Siemens AG: Global Development Strategy (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Siemens AG: Global Development Strategy (A)
Describes how Siemens, the German electrical engineering giant, has developed and manages global R&D in its large Information and Communications Networks (ICN) division. In 1994, Siemens opened its Bangalore (India) center, which has now grown into one of its largest regional development centers outside Germany. With Bangalore asking for increased resource independence and managerial autonomy, senior management has to decide how the activities in India fit into its global development strategy. This tension is played out in a large software project led by Bangalore developers in which an increase in project autonomy also results in serious technical problems for Siemens in the quality-driven telecommunications equipment industry.
Swot Analysis of "Siemens AG: Global Development Strategy (A)" written by Stefan Thomke, Ashok Nimgade includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Siemens Bangalore facing as an external strategic factors. Some of the topics covered in Siemens AG: Global Development Strategy (A) case study are - Strategic Management Strategies, Product development, Strategy and Technology & Operations.
Some of the macro environment factors that can be used to understand the Siemens AG: Global Development Strategy (A) casestudy better are - – wage bills are increasing, geopolitical disruptions, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing transportation and logistics costs,
talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Siemens AG: Global Development Strategy (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Siemens AG: Global Development Strategy (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Siemens Bangalore, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Siemens Bangalore 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 AG: Global Development Strategy (A) can be done for the following purposes –
1. Strategic planning using facts provided in Siemens AG: Global Development Strategy (A) case study
2. Improving business portfolio management of Siemens Bangalore
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Siemens Bangalore
Strengths Siemens AG: Global Development Strategy (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Siemens Bangalore in Siemens AG: Global Development Strategy (A) Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Siemens Bangalore 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 Bangalore in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Technology & Operations industry
– Siemens AG: Global Development Strategy (A) firm has clearly differentiated products in the market place. This has enabled Siemens Bangalore to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Siemens Bangalore to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Siemens Bangalore in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Siemens Bangalore digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Siemens Bangalore 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.
Organizational Resilience of Siemens Bangalore
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Siemens Bangalore does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Siemens Bangalore has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Siemens AG: Global Development Strategy (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Siemens Bangalore is present in almost all the verticals within the industry. This has provided firm in Siemens AG: Global Development Strategy (A) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Siemens Bangalore in the sector have low bargaining power. Siemens AG: Global Development Strategy (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Siemens Bangalore to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Siemens Bangalore 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 AG: Global Development Strategy (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Siemens Bangalore is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Siemens Bangalore is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Siemens AG: Global Development Strategy (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Siemens Bangalore 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.
Ability to recruit top talent
– Siemens Bangalore is one of the leading recruiters in the industry. Managers in the Siemens AG: Global Development Strategy (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Siemens AG: Global Development Strategy (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Siemens AG: Global Development Strategy (A) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Siemens AG: Global Development Strategy (A), is just above the industry average. Siemens Bangalore 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Siemens Bangalore supply chain. Even after few cautionary changes mentioned in the HBR case study - Siemens AG: Global Development Strategy (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Siemens Bangalore vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Siemens Bangalore 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 AG: Global Development Strategy (A) should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Siemens AG: Global Development Strategy (A) HBR case study mentions - Siemens Bangalore takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Siemens Bangalore 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Siemens AG: Global Development Strategy (A), it seems that the employees of Siemens Bangalore don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Siemens Bangalore is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Siemens AG: Global Development Strategy (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Siemens Bangalore, firm in the HBR case study Siemens AG: Global Development Strategy (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Siemens AG: Global Development Strategy (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Siemens Bangalore has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Siemens Bangalore needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study Siemens AG: Global Development Strategy (A) 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 Bangalore 's lucrative customers.
Opportunities Siemens AG: Global Development Strategy (A) | 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 AG: Global Development Strategy (A) are -
Manufacturing automation
– Siemens Bangalore can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
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 Bangalore can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Siemens Bangalore 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Siemens Bangalore 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 AG: Global Development Strategy (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Siemens Bangalore is facing challenges because of the dominance of functional experts in the organization. Siemens AG: Global Development Strategy (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Siemens Bangalore 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.
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 Bangalore in the consumer business. Now Siemens Bangalore can target international markets with far fewer capital restrictions requirements than the existing system.
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 Bangalore can use these opportunities to build new business models that can help the communities that Siemens Bangalore operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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 Bangalore 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.
Using analytics as competitive advantage
– Siemens Bangalore 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 AG: Global Development Strategy (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Siemens Bangalore to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Siemens Bangalore can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Buying journey improvements
– Siemens Bangalore can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Siemens AG: Global Development Strategy (A) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Siemens Bangalore can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Siemens Bangalore can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats Siemens AG: Global Development Strategy (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Siemens AG: Global Development Strategy (A) are -
Consumer confidence and its impact on Siemens Bangalore 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Siemens Bangalore can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Siemens AG: Global Development Strategy (A) .
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 Bangalore business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Siemens Bangalore
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Siemens Bangalore.
Stagnating economy with rate increase
– Siemens Bangalore 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Siemens Bangalore with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Siemens Bangalore has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Siemens Bangalore needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Siemens Bangalore high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Regulatory challenges
– Siemens Bangalore 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 Technology & Operations industry regulations.
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 Bangalore 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.
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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Siemens Bangalore can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Siemens AG: Global Development Strategy (A) 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 AG: Global Development Strategy (A) 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 AG: Global Development Strategy (A) 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 AG: Global Development Strategy (A) 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 AG: Global Development Strategy (A) 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 Bangalore needs to make to build a sustainable competitive advantage.
