Siemens Case Study- Swot and Pestle Analysis For Siemens

Siemens Case Study

Company Overview:

Siemens AG is a German multinational conglomerate corporation which has it’s headquarter in Munich and is identified as the largest industrial manufacturing company in Europe with its various brand offices across the globe. Siemens & Halske was founded by Werner von Siemens and Johann Georg Halske on 1 October 1847. Based on the telegraph, their invention used a needle to point to the sequence of letters, instead of using Morse code. The company, then called Telegraphen-Bauanstalt von Siemens & Halske, opened its first workshop on 12 October. During the 1950 the company gradually started to exapdn its base from West Germany to Europe and overseas and by 1960s it became the world’s largest electrical company. In 1966 all constituent companies were merged into the newly created Siemens AG.

The principle divisions in which the company operates includes: industry energy, healthcare and infrastructure & cities. Ranging from resource-efficient factories to resilient supply chains, and smarter buildings and grids, to cleaner and more comfortable transportation as well as advanced healthcare, the company has been highly committed in building clean and smart technology for its customers utilising the digital resources and helping individuals to transform their everyday life. During the early 21st century its products ranged from diagnostic imaging systems, mobile telephones, and hearing aids to mass transit systems, ground movement radar for airfields, and power generating equipment.

Organizational Culture

At Siemens the organizational leaders are very much encouraging and always look into the matter that the employees are able to take an active part in the overall business process. Employees are very much prioritised by the leaders. Currently (as of April 2018) more than 300,000 employees are Siemens shareholders – that’s around 80 percent of a workforce that totals 379,000 people. Employees have been able to buy Siemens AG shares on preferred terms since 1969. This actually shows how Siemens prioritise and values the opinion of its employees. The company heads actually believe that such participation and involvement will actually encourage the employees to take a more active and responsible role in the business. In order to ensure that the employees are quite able to take such responsibilities and active participation the organizational leaders take maximum focus on training the employees. Apart from his the organization is also quite responsible in ensuring sustainability in its business operation. For years now, Siemens' comprehensive commitment to sustainability has been well-received around the world. For the 20th consecutive time, RobecoSAM / Dow Jones listed Siemens in the DJSI World Index, confirming our standing as one of the most sustainable companies in our industry. The organization has been very actively focusing of reducing its carbon emission and using green energy solutions.

SWOT Analysis

Strengths:

Some of the major strengths of the brand are:

Siemens has a global or worldwide presence as it largely contributes in global power generation, to its transmission and distribution smart grid solutions and effective application in the electrification value chain. Along with this the company also has a huge employee base that is 3,72,000 employees in more than 200 countries. Such huge scale operation and market presence is no doubt a very big strength for the brand.
Apart from this the company also focuses on innovation to set its benchmark in the global market. With a strong legacy of 170 years, the company has been leading the industry by investing heavily on its R&D. Along with this Siemens also focuses on it advertising and branding. For instance the company has been investing hugely on developing smart e-mobility solutions which has been extensively promoted by the brand.
Customer satisfaction is another major concern of Siemens and it is always focused on improving the existing customer experience with the brand

Weakness:

Some of the major weaknesses include:

There is significant amount of lawsuits which the company has faced in Europe and America for which it had to incur huge fine amounting to $1.6 billion The Company pleaded guilty of using corrupt practices in foreign business dealings, Siemens also had to settle cases related to probes to whether bribes were used to get contracts. Allegations like this have negatively affected the brand image of Siemens.
Apart from this it is also important for the organization to understand that such huge market presence across the globe also leads to huge capital investments as well as increases the expenditure of the organization which might at times affect its revenue earning status

Opportunities:

Some of the major opportunities include:

Siemens has to focus on taping new markets as it has been doing it quite successfully till date. Thus the company should focus on strengthening its strategies in markets of South Africa, Thailand, and Vietnam.
Digitalisation can be used as another major opportunity for Siemens to create differentiated pricing strategy which will help the company maintain loyal customers with great service and lure new customers. Siemens has gained new customers through the online channel and has invested vast sum into the online platforms

Threats:

Some of the major threats include:

Economic fluctuation in the global market can be identified as one of the major threats for Siemens as it has a global presence. For instance due to recent hikes in the fuel prices, the company’s profit fell 25 percent. Siemens seeks to reduce costs by €1 billion and has claimed that it may have to cut jobs for it especially from the poor performing divisions. The economic fluctuations play the major role in affecting the profit of the company.
Apart from this the company is also quite heavily dependent of its global suppliers which at times might emerge as a threat for the company if the suppliers gain more power and enjoy monopoly existence in the market

PESTEL Analysis

Political Factors:

Political stability plays a very important role in global business scenario. As Siemens is present across various country market hence the different political climate and international relations definitely affects the business performance. Frequent changes in government policies harm business performance by increasing environmental uncertainty. It is important for Siemens to study the current trends in the country's political scenario as changes in government may alter the government's priorities towards the development of different industries. Existence of bureaucracy and corruption will definitely affect negatively. Hence while choose to venture or tap new country markets these issues needs to be assessed by this global brand. Apart from these taxation and trade restrictions in different country markets are also to be reviewed by the brand

Economic Factors:

It is very important for Siemens to understand the fact the economic condition of a market is directly responsible for the growth of the business. Growing economies offer wide-ranging growth opportunities to the Siemens. Similarly, it is important to understand the industry lifecycle stage. If the company is aiming to enter a matured market it would be no doubt quite challenging as there would be high amount of competition. Market interest rates and tax rates also determines the overall profitability of the business. For instance high fluctuation on local currency can be a cause of serious concern for Siemens. Labour market flexibility also plays a vital role in the business of Siemens as availability of skilled human capital as a shortage of skilled labour can affect business efficiency and makes talent attraction and retention more challenging.

Social Factors:

Organizational culture derives strong influence from the societal norms, values and trends. The need to understand the demographic trends and the consumer demands will actually help the brand accordingly design its marketing activities. Siemens has to understand the gender roles and the power distance or the levels of income inequality existing in the society or the market where it aims to establish itself. This is very important so that the brand can accordingly design its internal work culture

Technological Factor:

Technology is dynamic hence as a global brand it is extremely necessary for Siemens to equip itself with the latest technology and invest significantly in the digital technology so that the business can further increase its market presence. Moreover, considering the development and maturity level of technology in the respective market is also important. Entering in markets where technological advancement has not reached the maturity means Siemens can increase the market share by focusing on emerging technological innovations.

Environmental Factors:

Investing in sustainable and green business technology is immensely important. Siemens can benefit from it and invest in renewable technologies to ensure long-term sustainability. Regulatory bodies’ emphasis on ensuring compliance with environmental norms is altering the product innovation priorities. It requires Siemens to prioritize and focus on marketing the eco-friendly nature of their products over customary value propositions.

Legal Factors:

It is extremely important for a global business firm to best comply with the employee and labour laws of every country so that it does not end up being in a legal hassle. The data protection has become an important issue due to consumers’ privacy and security concerns. Siemens need to study data protection regulations to protect the customer data.

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