the consumer confidence in the company's products and its brand image. a US-based company engaged in developing. navigation systems. However. This acquisition would create new sources of recurring revenue streams for the company. Volcano offers physicians and their patients around the world with tools that aid diagnosis and guide and provide therapy. Opportunities Acquisition of Volcano may enhance the company’s customer base In February 2015. manufacturing and selling medical imaging devices for cardiovascular care and other specialties. 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. 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. acquired Volcano Corporation (Volcano). 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. This in turn would help Philips Healthcare in enhancing its customer base. 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. Volcano is one of the leading companies in intravascular imaging for coronary and peripheral applications. For instance. In May 2015. and physiology. even if mold was not visible. As stated by the company. It also offers a suite of peripheral therapeutic devices. if the system had been powered on for over 12 hours. the company recalled DigitalDiagnost System XRay designed to emit a beep upon termination of an exposure. Customers were asked to discontinue use and dispose of all Gel-E Donut gel pillow and Squishon 2 gel cushion products in their facility.Volcano’s acquisition also complements Philips Healthcare’s portfolio of interventional X-ray and ultrasound imaging equipment. the parent company of Philips Healthcare. the system would no longer emit this signal. software and services. Royal Philips. Launch of new products may strengthen the company’s product portfolio Philips Healthcare © MarketLine Page 6 .

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

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

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