BUS1001 - Business Environment

Student Name: Sazzad

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Executive Summary

An effective system necessitates a thorough examination of all of the business's outcomes. It also
aids in forming a precise picture of the sector's current and future state. With the help of an
industry analysis tool, Siemens has the knowledge it needs to respond to and govern its side of
the company. Evaluating and interpreting upcoming outcomes and behaviors is part of this
process. The purpose of global market positioning is to build a brand's or product's image or
reputation so that people worldwide recognize it. Few elements, such as social, economic,
political, and environmental concerns, can help a firm recognize and capitalize on opportunities
presented by current business conditions. It can also be used to detect present or potential future
difficulties, allowing for better planning on how to deal with them. The findings of this research
may help to encourage modifications or improvements in areas that have been identified as
lacking.

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Table of Contents
Executive Summary.........................................................................................................................2

Introduction......................................................................................................................................3

Industry Analysis.............................................................................................................................4

International Trade Position............................................................................................................7

Political and Economic Factors.......................................................................................................8

Social and Environmental Factors...................................................................................................9

Recommendations:........................................................................................................................11

Conclusion:....................................................................................................................................11

References:....................................................................................................................................11

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Introduction

The business climate encompasses a variety of external and internal factors that influence
business activities and procedures. It is made up of a number of elements that influence and
transform the business. Various industry assessments that can help Siemens identify any
potential hazards and provide advice for how to solve them are discovered during this
investigation. The benefits and drawbacks of the above-mentioned institution's interconnections
are also described. For Siemens's growth and spread, this research looks at a variety of elements
such as political, economic, social, and environmental concerns. Also, discuss and offer a few
practical suggestions to help them ‘survive and prosper in their environment.

Industry Analysis

An approach known as industry analysis is used to measure a company's position in comparison

to other brands that generate comparable goods and services. An integrated approach requires an
analysis of the results at play in the whole business. This may assist any business owner to
realize what challenges and opportunities they face, as well as how to use their resources to solve
them and meet their expectations (Davis and Duhaime, 2018). It also helps them in developing a
precise picture of the current and future situation of the sector.

Siemens has the intelligence it needs to react to and regulate its side of the business using this
strategy, which involves examining and projecting emerging outcomes and actions.
Understanding and capitalizing on the differences between Siemens and its competitors is critical
to flourishing in today's quickest business climate (Davis and Duhaime, 2018).

Varieties of market research:

There's only a handful of widely used approaches for doing industrial analysis. The following are
two of the most common ways.

1. The competitive forces model known as Porter’s 5 forces

2. Broad Factors Analysis known as PEST Analysis

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Porters 5 forces:

This one is the most famous prominent model among others and it’s introduced by Michael
Porter in 1980. This program utilizes five industry dynamics to gauge the amount of performance
and sustainability in a particular sector (Pringle and Huisman, 2019). Siemens can find a realistic
image of the sector and makes analysis easier by evaluating the five elements of Porter’s five
forces.

Source: (Pringle and Huisman, 2019)

The gravity of industry conflict:

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A large number of business players and their associated shareholder value are a direct reflection
of the Siemens rivalry. All of the elements have a direct impact on them. Lack of product
diversity tends to increase contest levels (Pringle and Huisman, 2019). Excessive exit costs, like
higher tangible costs, laws, and regulations, union workers, and so on, make it more difficult for
challengers to win.

Possible newcomers pose a risk:

Siemens is constantly threatened by new opponents, even if it is relatively easy to enter a sector.
Siemens has the lowest competitive edge benefits for a longer period if the entrance is tough
(Pringle and Huisman, 2019). In addition, during challenging entry conditions, businesses must
contend with a steady stream of opponents.

Supplier negotiating leverage:

If Siemens relies on a limited number of suppliers, then the suppliers get a huge amount of
bargaining power. This is especially problematic for Siemens because it has a decisive impact on
the end product's quality and pricing (Siaw and Yu, 2016).

Buyers negotiating leverage:

If clients have negotiating power, the result is the absolute antithesis. Once customers have
market dominance, they can demand cheaper rates, higher quality, and new benefits and
reductions.

Alternative goods/services are a danger:

Siemens is constantly up against the other industry for making a comparable alternative product.
Siemens, like all other companies, conflicts with others. Siemens' income is affected because it is
difficult for them to impose excessive fees (Siaw and Yu, 2016).

PEST Analysis:

The PEST analysis methodology is a helpful tool for studying the surrounding environment.

