As we have highlighted previously — for example with the case of the Volkswagen Eos — companies that understand that they are not in the business of selling certain products or services, but rather in the business of delivering lifestyle enrichment to customers, are the ones that create blue oceans. An example of this Blue Ocean Strategy-like thinking comes from a recent BusinessWeek article on Philips. The 117-year-old Dutch company, better known for making everything from home electronics and small appliances to high-tech medical diagnostic systems, is undergoing a metamorphosis: Transforming itself from a high-volume maker of consumer electronics to a design-led company focused on health and well-being — a strategy that Philips Chief Executive Gerard Kleisterlee believes will open up growth opportunities in both developed and developing markets.
From a recent BusinessWeek article:
The US$38 billion diversified Dutch giant hopes to give its newly created Consumer Lifestyle business a bit of a buzz with the launch of a new product category known as "relationship care." On Sept. 10, the unit will launch its first new product, initially in Britain and later elsewhere: a range of intimate massagers aimed at couples between the ages of 35 and 55.
The new range of products will be sold first at British pharmacy chain Boots and upscale department store Selfridges, and over the Internet via Amazon.com (AMZN). Aimed at couples who might normally be unwilling to enter sex shops, the massager range comes in discreet packaging that wouldn't look out of place on the store shelf next to, say, hair dryers or cordless shavers.
With a retail price of more than $150, the massagers aren't cheap. But Philips says what makes its new product unique is a focus on the couple, not the individual. The ergonomically designed device comes in two abstract shaped parts, each no bigger than the palm of a hand, which can be stored in a small black recharging case. "We wanted to focus on couples because our research showed there was a large unmet need," says Sheila Struyck, head of market-driven innovation at Philips in Amsterdam. "We were looking for products that wouldn't replace one or the other partner."
The idea to move into relationship care was first mooted among members of Philips' advisory "Simplicity Board" more than two years ago. The panel of outside experts (BusinessWeek, 12/11/06), which included a Chinese architect, a British fashion designer, and two Americans (a graphic designer and a radiologist), suggested that if Philips intended to focus on health and well-being, it made sense to explore interpersonal well-being.
[Image via Philips.]