ENVIRONMENTAL ANALYSIS SIEMENS LTD-INDIA

Done by: S. Sasi Rekha (DI 9027) CONTENTS

 SIEMENS HISTORY  STRATEGIC ANALYSIS • Vision statement • Mission statement • Quality policy  SIEMENS –INDIA • Energy sector • Industry sector • Health care  PESTEL ANALYSIS • Political factors • Economic factors • Social-cultural factors • Technological factors • Environmental factors • Legal factors  IMPACTS OF ECONOMY AND MARKET TRENDS AFFECTING THE COMPANY  SWOT ANALYSIS • Strengths • Weakness • Opportunities • Threats  RECOMMENDATIONS

SIEMENS HISTORY Siemens was founded in Berlin by Werner Von Siemen in 1847. As an ordinary inventor, engineer and entrepreneur, Werner Von Siemen made the world’s first pointer Telegraph and electric dynamo, the inventions that helped put the spin in the Industrial revolution. As Werner envisioned, the company he started from strength to strength in every field of electrical engineering. Siemens is today a technology giant in more than

190 countries. Our work in the fields of industry, energy, communications, information, transportation, health care, components and lighting have become essential parts of everyday life. FROM WORK SHOP TO GLOBAL PLAYER – (1847-1918) A PERIOD OF CHANGE – (1918-1947) THE AGE OF GLOBALIZATION – (1947-2003)

STRATEGIC ANALYSIS VISION STATEMENT: “To remain market leader and technology pace setter in the engineering and electronics industry by utilizing the high tech expertise in Siemens group worldwide to maintain our strong and prominent local presence. MISSION STATEMENT:

It is our goal to set the benchmark by being the “best in class ” in our fields and to create value for our customers, wealth for our stake-holders and a future for our employees while giving back graciously to society a piece of our success. QUALITY POLICY: For Siemens, quality is a driving factor which strengthens our ambition to assume a world-leading role in our environment of logistics automation and material handling technology. Our Quality Policy is: "Customer Satisfaction through Continuous Improvement." Help us to get nearer to our goal, and to become better in our efforts to achieve top quality in all the products and services that we supply — push us to the limit!

SIEMENS IN INDIA For over 50 years, Siemens has been active in India, where it holds leading positions in its Energy, Industry and Healthcare Sectors, while Siemens IT Solutions and Services functions across all three Sectors. In 2008, Siemens India was the top ranked company by Business Week in its annual rating of Asia’s 50 companies. Siemens was also ranked No. 1 in the Corporate Reputation by The Wall Street Journal in its survey of Asia’s 200 most

admired companies. In fiscal 2008 sales to customers in India amounted to almost EUR 1.9 billion. Siemens currently has over 17,200 employees in India. Energy Sector: Siemens consolidates its innovative offerings in the Energy sector by combining its full range expertise in the areas of Power Generation (PG) and Power Transmission & Distribution (PTD). Utilizing the most advanced plant diagnostics and systems technologies, Siemens provides comprehensive services for complete power plants and for rotating machines such as gas and steam turbines, generators and compressors. Healthcare Sector: By combining the most advanced laboratory diagnostics, imaging systems and healthcare information technology, Siemens Healthcare division enables clinicians to diagnose disease earlier and more accurately, making a decisive contribution to improving the quality of healthcare. Industry: At Siemens, end-to-end products, systems and solutions for industrial and building automation as well as infrastructure installations are provided. These turnkey solutions cover project management, engineering and software, installation, commissioning, after-sales service, plant maintenance and training.

ENVIRONMENTAL ANALYSIS
Environment analysis is a comprehensive analysis of the internal and external environmental factors affecting an organization. A wide range of influences surrounding businesses can affect organizational decision making powers, strategies, process and performance.

