Siemens case study: A Business Strategy Analysis

Question

Task: The purpose of this assessment is to assess your knowledge of the subject area and employ strategy making models and concepts in the analysis of the strategy of an organization.

In this part, you will, in the hypothetical role of a consultant to senior leadership, prepare and submit a business strategy study to the management of your selected organization.

The Siemens case studyessay should be based on an organization. Ideally, this will be the organization that you are currently engaged with as you will not only be familiar with the organization but have access to data and information which can inform your case study. However, it is also possible for you to choose another organization. You may, for example, choose a previous organization that you were involved with or a well known organization or an organization with which you are familiar as a customer or a supplier, etc. and which you can get access to information which will allow you to meet the assessment criteria.

Please note that you may select a non-profit or a non-governmental organization (NGO). Regardless of the organization, you will need access to information to complete the assignment.
The case study essay will also provide a comprehensive set of recommendations and action plans, with supporting reasoning and evidence.

Answer

Siemens case studyPart 2 A: Strategy Report of the Organisation
External strategic analyses
Siemens is a renowned name in the world of healthcare, transport, infrastructure, and different industrial activities by having more than 293, 00 employees and revenue of 55.3 billion Euros. This organisation focuses on providing the best services to its consumers. Empowering people is the most critical part of the organisation (Renews.biz, 2020). Determining the behaviour of the people and success of the foundation is the basic aspects of making corporate strategies and business policies. Following parts are analysing the external and internal strategy of the company.

PESTEL Analysis
This analysis is helpful for Siemens in analysing the external environment for the company, including political, legal, environmental, technological, social, and economic factors.

Political factors
In global politics, corruption, changing policies in business environments, political instability, and unstable relationships between countries in the global market are critical political factors that affect the strategic decision making of the company. Most importantly, the international presence of the company is required to maintain the rules and regulations of local markets along with the global business market to improve the entire condition of work. Therefore, the impact of this external factor is quite effective on the actions and activities of the operational strategies of Siemens (Renews.biz, 2020). The non-profit part of this company works as an essential tool in increasing sustainability and growth towards reaching the organisational goals and objectives more efficiently.

Economic factors
GDP is the most important part of any economy, and this organisation plays a vital role in 200 countries all over the world to generate GDP over 281 billion Euros. At the same time, this company helps in generating revenue of 57 billion Euros in the countries it operates. Therefore, rates of labour market, foreign exchange rates, and interest rates of currencies are critical factors that affect the business procedure and actions in this company. Therefore, the economy of the local and global market plays a crucial role in shaping up the business procedure and activities in this organisation. Therefore, this organisation has the opportunity to utilise the understanding and comprehensive knowledge on a specific area from the perspective of the economy that can help the company to multiply its business growth.

Social factors
It is not possible for any company to expand its business along with running it in a specific area without having its knowledge on the socio-cultural aspects of the specific area. In such a circumstance, social factors, including the procedure of business, leadership style and culture, and resistance level to change of an area can affect the business procedure and operations. Hence, social factors such as women empowerment and equality in organisational setting have helped the company to work efficiently. Moreover, the company has also worked on reaching the target of increasing the female share of the company in top management by 30% by the financial year of 2025.

Technological factors
Technology is the key to success in a business environment, and in this age of advanced technology, Siemens has expanded its business efficiently only on the basis of technological changes. Technology is the core passion and key aspect of this business through digitalisation. This external environment factor has affected the business operations and decision making process in the time of COVID-19 by using the digitalisation related strategies.

Therefore, this company also has the opportunity to improve the entire business procedure by considering the importance of strong cyber security to ensure the safety and security of data in this age of uncertainty and data-theft (Renews.biz, 2020). Therefore, strong technological advancement can only help the company to cooperate in this age of changing technology.

Environmental factors
Environment is no less important factor in the age of globalisation and technology. Most important reason for such a factor is that sustainability and corporate responsibility have become the key aspect of every business. It is not possible for any business organisation to get approval from the government along with getting the support from the competitors and customers without having interests in environmental improvement. Less impact to the environment by working on reduction of carbon emissions and limited usage of water and energy can help the company to become relevant to the society. Along with that, it has also become easy for the company to work on finding long-term goals and procedures to meet sustainable business approaches by considering environmental issues.

Legal factors
Laws and regulations along with the guidelines of work in business areas are critical parts to reach the organisational goals. However, it has been identified in the business environment of Siemens that this company has shown its approach towards making a robust compliance system to maintain the business ethics and rules (Assets.new.siemens.com, 2020). Primary reason for such a fact is that any lawsuit can harm the reputation of the company; however, strategies and planning for a better working environment can help in improving the procedure of work along with the transformation in the working procedure.

Porter’s Five Forces
This analysis is another effective way to analyse the external factors that help in identifying the power of buyers and suppliers regarding bargaining along with the impact of substitute products and new entrants.

