a sustainable strategy for the turkish market willem rozenberg ceo philips turkey
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A sustainable strategy for the Turkish market Willem Rozenberg CEO Philips Turkey. Introduction. Recent visit to Bodrum Common feeling with all expatriates in Turkey Extremely welcome Business is not easy. 58 years old Married Exploding family 33 years in Philips - PowerPoint PPT PresentationTRANSCRIPT
A sustainable strategy for the Turkish market
Willem RozenbergCEO Philips Turkey
Introduction
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Recent visit to Bodrum
Common feeling with all expatriates in Turkey
Extremely welcomeBusiness is not easy
58 years oldMarriedExploding family
33 years in Philips25 years expatriate (Riyadh, Dubai, Johannesburg and Istanbul)6 years in TurkeyAlways in Healthcare
4 girls
5 grandchildren
Founded in 1891Headquartered in Amsterdam, the Netherlands
Sales over EUR 22.2 billion in 2010
Growth geographies32% of sales generated in growth geographies Globally recognized brand (world top 50)Our brand value doubled to $8.7bn since 2004
117,000 employeesSales and service outlets in over 100 countries
€1.5 billion investment in R&D, 7% of sales
A strong diversified industrial group leading in health and well-being
Note - All figures from the year 2010 onwards exclude Television as it is treated as discontinued operation
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The four global trends that are becoming increasingly relevant
The rise of growth geographies
Aging population
Increased consumer empowerment and
sustainable lifestyles
Climate change and sustainable development
Our focus on Health and Well-beingOur portfolio leverages critical global trends
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5Rise of growth geographies
Aging population
Increased consumer empowerment and sustainable lifestyles
Climate change and sustainable development
Western Europe
North America
BIC
Growth1 of markets in which Philips participates vs. GDP growth
1. Excluding TV2. Based on internal analysis
Market size growth2
GDP3
World
~ 20%
~ 30%
~ 50%
Consumer Lifestyle
Lighting
Healthcare
We expect our markets to growMost growth expected to come in lighting and healthcare markets
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100%
…translating into expected market growth per sector…
4
CAGR5 % 2010-2015
3. EIU estimates4. Brazil, India, China5. CAGR: Compound Annual Growth Rate
~ 2%
161
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Growth geographies are a key growth opportunity driven by rapid expansion of the middle class
Middle class households growth in key growth geographies Millions of households1
2015
419
2009
• Philips sales show a strong correlation with middle class
• The number of middle class households in key growth geographies will more than double until 2015
• The total middle class income pool in growth geographies will almost double until 2015
• Our sectors will benefit strongly from the rise of the middle class in growth geographies :
• Increasingly affordable healthcare which will drive demand
• Building of new and better housing and other infrastructure increasing demand for lighting
• Increasing demand for a higher quality, and healthier lifestyle
Source: Internal analysis* CAGR: Compound Annual Growth Rate
+17%CAGR*
Sustainability as a driver for growth
Success of EcoVision4Our Green Product sales represented around 30%
of sales in 2009, 3 years ahead of our 2012 target. And we have completed our 2012 goal of cumulative EUR 1 billion of Green Investment in 2010.
Launch of our EcoVision5 program A clear example of how we continue to drive
business growth through Sustainability is the launch of our EcoVision5 program in 2010.
Targets for the period 2010 – 2015• To bring care to 500 million people• To improve the energy efficiency of our overall
portfolio by 50%• To double the amount of recycled materials in
our products as well as to double the collection and recycling of Philips products
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A sustainable strategy for Turkey
The market
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Characteristics:• 76 m people with large young population • Increasing awareness• Developing fast GDP growth / in 2010: 7,1%
• High growth potential, Expected to become the 3rd largest European economy by 2050 (Goldman Sachs)• Diverse public and private market
• Upcoming PPP, PFI, BOT models• Centralization and e-tendering• Privatisation – investments
Competition:• Almost everybody• Large number of local players
Turkey the 17th largest economy in the world
Annual GDP growth:
2003 - 2007 6.4% annual average2008 0.7% 2009 4.7%
2010 forecast 7.1%.