Political factors: These refer to government policy such as the degree of
intervention in the economy. Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy.  Siemens stands out to be a beacon of political strength even in these times of uncertainty and turmoil.  The reduction in tariffs on capital goods, the correction of the inverted duty structures and the lowering of tariffs on non-ferrous metals are bound to be an across-the-board positive for the engineering sector in 2009.  Tax holiday under section 80 IA extended up to 2010 and reduction in import duties of naphtha from 10% to 5% was largely positive for the power sector.  How ever 4% CVD was imposed on special projects in power sector.  Siemens was adversely affected when the government imposed an additional duty in 2002 on LDO which is the fuel used by power plants.  The Export control policy of Siemens prohibits from participating, directly or indirectly, in the development, manufacturing and distribution of weapons of mass destruction and missiles capable of delivering these weapons.  Government’s thrust care would benefit siemens since it is well established in the health care segment

Economic factors: These include interest rates, taxation changes, economic
growth, inflation and exchange rates and these can have a major influence on the firm’s behavior.  The slowing global economy resulted in a decline in investments, which impacted Germany, the head quarters for Siemens, as an

export nation in particular. The inflation rate moved in line with energy prices. The gross domestic product (GDP) was up 1.3% in 2008.  In the third quarter of 2009, Siemens’ strong order backlog softened the impact of the global recession on the company’s revenue and profit. Siemens continues to expect Total Sectors profit for fiscal 2009 to exceed the prior-year level of €6.6 billion.  The company cut roughly four percent of its workforce as part of an overhaul resulting from recent economic woes. These planned cuts helped the company to achieve a savings target of 1.2 billion euros.  These internal changes are expected to regain investor confidence. Siemens anticipates new orders of about €15 billion over 3years. The decline is decelerating and there’s hope that the company is now approaching the low point.

Social factors: Changes in social trends can impact on the demand for a firm's
products and the increasing urbanization changes. These mega trends are exerting an ever-greater impact on the world in current times. availability and willingness of individuals to work.  Increasing urbanization changes are exerting an ever-greater impact on the company in current times. More people are moving to urban areas in search of better jobs, better education and a better life.  Indian customers are highly discerning, educated and well informed. Thus emphasis is on the value for money.  Customer Inspired Solutions – to design breakthrough products.  Preference for energy efficient vehicles with low running costs Social corporate responsibility of Siemens is:

 Member of Association of Advanced Research, Innovations and Entrepreneurship  National Committee under the World Energy Council.  “Caring Hands” sums up the many programs, projects and initiatives that Siemens has installed for promoting social activities throughout the world.  Siemens traditionally supports various charity activities and humane projects throughout the world.

Technological factors: New technologies create new products and new processes.
Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organizations providing the products.  High tech and electronics companies like Siemens face a variety of challenging business imperatives due to developing technology.  Siemens must develop and deliver products that are highly innovative and cost sensitive while competing in the distributed global market.  The company is continued to being squeezed by aggressive price points, product design complexities, regulatory requirements and continually changing technology.  In turn these pressures threaten to erode profit margins, contribute to commoditization, complicate the manufacturing process and slow the take-market cycle.  Siemens being today’s most forward-thinking company has built Global Innovation Networks that enables them to continuously improve their products and processes – and organize their value chain so that innovation can flourish. These networks empower the organization to meet the following business imperatives.   Increasing the yield of innovation Compressing time-market

Meeting business and regulatory requirements for healthy Optimizing resources Maximizing globalization advantages

competition with competitors  

 In this kind of sophisticated market the opportunity and competition will exist together.  Implementation of Product Lifecycle Management (PLM) to succeed and grow in a demanding global market. The goals are to bring profitable new ideas to market ahead of the competition while increasing both revenue and market share.

Environmental factors: Environmental factors include the weather and climate
change. With major climate changes occurring due to global warming, there is a growing desire to protect the environment. This is having an impact on many industries to move towards more environmentally friendly products and processes.  Siemens is the green infrastructure giant.  Siemens is facing a challenge in meeting rising needs of customers in ways that are cost efficient, sustainable and environmentally compatible.  Customer demands as in energy are, • • Reduced energy consumption Reduced electrification costs Solutions are, 1. Siemens proves to be the trend setter by innovating the world’s first tram without overhead power lines and with energy storage system. The new system allows up to 30% less energy consumption and up to 80 tons less co2 emissions a year/tram. 2. The conversion of all traffic lights in Germany to LED technology saves up to 1.4 billion kWh/year and savings of

approx € 170 million /year. Propane gas supply for repair services is no longer required.  The customer demands as in Mobility are, • • Lower emissions High possible efficiency Solutions are, 1. Intensive research into the subject of electro mobility. An electric car made of recycled material can simultaneously be both, a means of transport with less emission and a mobile energy-storage device. 2. Sea going traffic presents ample opportunities for energy consumption and innovation. Siemens manufactures electric booster drives for ships which cut diesel consumption by much as 10%. The best of these also incorporate generators that capture waste heat from fuel exhaust to provide additional electric power.  Siemens is ahead of investing in the environmental portfolio. Of € 15 billion orders expected, about € 6 billion is earmarked for green infrastructure.  Products and solutions enables their customers to become more energy efficient, eco-friendly and competitive.

