Analysis and strategy of Siemens

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Analysis and strategy of Siemens

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Abstract

In May, 2005 the president of Siemens, Mr. Kleinfeld launched a program called 'Fit4More'. This program was based on four pillars - the sustainability of performance and consistency of the portfolio, operational excellence, quality of staff and social responsibility. The aim of the program was to achieve a sales growth that was at least twice that of the world GDP and to achieve a specific operating margin for each of 12 the divisions (reduced to 11 on 01/10/2005 following the dismantling of the pole, 'Logistics and Assembly Systems').

This strategy was based on a dynamic portfolio of management activities that aimed to maintain the leadership of Siemens in its markets. In this way, in 2005 and 2006, Siemens was able to acquire the company Bonus Energy (wind), CTI Molecular Imaging (Molecular Imaging), Flender Holding (industrial automation), Robicon (industrial automation), VA Technology (power transmission ) Wheelabrator (clean energy), Diagnostics (Molecular Diagnostics) and DPC (immuno-vitro diagnostics). It also sold its division ICM (mobile) to the Taiwanese BenQ at 300 million euros which was paid before its German subsidiary declared its bankruptcy in September 2006.

Tags - Siemens, Fit4More, Mr. Kleinfeld, strategy

Introduction
External analysis
1. Definition of the industry
2. Analysis of economic forces affecting the industry (PESEL)
3. Industry Analysis: Porter's Five Forces
4. Industry segmentation
Internal Analysis
1. Defining the Enterprise
2. Resource Analysis
3. Skills Analysis
4. Balanced ScoreCard analysis
5. Analysis of Corporate Governance
Final analysis
Conclusion

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[...] The final output of three joint ventures (with Nokia, Bosch and Fujitsu) is very likely an assignment divisions and TS OSRAM is not excluded. Reconciliation with Alstom could be considered to compete with Bombardier in the field of transportation. As for OSRAM, capital deepening the lighting market due to the emergence of LED risks losing its status to the division of cash cow. These divestitures are associated with redemptions to strengthen the poles Industry, Energy and Health, the image acquisition of Dade Behring (€ 5bn) and UGS (€ 2.7 bn) in 2007 (after those of Bayer Diagnostics (€ 4.2 bn) and DPC (€ 1.6 bn) in 2006). [...]

[...] Communication about the pole, despite the sale of mobile phones was exposed to great difficulties in the markets for fixed networks and professionals, where price pressure was increasing on a background of consolidation among operators and fixed-mobile convergence. It announced the creation of a joint venture with Nokia organization activities "fixed and mobile networks" in 19 June 2006 and called it "Nokia Siemens Networks". Initially it was scheduled for January 2007, but finally it came into being on 1 April 2007. All margin targets were successfully achieved in the second quarter 2007 (ended March 31) - Strategy "Fit4More" was extended by the strategy "Fit 4 2010" defining new margin targets by 2010 (see. [...]

[...] Competitive position: No worldwide, behind General Electric (USA) and Mitsubishi (Japan) in equipment of power plants (since 1998 with the takeover of the assets of fossil power plants of the American Westinghouse); No worldwide in transport equipment and power distribution (behind ABB); No global lighting (behind Philips) and No worldwide in automotive lighting. BREAKDOWN OF SALES BY BUSINESS TO 30/09/2008: Industry (automation, systems engineering, safety equipment, lighting, transportation . of sales Electrical energy (power plants, equipment and high voltage . of sales Health (medical imaging, diagnostics): of sales Solutions and Computer Services: of sales BREAKDOWN OF SALES BY GEOGRAPHY TO 30/09/2008 II) Strategy Launched by the new president Mr. [...]

[...] The return on capital employed (defined as the ratio of earnings before interest and capital employed) should be between 14% and 16% while the cash conversion ratio (defined as the ratio between the cash flow from operations after capital expenditures and net income) must be greater than one minus the growth rate. The new CEO Peter Löscher also announced in November 2007 several major turning points: - Reorganization of existing divisions in 10 new divisions; 15 divided into three divisions: Industry divisions), Energy divisions) and Health divisions).Industry includes divisions include; A & I & SBT, Osram and TS, Energy divisions have; PG and PTD and Health Division is MED. Other media, divisions and SIS SFS escape this classification. [...]

[...] - The optimization of the balance: the objectives of profitability and cash flow strategy "Fit 4 2010" was added to achieve a net debt to adjusted EBITDA industrial between 0.8 and which returns to increase debt. Siemens wants to take this opportunity to launch the largest share buyback program in its history: € 10 billion by 2010. - Reducing costs, general and administrative 10 to 20% in 2010: the savings expected to exceed certain goals of the plan "Fit 4 2010", as the operating margin of MED Division, now expected between 14 and 17% (against 13-15% previously).Siemens, however, reduced the spring of 2008, with this target cost reduction of 10% or € 1.2 billion savings was split between cost of sales (€ 0.5 bn) and general and administrative expenses (€ 0.7 bn). [...]

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