CHAPTER 2

Daring — Group Creativity

At the beginning of the millennium the world witnessed the “dot-com bubble” crisis. Philips was incurring a net loss of EUR 3,206 million in the year 2000. Top management was focused on dissolving the Components business, returning the Semiconductor business to profitability, simplifying the corporate organization, and working on massive cost savings.

For many decades Philips Lighting, the firm’s oldest business sector, had been Philips’ “cash cow.” It operated in a mature, low-growth oligopoly market with two main competitors capitalizing on a set of well-known technologies and managing a highly sophisticated process industry. The innovation process had a value creation angle: product innovation focusing on ...

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