Legal factors: These are related to the legal environment in which firms
operate. Legal changes can affect a firm's costs (e.g. if new systems and procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers buying the good or using the service).  Power Sector will bear burden for reducing Green house gases  Foreign trade regulations and labor legislations.  Siemens IT Solutions industry, together with Greenpeace, are pushing for changes in India’s environmental laws to better reflect the complexities of managing and handling electronic waste.

 Implementation of Impact 360 Workforce Management, Siemens business services has realized a significant return on investments.  A member of United Nations Global Compact.  Suppliers to respect Fundamental employment rights formed by the international labor organization.  Regulatory Framework under the Ministry of Shipping, Road Transport and Highways which provides guidelines.  Siemens PLM Software has publicly traded securities; it is subject to the securities laws in many countries. These laws govern the dissemination or use of information about the affairs of Siemens PLM Software. Violations of the securities laws could subject you and the Company to severe criminal and civil penalties. IMPACTS OF THE ECONOMY AND THE MARKET TRENDS ON THE WORKING OF THE COMPANY Business operations: The Company has recorded a strong growth during the Financial Year ended on 30th September, 2007. Turnover increased sharply by 71% and stood at Rs.77, 268 million as compared to Rs.45, 103 million in the previous year 2005-06. While all the businesses contributed to the growth, the key drivers were Power, Automation & Drives and Industrial Solutions and Services businesses. New Orders received by the Company during the Financial Year ended on 30th September, 2007, were valued at Rs.101, 070 million as compared to Rs.82, 025 million during 2005-06, registering a rise of 23%. The major contributor and volume driver was the Power business. The Profit after Tax increased by 66% to Rs.5, 965 million from Rs.3, 601 million as in 2005-06. • • • • Robust economic growth of over 9% Currency fluctuation gains Forayed into newer market segments & penetrated into B & C cities Increased the export business to more than 30% of the total business

Research and Development, Technology Absorption, Energy Conservation, etc. Siemens has been increasing its spend on Research and Development activities. The increased infrastructural and financial support reflects the Company’s resolve to stay ahead of competition by delivering innovative quality products and its commitment to total customer satisfaction. Global expansion    Expansion of solar business to Italy Turkmenistan chooses Siemens as technology partner for infrastructure expansion Siemens Healthcare collaborates with Dr. Naresh Trehan’s Medanta-The Medicity to provide affordable high-end healthcare delivery solutions

SWOT ANALYSIS Internal factors
STRE WEA KNESS THRE OPPORTUNITIES ATS

Positive Negative

NGHTS

External factors

Internal Strengths are the core competencies, corporate capabilities and

resources that provide the basis for a company’s strategy.

STRENGHTS OF SIEMENS ARE:           Diversity – A success factor for Siemens Strategic focus Sustainable success through diversity Think globally and act locally strategy High quality and Vast range of products Brand image and own production Customized products and ISO certification After sale service and online service Decentralization Internal weakness is the unsuccessful application of a competency or the nonexploitation of a critical factor that diminishes company competitiveness. WEAKNESSES OF SIEMENS ARE:      Low price products. Mixed cultures and a complex organizational culture. Low employee satisfaction level and weak appraisal system Less promotion. External Opportunities are the benefits that are likely to accrue from

pursuing the vision and available external opportunities. OPPORTUNITIES FOR SIEMENS ARE:      IT expansion Technology change Overseas projects Market integration opening up Strong position and growing opportunities in other countries

External Threats are the pitfalls and the dangers, the variations and

exceptions possible. THREATS FOR SIEMENS ARE:     Low product pricing by competitors Slowdown in global economy. Less market share The policies and promotional programs adopted by other brands.

RECOMMENDATIONS: • • • • • A better coordination should be developed between the top-level management Pay scale of lower level employees should increase as compared to competitors. Siemens should retain their good employees by giving them incentives. Proper training should be given to the employees. Employee satisfaction level should increase by appraising them at spot and by

and lower level employees.

giving them different incentives like bonuses.

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