Siemens CerberusEco in China: Introducing low-frills products in a high-quality company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Siemens CerberusEco in China: Introducing low-frills products in a high-quality company
The case is set in November 2007. Matthias Rebellius, head of the business unit Fire Safety and Security Products, has to make a decision about the China strategy for the fire systems unit. Siemens has a very strong position globally in fire systems. Especially in developed markets, in the so-called M1 segments, Siemens is often number one or two. But worldwide and especially in China, the so-called M2 and M3 markets (Siemens terminology) had strong growth, but Siemens was not very well positioned in these segments of the market. The case begins with a short introduction outlining the situation. It then gives a detailed background on Siemens, especially the operating division Building Technologies (BT), and within BT the business unit Fire Safety & Security Products (FS). The case illustrates that the BT division was mainly active in mature, developed markets with slow growth rates. At the same time, there was an aggressive goal of achieving annual growth rates of more than five percent with an EBIT margin of 7 to 10%.
Swot Analysis of "Siemens CerberusEco in China: Introducing low-frills products in a high-quality company" written by Martin Kupp, Olaf Ploetner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Siemens Bt facing as an external strategic factors. Some of the topics covered in Siemens CerberusEco in China: Introducing low-frills products in a high-quality company case study are - Strategic Management Strategies, Competitive strategy, Marketing, Sales and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Siemens CerberusEco in China: Introducing low-frills products in a high-quality company casestudy better are - – increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, there is increasing trade war between United States & China,
increasing commodity prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Siemens CerberusEco in China: Introducing low-frills products in a high-quality company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Siemens CerberusEco in China: Introducing low-frills products in a high-quality company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Siemens Bt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Siemens Bt operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Siemens CerberusEco in China: Introducing low-frills products in a high-quality company can be done for the following purposes –
1. Strategic planning using facts provided in Siemens CerberusEco in China: Introducing low-frills products in a high-quality company case study
2. Improving business portfolio management of Siemens Bt
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Siemens Bt
Strengths Siemens CerberusEco in China: Introducing low-frills products in a high-quality company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Siemens Bt in Siemens CerberusEco in China: Introducing low-frills products in a high-quality company Harvard Business Review case study are -
Effective Research and Development (R&D)
– Siemens Bt has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Siemens Bt has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the Siemens CerberusEco in China: Introducing low-frills products in a high-quality company Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Siemens Bt digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Siemens Bt has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Strategy & Execution industry
– Siemens CerberusEco in China: Introducing low-frills products in a high-quality company firm has clearly differentiated products in the market place. This has enabled Siemens Bt to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Siemens Bt to invest into research and development (R&D) and innovation.
Analytics focus
– Siemens Bt is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Martin Kupp, Olaf Ploetner can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Innovation driven organization
– Siemens Bt is one of the most innovative firm in sector. Manager in Siemens CerberusEco in China: Introducing low-frills products in a high-quality company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Siemens Bt are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Siemens Bt
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Siemens Bt does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Siemens Bt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Siemens Bt has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Strong track record of project management
– Siemens Bt is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Strategy & Execution field
– Siemens Bt is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Siemens Bt in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Siemens CerberusEco in China: Introducing low-frills products in a high-quality company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Siemens CerberusEco in China: Introducing low-frills products in a high-quality company are -
Low market penetration in new markets
– Outside its home market of Siemens Bt, firm in the HBR case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company, is just above the industry average. Siemens Bt needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Lack of clear differentiation of Siemens Bt products
– To increase the profitability and margins on the products, Siemens Bt needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Skills based hiring
– The stress on hiring functional specialists at Siemens Bt has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Siemens Bt 's lucrative customers.
High cash cycle compare to competitors
Siemens Bt has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Siemens Bt has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Interest costs
– Compare to the competition, Siemens Bt has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Aligning sales with marketing
– It come across in the case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Siemens CerberusEco in China: Introducing low-frills products in a high-quality company can leverage the sales team experience to cultivate customer relationships as Siemens Bt is planning to shift buying processes online.
Products dominated business model
– Even though Siemens Bt has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Siemens CerberusEco in China: Introducing low-frills products in a high-quality company should strive to include more intangible value offerings along with its core products and services.
Opportunities Siemens CerberusEco in China: Introducing low-frills products in a high-quality company | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company are -
Leveraging digital technologies
– Siemens Bt can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Developing new processes and practices
– Siemens Bt can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Siemens Bt can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Siemens Bt can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Siemens Bt can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Siemens CerberusEco in China: Introducing low-frills products in a high-quality company, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Siemens Bt can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Siemens Bt has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Siemens Bt to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Siemens Bt in the consumer business. Now Siemens Bt can target international markets with far fewer capital restrictions requirements than the existing system.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Siemens Bt to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Manufacturing automation
– Siemens Bt can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Better consumer reach
– The expansion of the 5G network will help Siemens Bt to increase its market reach. Siemens Bt will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Siemens Bt has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Siemens Bt can use these opportunities to build new business models that can help the communities that Siemens Bt operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Siemens CerberusEco in China: Introducing low-frills products in a high-quality company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Siemens Bt.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Siemens Bt can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Siemens Bt with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Siemens Bt can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Siemens Bt needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Siemens Bt business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Siemens Bt needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Siemens Bt can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company, Siemens Bt may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Siemens Bt in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Siemens Bt demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Siemens Bt will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Siemens Bt in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Siemens CerberusEco in China: Introducing low-frills products in a high-quality company Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Siemens CerberusEco in China: Introducing low-frills products in a high-quality company is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Siemens CerberusEco in China: Introducing low-frills products in a high-quality company is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Siemens Bt needs to make to build a sustainable competitive advantage.
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