Bargaining power of suppliers
Power of suppliers regarding bargaining is quite low as this company has a strong logistical approach aligned with operational perspectives. It has also been identified in the case of this company that research and development approaches of the company have identified small and large-scale scopes to stay activated (Patvardhan and Ramachandran, 2020). Most importantly, availability of alternative options has lowered the impact of this business aspect. Most importantly, open markets to the raw material and supply equipment have made it easy for this organisation to lower the power of the suppliers.

Bargaining power of the buyers
Power of the buyers is quite low in the case of bargaining as higher quality services of this company cannot be obtained anywhere. However, it has also been identified that the products of Siemens are highly personalised and specialised (Renews.biz, 2020). However, the customers cannot get that type of service from any other company. Due to this reason, this organisation has the opportunity to gain the customer loyalty by providing high quality services to the customers in the different areas of business.

New entrants
Threat of new entrants is not new in any business industry; however, it is quite expensive for any company to enter this business field of Siemens in different areas of business along with having so much qualified technologies.

Threat of rivals
Competitors are no less important for Siemens with the name of working in this field with lots of experience, including ABB and GE. However, Siemens is not a poor performer too in the field of acquisition of business organisations such as Dresser-Rand and Rolls-Royce energy.

Substitute products and services
Impact of this factor is high as alternative products and services are available in the digital media (Riazet al. 2020). However, it is worth noting that this organisation has the opportunity to overcome the impact of this external force by increasing the level of research and development.

SWOT Analysis
This analysis helps organisations to analyse the external factors that can affect the entire procedure of business.

Strengths
Worldwide presence of this company has made it efficient in providing work and employment to the large number of people that has made this company relevant in every field. This company has expanded its business in 200 countries with its R&D facilities, warehouses, and office buildings (Assets.new.siemens.com, 2020). Innovation and higher technology have made it easy for the organisation to create a strong legacy of groundbreaking ideas and innovative concepts in the world of business. Successful business models of the company have helped the company to gain competitive advantages by invested around 500 million euro only in research and development

Strong advertisement methods of this company have helped it become an integral part of daily life by becoming ingenuity for life for the people of different countries. Along with that, this company has focused on using 100% green energy and smart e-mobility facilities in every working firm of the company.

Customer satisfaction also needs to be counted as the strength for this company when it comes to providing excellent services and work for the customers compared to other business organisations in this field.

Weaknesses
This company has already faced lawsuits in Europe and America for using corrupt practices in the case of conducting business in foreign deals.

Competitors of this company such as General Electric and ABB are quite tough competitors to provide high quality services to the customers (Assets.new.siemens.com, 2020).

Opportunities
This company has the opportunity to work in this business sector efficiently due to improved interests and importance of digitisation in the business field. It is also possible for the business company to gain competitive advantages by implementing new environmental policies that have made this organisation relevant in every field.

Emerging markets of new business performance and technology are other critical aspects related to business opportunities in this company.

Threats
Economic fluctuation and changes in the policies is a great threat for the company.

Analysis of the operational context of the firm
Differentiation strategy has been implemented in Siemens in the fiscal year of 2020 by creating a better portfolio in comparison to the General Eclectic by acquisition of Rolls-Royce Energy. Operational activities of this organization have established a better transportation system for the customers.

Internal strategic analysis
VRIO analysis

Table 1: VRIO framework
(Source: Created by author)

The above mentioned framework is showing the importance of the internal strength of this company that has strong brand position for gaining customer satisfaction along with strong advertisement methods to gain competitive advantages in the form of sustainable achievements.

Assessment of competitive situations and reviewing the current strategy Siemens

Financial results
This company has earned revenue of 55.3 billion Euros in 2020 with the support of more than 293,00 employees all over the world (Renews.biz, 2020). Margin range of the company in industrial business was 11-15% while ROE after tax in Siemens financial services was 17-22%. Hence, the net income of the company in 2020 was 4,200 million euros (New.siemens.com, 2020).

Personal evaluation
This organisation has shown its capacity of utilising the market environment in developing business strategies and making decisions regarding usage of digital technology and differentiation strategy.

Critique of the situation
Even after performing well this company has also faced issues regarding making decisions related to corporate strategy and business policy to improve the condition of lawsuits and competitive aspects.

Conduct a qualitative assessment of the performance of the firm
Overall performance of the company is quite satisfactory. However, the company has also faced issues regarding managing business efficiently by developing corporate strategies and business policies without making any mistakes. Corporate principles of the company are all about providing the best services and support to the customers.

Part 2 B: Potential Alternatives and Strategy Recommendations
Strategic alternatives and options to address identified issues Therefore, based on the outcomes of the analyses of the marketing strategy and current state of business strategy in Siemens, following alternatives and recommendations should be accepted.

Embracing digitalisation
Competition is quite high in the case of Siemens when it comes to changing climate and procedure of business. Therefore, digitalisation is the only process to meet the expectations of changing time. It is not possible for any company to work more efficiently without acknowledgement of digitalisation from the management team. Hence, this company has the ability to manage productivity and power for a better world.