Political: Political considerations such as Economic: Inflation, currency exchange

duties, environmental regulations, trade rates, interest rates, Gdp per capita, and other

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 agreements, labor rights, and fundamental
political stability all have an impact on a
business like Siemens (Ho, 2017).
Social: Population expansion, geography, and
changes in lifestyle such as healthcare,
fashion, and social movements are all
examples of the societal impact on a sector
(Ho, 2017).
economic variables all have a consequence on
Siemens' operations (Ho, 2017).
Technological: The innovative side of a
business, such as breakthroughs and
innovations that influence how businesses
work and an individual's style of living (Ho,
2017).

International Trade Position

The power to affect customer attitudes of a product or service concerning rivals is referred to as
market positioning. The goal of global market placement is to develop a brand's or product's
appearance or reputation so that consumers recognize it in a specific manner globally (Fan et al.,
2016). Siemens might use a variety of positioning strategies to maintain and strengthen its strong
positions across the globe.

Positioning Strategies: What Are They and How Do They Work:

Pros and features of the product: Aligning the Siemens al goods with a set of attributes or a set
of benefits.

Cost of the item: Equating its all available items with such a low price.

Quality of the item: Correlating all available items with the required standard of quality.

Rivals: Helping consumers believe that Siemens' entire product line is superior to those of its
rivals

Create a brand identity that allows customers to quickly recognize Siemens. Comparing itself to
its competition may aid in determining whatever makes it different. To uncover opportunities,
compare and contrast Siemens with its competitors (Fan et al., 2016). Concentrate on your assets
and how to use them to take advantage of these changes. Determine current market position and
how the new positioning will help it stand out from its opponents. Determine the overall market
parameters and the extent to which one rival can sway the other. After going through the

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previous phases, Siemens should have a strong concept of what the firm is, how it differentiates
from rivals, market trends, market potential, and how they may position themselves.

Political and Economic Factors

Political issues that affect economic growth

Form of administration: The strategies that affect personal and public economic and social
development are mostly influenced by the political system. Obtaining financing and establishing
their private business will be straightforward. As a result, Siemens may expand quickly and hire
workers differently based on the task they do (Schneider and Frey, 2018).

Security or insecurity in politics: Political situation, or destabilization, relates to a govt's

mechanisms' dependability and endurance. The less risky a political and economic system is, the
less dangerous it is for a corporation to operate there. Countries with a high danger of extremism
or political infighting will be less reliable. As a result, starting and running a business in the
region is both difficult and expensive.

Administration of politics: It relates to the regime's ability to track and implement domestic and
foreign rules and legislation. Running a business is difficult in countries where property and
plagiarism laws are not effectively enforced, making them less appealing to multinationals.
Failure to follow these rules might cost Siemens revenue, raising the risk of conducting business
in the territory (Schneider and Frey, 2018).

Corruption degrees: The level of fraud measures how people and companies functioning in a
region are subjected to deceitful, corrupt, and unlawful behaviors. Trying to bribe officials,
paying local companies for resources, or paying to keep competitors out of business are all
examples of malfeasance. A corporation pays the state to support a rival out, which limits future
sustainable growth and can lead to a dominance that drives up the cost of goods.

Economic issues that affect economic growth

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Few things have a serious influence on firm profitability and have long-term consequences. This
is largely about availability, need, and finance, and it has to do with economic-financial
elements. The following are some examples of economic factors that have an impact on
business:

1. Amount of interest
2. Terms of exchange
3. Recession
4. Inflation
5. Duties
6. Supply vs. Need

Let's examine a handful of those situations in more detail to see how they might affect Siemens.

Amount of interest: It can arise in a variety of locations and be applied by a diversity of

individuals. These might be critical to a small number of financial institutions, but they may have
an impact on Siemens, whose tactics rely heavily on massive loans (Grogan, 2020).

Terms of exchange: Currency values are a complex subject, but they must be considered by
Siemens in importation and exportation. Shifting currency rates may have an impact on how
much a corporation must pay to please an overseas source. This could have an impact on
business profits and requires a lot of effort to manage (Grogan, 2020).

Recession: Shoppers' buying attitudes may alter as a result of an economic crisis. Businesses
may be forced to lower their rates or clear fewer amounts as a result of this.

Social and Environmental Factors

Social Issues:

The domains that contain the community's basic views and practices are described as socio-
cultural factors. Growth rate, age structure, nutrition knowledge, career preferences, and other
factors are among them. The above characteristics are extremely noteworthy since they have a
direct impact on how advertising perceives people and what motivates them. Consumer culture

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mentality in culture is heavily influenced by social rules and influences (Brown et al., 2019). The
following are some important considerations:

Cultural Aspects: Because we learn to live, what and how to value, and how to handle ourselves
in society through culture, culture has a significant impact on a person's needs and wants.
Liberty, dedication, success, stability, and self-reliance are all traditional cultural values (Brown
et al., 2019).

