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Philips Indal

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INDIVIDUAL WRITE-UP #2

“Philips – Indal: The deal from Heaven”

Strategy II

Professor João Silveira Lobo

João Pedro Azevedo Teixeira Guedes Monteiro #2772

November 25th, 2015
It is paramount to refer that in 2011 the new CEO (Frans Van Houten) changed the path of the company with a new strategy that requested for a modification in the structure of Philips. The case Philips-Indal presents an acquisition situation where Philips, a Dutch Electronics company, integrates Indal, a Spanish lightning company. Due to the difficulties of M&A processes a New Venture Integration (NVI) team needed to create a “Sales Integration Approach” (SIA) in order to integrate properly both companies and create sales synergies. Regarding Spanish market and the 4th set of SIA (Market Growth and Integration Plan) there are two possible layouts to choose:
Full integration Model: consists on a fully integration of Indal into existing Philips organization PROS | Production oriented and distribution network with higher effectiveness Boosts cost synergies Less accounting managers reporting to the superiors leading to a better communication (Less FTE)Higher level of control and less complexityEasier implementation of a global corporate culture | CONS | Lower market knowledge and lack of product development strategy Low autonomy leading to lack of flexibilityHigher impact in performance if some crisis or failure occurs due to centralization (easier propagation of a problem through the all company)Reduced flexibility among region departments that can be essential to revenue | * Six-region Model: merge the two companies into one by organizing around six regions PROS | Customer centricity easier to achieve (due to the ease of implementation of a Bottom-up Model)Better and more focused after sale service creating bounds with customers More restricted or specific target

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