How Philips Exploits Its Technology Edge

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How Philips exploits its technology edge Strategic Management, 5th Edition 2009, Richard Lynch Executive Summary Although the research of Philips will remain an important driving force in realizing its vision, to become an even better market-driven and people-centric health and Well-being Company. It will continually have to evaluate key issues and trends in society to ensure that people’s needs are at the heart of their innovations, now and in the future. It is clear from the Case Study that there is still a lot of room for improvement. The company needs to move towards formulating the purpose from the knowledge, technology and innovation this can be done by balancing the “market pull‟ and “technology push‟ Philips management will therefore need to utilise the knowledge gained from the various research projects more effectively, this can be done by: 1. Converting and the communication of existing knowledge. This can take place through four mechanisms i.e. socialisation, externalisation, combination and internalisation. All four processes relate to the basic distinction between tacit and explicit knowledge existing in the organisation 2. Knowledge creation and acquisition processes The development and circulation of new knowledge, offers a dynamic strategic opportunity. There are three mechanisms, organisational learning, knowledge creation and acquisition, and knowledge transfer 3. Knowledge transfer processes In order for knowledge to be utilized effectively it needs to be shared with the relevant people. Questions and Answers Question 1: What three methods has the company introduced to exploit its research base? The first method Philips has introduced is to link the six divisions of the company with its scientists. To partly accomplish this they make the divisions pay for the research

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