Green initiatives
Eco portfolio of the organisation can also be managed through the implementation of using greenhouse gas monitoring systems along with the efficient transportation, lighting, and heating. It has also been identified that cross-border transactions with global clients have affected the entire procedure of this organisation to meet the organisational goals (Shtalet al. 2018). Therefore, Siemens has an opportunity to improve the work process along with managing sustainability issues through usage of green energy and involving the abilities of the company to complete the task of implying an action plan as per the climate change.

Recommendations and action plan
Diversity action plan
Gender equality plan for this organisation has the ability to manage the entire procedure of work by increasing the representation of females in the workforce by 25% by 2025. It has also been identified that female representation of the company has already increased by 19% in 2020 (Assets.new.siemens.com, 2020). However, this company can improve its process of activities and making decisions by increasing the number of female employees and executive managers by 2025. This company can also create improvement in the procedure of becoming more diverse by implying inclusion activities in the advisory board (Matovic, 2020). Discrimination among workers can create unexpected lawsuits. However, this issue can be resolved by providing equal opportunity to every employee.

Training and development
Changes in the approach of work in the top to bottom work line can help the company to manage the issue regarding diversity and expertise of work. Management team requires training and development related to implying leadership style that is more suitable for completing tasks of analysing the external and internal market environment.

Internal environment is the most important part of a business organisation that helps a company to reach the expectations of employees and customers efficiently. Well-trained and talented employees can only help the customers to get satisfactory services from the company. From that aspect, it will become easy for the company to recognise the level of work of employees through an inclusive training process. Inclusion and diversity related issues can only be managed by providing training to the management team to imply equality and diversity in every aspect of work regarding managing human resources.

Different areas of expertise and different levels of management require recovery regarding higher levels of performance. From that aspect recognition of the improved performance of every employee is more important than any other activities of the company. Due to this reason, the organisational setting for identifying the true drivers of better performance is essential for this company. Performance of any company depends on the talent and skill of the employees rather than the nationality and gender of the employees (Steget al. 2018). Hence, providing equality training can help in reducing issues regarding lawsuits. Along with that, the company has the opportunity to lead an inclusive and diverse society by empowering deprived and underprivileged people to get the proper training and development.

Action plan regarding equal opportunities includes pillars of belonging and inclusion. At the same time, commitment of the company towards change can only help in improving the conditions related to belief and divers working procedure. Planned actions of the company also reflect the unique skills and approach of the company.

Applying technology with speed as competitive strategy
Positive changes in the lives of the customers of the company are the only concern for the company to reach its organisational goals and objectives. However, before that it is essential for the company to go beyond the challenges and plans (Tyagiet al. 2020). Resilience is another answer for resolving the issue of lawsuits and sustainability activities of the company. It is not possible for the company to become carbon neutral without reducing the emissions of carbon. Hence, this company has become successful in doing so by implying cost-effective solutions.

Scaling the sustainable solutions as making changes in the business organisation
Therefore, this company has the ability to grow the business more efficiently by going beyond the competitors only through a suitable approach to the business. It has also been identified that commercial buildings, hospitals, and schools have become empowered with the help of this company (Höglundet al. 2018). However, this company has an opportunity to improve its performance in the selected area more efficiently by improving the quality of air from inside out. It has also been identified that the company can work more effectively by collaborating with the sustainable partnership process.

Reference list
Assets.new.siemens.com, 2020.Annual Report 2020, Viewed on 27/10/2021

Höglund, L., Holmgren Caicedo, M., Mårtensson, M. and Svärdsten, F., 2018. Strategic management in the public sector: how tools enable and constrain strategy making. International Public Management Journal, 21(5), pp.822-849.

Matovic, I.M., 2020. PESTEL Analysis of External Environment as a Success Factor of Startup Business. ConScienS, p.96.

New.siemens.com, 2020.Consumer Products, Viewed on 27/10/2021

New.siemens.com, 2020.Our Offering, Viewed on 27/10/2021

Patvardhan, S. and Ramachandran, J., 2020.Shaping the future: Strategy making as artificial evolution. Siemens case studyOrganization Science, 31(3), pp.671-697. Renews.biz, 2020.Siemens Gamesa unveils diversity action plan, Viewed on 26/10/2021

Riaz, M., Sa?abun, W., AtharFarid, H.M., Ali, N. and W?tróbski, J., 2020.A robust q-rung orthopair fuzzy information aggregation using Einstein operations with application to sustainable energy planning decision management. Energies, 13(9), p.2155.

Shtal, T., Buriak, M., Ukubassova, G., Amirbekuly, Y., Toiboldinova, Z. and Tlegen, T., 2018.Methods of analysis of the external environment of business activities, 3(2), p.255.

Steg, L., Shwom, R. and Dietz, T., 2018. What drives energy consumers?: Engaging people in a sustainable energy transition. IEEE Power and Energy Magazine, 16(1), pp.20-28. Tyagi, R., Vishwakarma, S., Singh, K.K., Syan, C. and through Behavioural, E.C., 2020.Low-Cost Energy Conservation Measures and Behavioral Change for Sustainable Energy Goal. Affordable and clean energy.Encyclopedia of the UN Sustainable Development Goals, 6(12), pp.120-128.