Siemens AG: Key

Submitted by: Group 5
Ashutosh Kumar Singh
Gaurav Sharma
Kishore Sriram
Mohnish Singh
Pritam Kumari

Siemens . continuously outperform competitors ▪ Invest in green technologies and move business to € 40 billion ▪ Presence in emerging economies such as Brazil and India .Strategy ▪ Focus on innovation driven growth markets ▪ Get closer to customers.

Sectors & Divisions Industry Energy Infrastructure & Cities Healthcare • Fossil Power • Imaging & • Industry • Rail Systems Generation Therapy Automation • Mobility & • Wind Power • Clinical • Drive logistics • Solar & Products technologies • Low & Hydro • Diagnostics • Customer medium • Power • Customer Services voltage Transmission Solutions • Smart Grid • Oil & gas • Building • Energy Technologies Service Financial Services Real Estate Equity Investments Attractive markets driven by mega trends Demographic Climate Change Globalization Urbanization Change .

Key Account Management ▪ MDBs – CEOs of BUs across divisions and sectors ▪ Criteria for KAMs ▪ Customer Turnover & Installed equipment ▪ Industry (If its growing) ▪ Sales potential & Cross selling opportunities ▪ Customers of cross Bus or cross sector projects are better server by KAMs ▪ Delisting if an account can be better served regional ▪ KAM ▪ RAM.deep knowledge of customer. country but lack global framework ▪ GAM – Specialized on product portfolio and not on customer or geography .

A new order for a division or BU which is new to the customer ▪ Conflicts between salesforce and CAMs ▪ Targets set by looking at regions and products and not by market . Covered entire spectrum across BUS.Corporate Account Managers ▪ Not technological experts but had a ‘comprehensive ignorance’. sectors and geographies ▪ Secure strategic deals.KAM.

Account Business Plan Account strategy & Business Status Customer’s Basic measures • SWOT analysis of siemens vis a Information • Account development strategy vis the customer • Description • Customer’s business not owned • Customer satisfaction. • Analysis of Industry by siemens interaction description • Customer’s SWOT analysis • Account penetration by BU and • Customer’s ongoing projects division • List of top opportunities and action list .

Setup project’s organization Lead Opportunity Management Management Contract Bid negotiation preparation • Not involved in detail. Help • Offer what can be provided. BUS identify right contact coordinate with Bus. Present in • Advisory role. Explain meetings & negotiations. presence in important meetings. importance of customer coordination of internal/external activities .Role of KAM in sales • Identify/develop/suggest leads.

Relationships in KAM ▪ External ▪ New start in relationship ▪ Set up workshops ▪ Grow with the customer ▪ Goal: Siemens as a partner ▪ Internal ▪ Misunderstanding of CAM’s added value ▪ Sometimes are not informed by BU ▪ Share all info Solving internal problems ▪ CAM act like role model .

helps global mega trend & Advisory role of • Top 10 energy Siemens to gain larger projected to grow in the Siemens accounts market shares in future - • Account penetration specific markets 58% . making - potential . Kratos account Level Fit Stability Structure • International level • Great strategic fit: • Aggressive future • Centralized decision • Cross-selling & growth • Renewable energy (EU) investment strategy.Av. annual & expand presence • Market: addressing • Several businesses - order intake : €500mn (outside EU) .

Case Dilemma Kratos asked Siemens to revise two O&M contracts for Siemens gas and steam turbines which represented 50% of their total turbine fleet as they plan to cut down O&M costs by 10% . Siemens has long term contract worth € 300 million in fossil power generation ! .

Option 1: Revision of Operation & Maintenance contracts ▪ Pros ▪ Unclosed deals & promising pipeline -> not revising could jeopardize the relationship ▪ Good strategic fit -> possibility of further expansion ▪ Importance of Kratos to other BU’s ▪ Cons ▪ Likely to maintain cooperation due to high importance of Siemens as supplier & high switching costs ▪ Other customers / departments within Kratos might ask for revisions ▪ Negative impact on affected BU -> give up current revenue ▪ Timing -> 9% drop in order intake would have to be announced at next shareholder meeting .

Option 2: Ask Kratos to outsource O&M ▪ Pros ▪ Might save money & buy turbines from Siemens in future ▪ Give them discount and get O&M contracts in future ▪ Cons ▪ Should forego current revenue ▪ Will impact long term relationship with Kratos who are eyeing to venture into solar and smart grid .

Recommendation: Revise O&M rates ▪ Calculate estimations of pipeline project revenue (500 projects until 2018) ▪ Indicate potential of the customer ▪ Importance to the company (renewable energy. etc. international expansion.) ▪ Siemens strategy to venture into renewable & into emerging economies .

Thank You ! .