Tuesday, March 6, 2012

RANGAN Subramanian, WEIDINGER Matthias
Building Cost Competitiveness at the New Philips: The Need for Collaborative Leadership
© 2012 INSEAD Case Study

This case investigates how Philips became a globally integrated enterprise - how it “de-risked” its business and internationalized its supply chain (moving most production from Europe to Asia). The objective is to highlight the factors and analysis involved in “location cost economics.” (The case is developed around the leadership of INSEAD alumna and board member Barbara Kux.)

Pedagogical Objectives: The case objective is to explore foreign sourcing and to highlight production, transaction and location cost economics in the geographic configuration of economic activities. It allows outlocating and outsourcing to be discussed in a familiar industry context (with a familiar company). It also explores key dilemmas that a vertical multinational must address: Where to locate economic activities? Which economic activities are suitable for out-locating? What about outsourcing?