International Business Strategy

This essay evaluates the impact of global mega trends on the business portfolio of Siemens and discusses strategies to remain competitive in the international marketplace. The mega trends include digital transformation, demographic changes, climate changes, globalization, and urbanization. Siemens has leveraged these trends to improve its business performance and expand its services.

Running head: INTERNATIONAL BUSINESS STRATEGY
International business strategy
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Considering the business environment nowadays, international business strategy
refers to the various plans that are managed to ensure proper commercial transactions
between two nations, furthermore develop a set of appropriate action plan to increase the
revenue generation capability and attain competitive advantage in business. The objective of
the essay is to evaluate the various mega trends that have created an impact on the Business
portfolio for Siemens, furthermore improve the strategic management approaches to remain
competitive within the marketplace (Siemens.co.uk 2019).
As stated by Watanabe et al. (2016), there are various global mega trends that are
associated with the potential impact created on the Business portfolio of Siemens and this can
often create scopes and opportunities for the organisation to sustain in terms of international
marketing and global business management. The company consists of various divisions
including the power and gas division, wind power and renewable division, power generation
division, energy management, building technologies and mobility divisions, which has helped
in improving the effectiveness of mega trends associated with the creation of scopes and
opportunities (Verbeke 2013). According to Buckley and Ghauri (2015), the global mega
trends should assist in creating a positive impact on the Business portfolio and improve the
efficiency of these divisions. Considering the vision of Siemens focusing on recognition of
relevant and long term changes, there is need to implement effective strategies for the
achievement of sustainable corporate outcomes though with the environmental scanning
(Matt, Hess and Benlian 2015).
From the assessment of the case study, it has been found that the global mega trends
have impacted the business functioning by creating influence on the Business Portfolio
aspects, which could be beneficial for exploiting the scopes and opportunities effectively too.
The global mega trends have been identified with the help of environmental scanning that has
created major scopes for implementing long term changes and at the same time, facilitated

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growth and development of business all throughout. As stated by Retief et al. (2016), the
global mega trends include the digital transformation, demographic changes, climate changes,
globalisation and urbanisation. All these mega trends are related to the trends, which enabled
creating scopes and opportunities to manage changes and increased the likelihood for
impacting the business performance on a positive note.
One of the major mega trend is the digital transformation, which has brought huge
improvements in the management of business functioning and this also facilitated the
production within quick time. The advancement of technologies has resulted in digital
transformation, which also led to the growth of connected devices and management of digital
data and information that are critical to the success of the business (Hamel and Prahalad
2017). With the help of this mega trend, Siemens has managed to accumulate data and
information to assess the market conditions and at the same time, streamlined the
manufacturing, production and installation processes in the Wind Power and renewable
division by meeting the criteria and requirements for entire energy conversion chain from
water to electricity with the delivery of effective products, services and solutions. For
example, the opening of financial services and healthcare division also boosted the business
performance through integration of diagnostics and therapy for better planning of health care
services. The digital transformation has also allowed the company to become expert in the
field of automated technologies and to manage digital data and information and ensured
digital integration within the business and also across the business boundaries (Forsgren and
Johanson 2014). The information about customers are acquired, which enabled strengthening
the business relationship with the customers, furthermore facilitated strategic partnership and
growth of business. Not only does the communication is facilitated, but also more than
280,000 devices are installed that are connected via a secure communication platform, which
improved the efficiency of electric grids and ensured better functioning. Other examples

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include cloud computing and also the development of a driverless metro system that could
manage IP communication, automation software and sensors for improving the business
processes though taking less time and without compromising on the quality too (Twarowska
and Kąkol 2013).
According to Shim (2013), the demographic changes have resulted in
industrialisation and the increased population has also created opportunities for Siemens to
focus on connectivity and create an extended talent pool for improving the efficiency of
workforce. The population growth has also increased the scopes for creating employment
opportunities for the people with lower level of income, thus improved the ability of people
and also the workforce efficiency. Many new candidates were appointed as part of the
workforce in various divisions, which further helped in meeting the demands and
expectations of people all over, thus, enhanced the brand image and reputation too. With the
increase in ageing population, the company has aimed at delivering health care services with
the use of new technologies for the purpose of medical imaging and to manage laboratory
diagnostics, which further helped in integrating the diagnostics and healthcare options to the
strategic planning and various treatment options within the healthcare too. The Healthcare
Division further helped in delivering solutions to enable growth of interconnected devices
and thereby facilitated transportation of medical equipment with ease (Sánchez-Riofrío et al.
2015). The solutions within the healthcare are more localised and have been made available
at lower cost for providing convenience to the ageing population, furthermore ensured
consultation by medical specialists too.
Gerasymenko, De Clercq and Sapienza (2015) argued that the changes in climatic
conditions often has resulted in scarcity of resources and also lack of availability of sufficient
amount of water, which affected the business functioning as well. This mega trend has been
considered to deal with the climatic changes and to ensure that proper transmission and

