structure follows strategy effective implementation of the ... · 11/15/2013 · siemens ag –...

siemens.ch/answers Restricted © Siemens Switzerland Ltd. 2013

Structure follows Strategy

Effective implementation of the new Siemens strategy

ZFU, November 15, 2013

Siegfried Gerlach, CEO Siemens Switzerland Ltd.

November 15, 2013 Siegfried Gerlach / CEO

Restricted © Siemens Switzerland Ltd. 2013 siemens.ch/answers

Telecommunication and high voltage engineering:

the historical roots of Siemens

Invention of the pointer telegraph

Founding of Siemens & Halske

Construction of Europe's first long-

distance telegraph: Berlin-Frankfurt

Discovery of the dynamo-electric

principle

Cable steamship "Faraday" lays

transatlantic telegraph cable

First electric train shown

at the Berlin trade fair

First electronic elevator

in Mannheim

First subway in Budapest

First automatic telephone exchange

for large city opened in Munich

1847

1848

1866

1874

1879

1881

1896

1909



Siemens Ltd.

was active in six sectors up to 2005



After our successful transformation, One Siemens is

our framework for sustainable value creation



Strategic visioning process –

Pictures of the Future

Extra-

polation

(Road-

maps)

Today‘s business

Retro-

polation

(Szenarios)

Long-term

Today

Medium-term

Society

Politics

Economy

Environment

Customers

Technology

Competitors

Influence factors and

trends

Short-term Today

'Picture of the Future’

Suppliers



Climate change

2012: highest CO2

concentration in the

atmosphere in 350,000

years

2001 to 2010: warmest

decade on record

Max Planck Institute

for Meteorology: Only

immediate, drastic

reduction of CO2

emissions will keep

global warming below

2° C until 2100.



Urbanization

Growth of cities

2009: For the first time

in history, more than

50% of mankind lives in

cities

2050: 70% of mankind

will live in cities

Megacities worldwide

1975: 3 megacities with

more than 10 million

inhabitants

2025: 27 megacities

with more than 10

million inhabitants;

about one person out of

ten lives in a megacity.



Demographic change

World population

2011: 7 billion people

2050: 9.3 billion people

Worldwide life

expectancy

2011: 69 years

2050: 76 years; share

of people over age 65

more than twice what it

is today



Our strategy is the base for our success

Markets & customers

Demographic Change

Urbanization

Climate Change

Globalization

Global Megatrends

Economic environment

+

Focus on innovation-

driven growth markets 1

Get closer to our

customers 2

Use the power

of Siemens 3

Strategic Directions

One Siemens

Continuous improvement

Siemens

Sectors

Capital

Efficiency

Capital

Structure

Revenue

Growth

EBITDA

Financial target system

Framework for

sustainable value creation

Vision

Siemens –

the pioneer

Values

responsible

excellent

innovative

Siemens strategy at a glance Competition from the West

Competition from the East

Competitors from

emerging countries

IT players Capital goods



We provide answers to the most urgent questions

of our time

Vision

Intelligent

infrastructure

solutions

Industrial

productivity

Energy efficiency

Affordable and

personalized

healthcare

Industry Sector

Energy Sector

Healthcare Sector

Organization

Infrastructure & Cities Sector

The Pioneer in

Infrastructure &

Cities

Rail Systems

Mobility and Logistics

Smart Grid

Low and Medium

Voltage

Building Technologies

Industry

Industry Automation

Drive Technology

Customer Services

Energy

Fossil Power

Generation

Oil & Gas

Renewable Energy

Energy Service

Power Transmission

Healthcare

Imaging & Therapy

Systems

Clinical Products

Diagnostics

Customer Solutions



Portfolio adjustment - Divestments

Divestments in Com area

(new orders 2006: 13 billion euro)

Joint-venture Nokia Siemens Networks

Sale of majority share in Siemens

Enterprise Communications

Sale of Siemens Home and

Office Communication Devices

Sale of share in Fujitsu Siemens Computers

Sale of Siemens VDO to

Continental (new orders 2006: 10 billion euro)

Sale of SIS to Atos Origin

(3.7 billion euros / 28,500 employees)

Spin-off of Osram (4.7 billion euros / 39,000

employees)

Planned divestments:

Solar energy business (700 employees)

Water Technologies (4,500 employees)

Logistics and Airport Solutions (3,600

employees)



Portfolio adjustment - Acquisitions

Purchase of VA Tech

(3 billion euros, 13,000 employees)

Purchase of diagnostics sector

from Bayer (1.4 billion euros, 5000

employees)

Purchase of Diagnostic Products

Corporation California

(481 million dollars, 2,500 employees)

Purchase of Dade Behring

(1.7 billion dollars, 6,400 employees)

Purchase of UGS

(1.22 billion dollars, 7,300 employees)

Purchase of Invensys Rail (3,200

employees)

Purchase of LMS International (1,200

employees)



Environmental Portfolio revenue

(in billions of €) 1)

28 30 33

2012 2011 2010

213 257

332

2010 2011 2012

…roughly equal to

1% of global CO2-

emissions in 2011

Customers’ CO2 abatement

(in millions of metric tons) 1)

Renewable energies 2

Energy efficiency Energy efficiency 1

Environmental technologies 3

1) Continuing operations only (without OSRAM and Solar business)

The Siemens Environmental Portfolio –

our contribution to sustainability



Siemens AG – Facts and Figures

Sales of more than 78 billion

euros and profit of 4.6 billion euros

(after taxes)

R&D expenditure of 4.2 billion

euros in FY 2011/12

Siemens achieves 75% of its

business with products and

solutions that have been

developed within the last five

years.

