In the past, Phillips Inc. had diversified interests which were looked after by numerous divisions. The lack of inter-divisional communication did inculcate teamwork and therefore, information and experiences were not shared to thrash out the low performance of the organization. The company also lacked effective organizational leadership which could provide the workforce with focused approach and well defined visions and mission so that organizational goals could be achieved with more enthusiasm. The new EO was able to address these problems.
Using a focused approach, Kleisterlee, reorganized the company into three major divisions which had defined goals and objectives: healthcare; lighting; and consumer lifestyle products. The company initiated well planned divestiture program and at the same time, aggressive merger and acquisition facilitated value addition to the products and services of the company. Kleisterlee also realized the vital importance of effective marketing strategies and therefore introduced mixed market strategy, based on innovation, brand creation and flexible approach with more dynamic strategic goals to meet the emerging new challenges.
The major weakness of the new strategy was the problems with the brand creation because its brand creation strategy was not uniform across the globe and its products and services were marketed under different brand name in other countries like America. While the three new divisions had individual goals and objectives, there was distinct lack of communication amongst them that could jeopardize the long term vision of Phillips Inc.
The major strength of the new strategy was that it was focused around the vital factors that significantly impacted its performances vis-à-vis global competition. It realized that innovation is key issue in technology arena and promoted the decision on business relationship vis-à-vis business partnership through collaboration, acquisition and mergers