Social Status: Family history, property, earnings, degree, career, power, and reputation all play a
role in determining social class. Persons from the same socioeconomic status share strong
ideologies, live in comparable areas, go to the same institutions, and shop at similar locations. In
target marketing, the social status may be a valuable feature to consider (Brown et al., 2019).

Environmental Issues:

Laws Relating to The environment: Environmental policies are regarded as the most
significant external intervention on corporate goals. It refers to Siemens's commitment to
environmental standards, legislation, and other trade agreements (Dagkas and Stathi, 2017).
Environmental policy has a consequence on Siemens because the legislation requires businesses
to adapt their working methods and techniques to fulfill certain requirements, which can be
costly.

Changes in the Weather: Due to the growing threat of climate change and poor climate
conditions in recent decades, Siemens has found it challenging to operate effectively in all types
of weather (Dagkas and Stathi, 2017). People are becoming increasingly aware of this situation
and moving toward ecologically friendly items.

Pollution: Pollution can have an impact on business operations and can lead to serious natural
degradation such as supply disruptions or an increase in the cost of raw resources. Siemens must
keep a close eye on such incidents and devise alternative preparations to address those issues
(Dagkas and Stathi, 2017).

Environmental resources access: Environmental resources scarcity can limit an organization's

opportunity to generate and, as a result, its productivity. They are crucial to Siemens, as they are
the company's principal supply of raw materials (Dagkas and Stathi, 2017).

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Recycling: The expense of disposing of rubbish is escalating, resulting in a shortage of trash as
well as negative impacts on the ecosystem. It will help Siemens save revenue while also
preserving the environment by making the manufacturing process more cost-effective.

Recommendations

The ability to extract new business through increasing the company's core audience is important
to its sustainability. It's not easy most of the time. Here are a few practical suggestions to assist
Siemens in surviving and thriving in their present climate.

Must understand its clients: Evaluate the requirements of the customers and create goods and
services that satisfy those interests. Siemens can learn more about its consumers by tailoring
services to them and motivating them to submit feedback about that services.

Provide amazing client relationships: Satisfy customers care is superb, and that they go above
and beyond when possible. Customers remember quality service and will tell others about it.

Clients were kept, and new prospects were sought: Siemens must seek out new prospects
while maintaining a high level of service to existing customers.

Participate in social gatherings and host their own: Siemens may use networking to form ties
with others and encourage them to refer others. Throwing an event of its own can also be a
superb method to get closer to and establish relations with clients.

Conclusion

Siemens may deduce from this research that the corporate environment is made up of a variety of
factors, all of which affect the market. Those factors have an impact on corporate functioning as
well as organizational characteristics. To improve the firm's competence and viability, it must
also evaluate both external and internal components in the business ecosystem. Siemens as giant
electrification, automation, and digitalization require innovative solutions that must focus on
customer satisfaction by fulfilling their needs. Also, It should keep a careful eye on particular
strengths and weaknesses that could result in both good and poor outcomes.

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References

Davis, R. and Duhaime, I.M., 2018. Diversification, vertical integration, and industry analysis:
New perspectives and measurement. Strategic Management Journal, 13(7), pp.511-524.

Pringle, J. and Huisman, J., 2019. Understanding Universities in Ontario, Canada: An Industry
Analysis Using Porter's Five Forces Framework. Canadian Journal of Higher Education, 41(3),
pp.36-58.

Siaw, I. and Yu, A., 2016. An analysis of the impact of the internet on competition in the
banking industry, using Porter's five forces model. International Journal of Management, 21(4),
p.514.

Ho, J.K.K., 2017. Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), pp.6478-6492.

Fan, Y., Ren, S., Cai, H. and Cui, X., 2016. The state's role and position in international trade: A
complex network perspective. Economic Modelling, 39, pp.71-81.

Schneider, F. and Frey, B.S., 2018. Economic and political determinants of foreign direct
investment. World development, 13(2), pp.161-175.

Grogan, C.M., 2020. Political-economic factors influencing state Medicaid policy. Political
Research Quarterly, 47(3), pp.589-622.

Brown, W.H., Pfeiffer, K.A., McIver, K.L., Dowda, M., Addy, C.L. and Pate, R.R., 2019. Social
and environmental factors associated with preschoolers’ nonsedentary physical activity. Child
development, 80(1), pp.45-58.

Dagkas, S. and Stathi, A., 2017. Exploring social and environmental factors affecting
adolescents' participation in physical activity. European Physical Education Review, 13(3),
pp.369-384.

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