370,000 employees in 190

countries across the globe



Comparison of new orders for

Siemens Switzerland Ltd.

Values in millions of

CHF Fiscal year 2000

Total:

1973.8

95.8 80.2

232.1

172.1

897.2

401.8

94.6

Energy

Medicine

Industry

Industry (Transportation)

Information & Communication

Components

Household Appliances

Fiscal year 2012

50.8

113.3

396.8

267.9

75.5

169.7

37.8

Energy

Healthcare

Infrastructure & Cities

Infrastructure & Cities

Infrastructure & Cities (Smart Grid/Low and Medium Voltage)

Industry

Other

(Mobility and Logistics/Rail Systems)

(Building Technologies)



CD ST defines the corporate strategy

Scope Typical activities

To be successful each strategy level needs to be properly aligned

and closely linked to each other

Broad environment

Long term / indefinite

scope

Top level

management

Specific

market/business

Medium-to-long term

Business leader

Specific function

Short-to medium

term

Functional leader

Identifies and defines the businesses the company

is in and sets priorities for capital allocation

Sets targets & measures/controls performance

Defines horizontal strategies and the level of

interaction/corporate involvement

Identifies risk and opportunities in the market

Defines sales and customer strategies

Examines the behavior of competitors

Defines its competitive advantages regarding

strengths and competences

Translates business strategy into functional

strategy

Defines the core competences within functions

Implements and executes the strategy

Corporate

Strategy

Business

Strategy

Functional Strategies

R&D Marketing HR

Sourcing Production …

Type of Strategy Level in

Siemens

Siemens

Sectors

Divisions

Business

Units

Functions

How to

compete

Where to

compete



Siemens Switzerland

Regional Strategy Implementation Process



Siemens Switzerland

Implementation Process (SIP) Overview of Phases

Define

Action Fields

Analyze

External

Environment

Analyze Internal

Strengths and

Weaknesses

Develop

Strategy

Implement

Strategy

Control

Strategy

Functional

Strategies

(SCM, HR, IT, AC,..)

1. Corporate & Business strategy (Global)

Nov Dec

Global Siemens

Strategy Review

(SSP)

Jan Feb Mar Apr-Oct

BRM

Strategy

Review

Meetings

3. Regional Functional Strategies (e.g. IT, HR, SCM)

2. Regional (Market) Strategy (Countries)

ST

Department

Targets/

Budgets



Siemens Switzerland

Strategy Implementation Process (SIP)

Siemens Toolbox

Business Field

Definition

Trends Competitor

Benchmarking

SWOT Stakeholder

Mapping

Discount / Business

Value

Strategic USP Market

Attractiveness

Core Competences Competitive

Strategy

Alignment Targets / Budgets

Portfolio Market Analysis Innovation Market Strategy Roadmap

(Moves, Initiatives)

Scorecard

Performance

(Baseline, BSC)

Key Success

Factors

Synergies Resource Strategy Sales / Profit

Calculation

Risk Management

Define

Action Fields

Analyze

External

Environment

Analyze Internal

Strengths and

Weaknesses

Develop

Strategy

Implement

Strategy

Control

Strategy

KSF

O T

S

W t E E

P

S

L

T



Nine focus areas operationalize

our strategic directions

Be a pioneer in

technology-driven

markets

Strengthen our

portfolio

Provide a leading

environmental

portfolio

Focus on

innovation-driven

growth markets

Grow in

emerging markets

Expand our

service business

Intensify our

customer focus

Get closer to our

customers

Encourage lifelong

learning and

development

Empower our diverse and

engaged people worldwide

Stand for integrity Use the power

of Siemens

1

2

3

Strategic directions Focus areas

Excellent Responsible Innovative Our values



University

We want to encourage and

reward outstanding scientific

achievements.

This is why we give away

free experiment kits to Swiss

nursery schools.

Pre-school

We want to stir interest in

science and technology at

an early age.

School / Vocational

Training We want to prepare young

talent to meet the challenges of

the future.

This is why we are training

more than 300 apprentices.

This is why we cooperate

closely with Swiss universities

and have established a

professorship for «Sustainable

Building Technologies» at the

ETHZ.

Siemens Generation 21



Impact and experiences

- Structure follows Strategy

- Operative successes confirm the correctness

of the strategy

- Carve-out of IT and telecommunications

resulted in drop in business volume

- Earlier acquisitions (Industrieteil Elektrowatt,

Integra Signum) now form the backbone of

Swiss business

- Restructuring requires the highest level of

management attention

- Constant changes lead to insecurity among

employees

- Change processes are ongoing

- Communication is a central factor: employees

need to know and support the strategy

- It’s all about people

structure follows strategy effective implementation of the ... · 11/15/2013 · siemens ag –...

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