Case Study Description of Siemens: Anatomy of Bribery
In November 2006, 200 German police officers raided the headquarters of Siemens AG, Europe's leading engineering company, seeking evidence pertaining to widespread bribery. The raid followed extensive investigations of Siemens' activities that originated from a bank's internal scrutiny of accounts believed to be used for money laundering. Amid broadening suspicions, the Siemens initiated its own internal investigation, identifying a??420 million in suspicious transactions in its telecommunications unit. The company hired a private law firm to conduct an independent internal investigation. The law firm reported that it had identified a??1.3 billion in suspicious payments since 1999 and had received "important ... new information" that could implicate high-ranking executives. This case follows the bribery investigation, touching on possible causes, the company's handling of the allegations, and potential safeguards to protect against future problems.
Swot Analysis of "Siemens: Anatomy of Bribery" written by David P. Baron includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Siemens Bribery facing as an external strategic factors. Some of the topics covered in Siemens: Anatomy of Bribery case study are - Strategic Management Strategies, Boards, Design, Ethics, International business, Regulation and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Siemens: Anatomy of Bribery casestudy better are - – digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, there is backlash against globalization, increasing household debt because of falling income levels, increasing transportation and logistics costs, wage bills are increasing,
increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Siemens: Anatomy of Bribery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Siemens: Anatomy of Bribery case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Siemens Bribery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Siemens Bribery 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: Anatomy of Bribery can be done for the following purposes –
1. Strategic planning using facts provided in Siemens: Anatomy of Bribery case study
2. Improving business portfolio management of Siemens Bribery
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Siemens Bribery
Strengths Siemens: Anatomy of Bribery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Siemens Bribery in Siemens: Anatomy of Bribery Harvard Business Review case study are -
Analytics focus
– Siemens Bribery 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 David P. Baron 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.
Organizational Resilience of Siemens Bribery
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Siemens Bribery does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Siemens Bribery 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: Anatomy of Bribery - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Siemens Bribery is one of the most innovative firm in sector. Manager in Siemens: Anatomy of Bribery Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Siemens Bribery is one of the leading recruiters in the industry. Managers in the Siemens: Anatomy of Bribery are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Siemens Bribery is present in almost all the verticals within the industry. This has provided firm in Siemens: Anatomy of Bribery 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.
Strong track record of project management
– Siemens Bribery is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Siemens: Anatomy of Bribery 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.
Superior customer experience
– The customer experience strategy of Siemens Bribery in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Siemens Bribery has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Siemens Bribery 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Siemens Bribery digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Siemens Bribery 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.
High switching costs
– The high switching costs that Siemens Bribery 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.
Weaknesses Siemens: Anatomy of Bribery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Siemens: Anatomy of Bribery are -
Skills based hiring
– The stress on hiring functional specialists at Siemens Bribery 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.
Aligning sales with marketing
– It come across in the case study Siemens: Anatomy of Bribery 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: Anatomy of Bribery can leverage the sales team experience to cultivate customer relationships as Siemens Bribery is planning to shift buying processes online.
Need for greater diversity
– Siemens Bribery has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Siemens Bribery 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.
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 Bribery supply chain. Even after few cautionary changes mentioned in the HBR case study - Siemens: Anatomy of Bribery, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Siemens Bribery vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Siemens: Anatomy of Bribery 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 Bribery has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Siemens: Anatomy of Bribery, it seems that the employees of Siemens Bribery 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.
Lack of clear differentiation of Siemens Bribery products
– To increase the profitability and margins on the products, Siemens Bribery needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Siemens Bribery, firm in the HBR case study Siemens: Anatomy of Bribery needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, David P. Baron suggests that, Siemens Bribery is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Siemens Bribery has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Siemens Bribery even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Siemens: Anatomy of Bribery | 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: Anatomy of Bribery are -
Loyalty marketing
– Siemens Bribery 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Siemens Bribery 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 Bribery 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.
Buying journey improvements
– Siemens Bribery can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Siemens: Anatomy of Bribery 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.
Leveraging digital technologies
– Siemens Bribery 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.
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 Bribery can use these opportunities to build new business models that can help the communities that Siemens Bribery operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Siemens Bribery 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.
Learning at scale
– Online learning technologies has now opened space for Siemens Bribery to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Siemens Bribery can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Siemens Bribery can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Siemens Bribery to increase its market reach. Siemens Bribery 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.
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 Bribery in the consumer business. Now Siemens Bribery can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Siemens Bribery can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Siemens Bribery 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: Anatomy of Bribery, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Siemens: Anatomy of Bribery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Siemens: Anatomy of Bribery are -
Increasing wage structure of Siemens Bribery
– 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 Bribery.
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.
Technology acceleration in Forth Industrial Revolution
– Siemens Bribery has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Siemens Bribery needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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 Bribery in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Bribery 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.
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: Anatomy of Bribery, Siemens Bribery may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
High dependence on third party suppliers
– Siemens Bribery 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Siemens Bribery in the Leadership & Managing People industry. The Leadership & Managing People 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Siemens Bribery needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Siemens Bribery can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Siemens Bribery 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 Leadership & Managing People industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Siemens Bribery with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Siemens: Anatomy of Bribery 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: Anatomy of Bribery 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: Anatomy of Bribery 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: Anatomy of Bribery 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: Anatomy of Bribery 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 Bribery needs to make to build a sustainable competitive advantage.
