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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......................................................

philips.com Revenue / turnover 9. a decrease of 4. Philips Healthcare operates in more than 100 countries across the globe. The operating profit of the company was E456 million (approximately $606 million) in FY2014. KEY FACTS Head Office Philips Healthcare 3000 Minuteman Road Andover Massachusetts 01810 1099 USA Phone 1 978 659 3000 Fax Web Address http://www.3% compared with FY2013. Massachusetts. The company recorded revenues of E9.186 million (approximately $12. treatment. is one of the leading providers of medical systems for screening and diagnosis.Philips Healthcare Company Overview COMPANY OVERVIEW Philips Healthcare (or 'the company').065 people as on December 31.186. professional healthcare systems.2 million) during the financial year ended December 2014 (FY2014). It is headquartered in Andover. health management and monitoring. a business sector of Koninklijke Philips (Philips). a decrease of 65.healthcare. imaging systems and clinical care systems.0 (EUR Mn) Financial Year End December Employees 37.208.1% compared with FY2013. The company's product and service portfolio consists of home healthcare solutions.065 Philips Healthcare © MarketLine Page 3 . and employed 37. 2014.

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

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

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

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

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

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