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distribution of power are done for managing the facilities and systems at low voltage or
power. For example, The Wind Power and renewables division are impacted with this mega
trend with the development of wind turbines by Siemens for reducing the costs associated
with the wind power generation and streamlined manufacturing and production process
(Darmani and Hanafizadeh 2013). Siemens introduced the wind power plat in the year 1991,
which also created scopes for managing the hydropower sector properly and maintained
abundant supply of water without any wastage. The wind power also acted as an alternative
source of energy, which also facilitated transmission and distribution of electricity for
benefiting the community and people within it (Siemens.co.uk 2019).
Considering the statement of Watanabe et al. (2016), the globalisation mega trend has
influenced the foreign direct investments and thus created enhanced scope and opportunities
for the business start its health care services delivery and financial services too. With the help
of foreign direct investments and engagement of shareholders, Siemens made sure to invest in
managing technological advancements in the field of health care industry. With the foreign
direct investments, the company also focused on managing gas turbines and used the
analytics based model for optimising the inventories, spare parts and machineries, which
helped in managing business functions at a faster rate. . With the increase in global
competition nowadays, Siemens also made sure to provide the healthcare division with more
power an autonomy for benefiting the people in need while at the same time, introduced the
financial services division through investments made by the shareholders or investors.
According to Matt, Hess and Benlian (2015), the investments made by the company should
contribute to the management of leasing activities, financing for the machineries and
equipment along with management of structured investments too. The globalisation mega
trend has thus created major opportunities for Siemens to develop public private partnership

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and even entered new markets to draw in more customers and deliver financials services for
increased customer satisfaction too (Yoon et al. 2014).
Lastly, the urbanisation is another mega trend that has contributed to the growth in
economy of the nation as well as the overall GDP globally. The company has invested in the
designing and improvement of infrastructures and facilitated decentralisation of power supply
and generation too. As stated by Audretsch et al. (2014), the automation technologies also
enabled Siemens to construct safe, secure and effective infrastructures and at the same time,
maintained stable ventilation unit, heating and temperature along with managing the air
conditioning devices to keep the buildings in a good condition. The urbanisation also
supported the decentralisation of services with the delivery of technical services and allowing
to open up new health care facilities for treating the people with illness and contribute to the
betterment of the society and healthy living too.
Based on the module theory, Geppert, Matten and Williams (2016) demonstrated the fact
that due to the business portfolio consisting of various divisions for Siemens the company has
managed to utilise the strengths properly and exploited the opportunities wisely. For a global
engineering giant like Siemens, it is a lucrative offer to extend its business operations all
across Germany and attain competitiveness within the engineering industry too. One of the
major, as stated by Verbeke (2013), is that the country has put strong importance to the
science and technology related aspects. Due to tis, the nation holds a great record for the most
number of engineering workers and currently possessing a great share of engineering
employees all across the European Union. There are good numbers of vacancies as well,
which can easily be a great scope or opportunity for a global engineering giant to make a
mark in the new marketplace, furthermore get the right mix of talent who can strengthen the
workforce efficiency and improve the performance standards of the organisation while
operating within the global business environment (Hamel and Prahalad 2017). Another major

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advantage is that with the great engineering facilities, machineries and equipment available,
the company would be able to conduct research and development for assessing the market
conditions as well as facilitate the global business expansion largely. To set up global
business in Germany, the owners would also find it easy because most of the trainees who
have come from all over European managed to attend the three year programme, thus,
increased their skills and ability to understand the German Engineering concepts and the
culture of the place too where the business would be set up (Forsgren, M. and Johanson
2014). Considering the mega trends and its impacts on the business portfolio, there have been
greater opportunities for the business organisation to sustain within the competitive
engineering business environment. The global engineering firm would also be able to secure
foreign investments, though depending on the nation where the expansion should be done,
furthermore could create convenience for the company to gain access to investment capital
(Twarowska and Kąkol 2013). Thus, the data and information about the market would be
easily accessible, which could also facilitate investment fund opportunities and raise the
financial condition of the organisation, which is also a major advantage for Siemens to
manage international business expansion in Germany (Siemens.co.uk 2019).
Retief et al. (2016) argued that in spite of the advantage, there are various drawbacks or
disadvantages of Germany as a home base for the global engineering giant too such as the
safety environmental standards are complex, which might create complexities while gaining
market access to the business management globally. The disadvantages though could be the
high salary expectations, which often could deter the company, newly set up, to arouse
interest among the workers and influence them to join the new engineering giant introduced
in Germany. The German market is decentralised, according to Audretsch, Lehmann and
Wright (2014), and thus the marketplace has been diverse too, which created cultural
differences and affected the ability of the engineering giant to make entry into the different

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global market segments with ease and effectiveness. The high rates of tax and complicated
tax laws, legal constraints caused with the high involvement of Government and regulatory
bodies could further create issues and challenges for the foreign company to manage business
globally with perfection (Twarowska and Kąkol 2013). The German hierarchy of business
has been extremely important for the companies and thus the organisational policies,
principles and procedures prescribed could be frustrating and complex to follow while
managing international business for Siemens (Siemens.co.uk 2019).
There are various sources of attaining competitive advantage for Siemens such as
the management of multiple divisions’ beyond its actual divisions such as the financial
services division and healthcare division, which has generated sources of income. The patents
and trademarks are managed properly along with considerable amount of investments done
for research and development to address the needs of customers and ensure meeting their
expectations too. The service delivery has been facilitated with the management of local
services and by arranging training and developmental sessions required to combine the
personalised healthcare services and deliver excellence in terms of operations too. The
continuous improvement programs have been implemented, which has enabled focusing on
the needs and satisfaction of customers, furthermore helped in maintaining quality (Sánchez-
Riofrío et al. 2015). The lifestyle value program also influenced making investments for the
management of programs and to contribute to the enhanced productivity, furthermore deliver
extensive health care services and improving those too to ensure high level of satisfaction
among the clients and ensure gaining competitive advantage in business too (Siemens.co.uk
2019).

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