Testing global trends in Turkey – Aging and Health
The age structure of Turkey is relatively younger compared to others, an increase of the elderly population in “absolute numbers” is noticeable though:Population over age 65 will be: 4.8 million in 2010
7.9 million in 202517 million in 2050 (Source TURKSTAT)
Health Indicators:Life expectancy at birth: M/F 71 / 75 TurkeyHealthy life expectancy at birth M/F: 61 / 63
Life expectancy at birth M/F 76 / 82 EU AverageHealthy life expectancy at birth M/F: 61 / 62
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Total expenditure on health 6.7% of GDP (2009) vs. NL 9.9% (2008)
Turkey’s demand for electricity grows at a rate of 8% per year.
Current energy import: 60%2010-15 70% 2020 80%
Since 1923, every 10 years Turkey’s temperature has increased by 0.20C* Source ENO Climate
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Testing global trends in Turkey – Energy & Climate
• Increased consumer empowerment, growing of middle and upper income segments
• Doubled R&D expenditures in the past decade *Source Worldbank.org
• Construction industry may achieve a growth of >20% in 2010 with a regional focus *SourceHürriyet Daily
• Strong governmental and private vision and commitment to health sector modernization *Source Worldbank.org
All in line with the Philips Market Stategy, which helps to reach a strong growth for us in Turkey.
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Testing global trends in Turkey – Increased consumer empowerment & key growth area’s
Philips in Turkey
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Founded in 1930 Headquartered in Istanbul. Regional offices in Ankara, İzmir, Adana
Employees300 people in sales and service outlets all over Turkey
Leading market positions- LED lighting, energy saving lamps, ambient solutions- Medical Imaging (Cardiology, PETCT, MR)- Fruit-Juicer , Irons, MP3 player and docking stations, high-end TV, shavers, hair-care
Brand Image in Turkey- 7th position (brand equity index Turkey)- Long term commitment- Reliable, innovative, outstanding quality
Philips Index for Health and Well-beingA global initiative - 31000 people across 23 countries
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Philips is a pioneer in developing and bringing to market innovations that shape our healthcare, our lifestyle, and whowe are as a society. Doing so means we need to understand the mega-trends in society.
These include:• What is the state of our health and well-being?• What aspects of health and well-being are most important, and how satisfied are people
with each of these aspects of our lives?• What role does technology play in helping society maintain better health and well-being?• How does people vary in terms of their attitudes and behaviors toward health and
well-being?• If we were to assign a particular index as an overall measure of health and well-being,
what would it be and would it vary among different sub-groups of people
• 1000 interviews in 12 cities conducted between Aug- Sept 2010• Turkey’s total index score is 46%• The majority of Turkish people (66%) rate their health and well-being as very good or good.• 65% of Turkish people experience some level of stress• The economy is top of the reasons Turkish people are feeling stress(76%).• Healthcare costs are ranked as the third reason (66%).• 15% of the Turkish people are sleep deprived• Technological equipment being update, improved and state-of-art technology is effective in Turkish people’s hospital preference (89%)• 78% of Turkish people believe that Lighting can have a significant effect on their sense of health and wellbeing• Cancer, heart and vascular diseases and contagious diseases should receive more attention from the government.• Spending time with family and children (37%), spending time with friends (31%) and relaxing at home (30%) are the most popular ways to improve the feeling of
well-being of Turkish people
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Philips Index for Health and Well-beingSome first results
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A granular approach
Brand image
Hi-end / SophisticatedSpecifications
Low-end & economical solutionsPrice focused
Local insightSegmentation
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Specific market requirements
Local insight
Product specifications Price setting
LogisticsVisibility
Brand image
The LED Bridge between Europe & Asia
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Thank you very much for this opportunity