How Philips is Winning the Lighting Wars

“Embracing an energy efficient policy framework for lighting solutions provides more than economic benefits; it also has an immediate impact on environmental conservation – if new lighting technologies were adopted with a realistic cut of 40% throughout the world, it’s equivalent to the output of 500 medium sized power stations..."
-Meech Aspden, CEO for Philips New Zealand.

December 13, 2007 —

In business, there occasionally comes a time when competitors stop elbowing for marginal points of market share—a la Coke and Pepsi—and fork off into two entirely different innovative directions. In the 1990s, Toyota decided that the best way to beat Detroit wasn't to build the bigger SUV, but to build the most fuel efficient car. Oil prices hovering around $100 a barrel have proven the wisdom of that Toyota's approach.

A similar but less talked about eco-business victory is Philips' slaying of the mighty General Electric to become the United State's largest lighting supplier. The story is profiled in the latest issue of BusinessWeek as a another fine example of ingenuity and foresight combining to produce a more responsible and profitable product.

When Philiips decided to switch the emphasis of their lighting division away from incandescent bulbs, they realized that the increased efficiency and longer lifetimes of the alternatives would cut into replacement sales. The solution for Philips was to diversify the their lighting division to emphasize installation and retrofitting products and services. With the entire developed world currently in the process of changing its lighting systems—and the possibility that many countries will soon ban incandescent bulbs—Philips is now positioned to dominate the lighting industry.