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

competition with competitors

Optimizing resources

Maximizing globalization advantages

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

Positive Negative

External factors

STRE

NGHTS

WEA

KNESS

OPPORTUNITIES

THRE

ATS

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 non-

exploitation 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

and lower level employees.

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

giving them different incentives like bonuses.