Siemens and Globalisation: MGMT20144 Essay on Business Expansion

This essay examines Siemens' approach to globalisation, highlighting its strategies, challenges, and opportunities in the international market. The analysis covers Siemens' global operations, strategic management, and the impact of globalisation on its business. It discusses the importance of market research, technological innovation, and strategic alliances in maintaining a competitive edge. The essay also explores the influence of political, economic, social, technological, environmental, and legal factors (PESTEL) on Siemens' global business strategy. It concludes that globalisation is crucial for Siemens' growth and emphasizes the need for continuous adaptation to changing market conditions and customer demands to achieve a leading position in the global market. The company's ability to balance local and international demands, foster customer relationships, and leverage innovation is key to its success in a globalised world.

Siemens and Globalisation

Contents
Introduction......................................................................................................................................3
Body.................................................................................................................................................4
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Introduction
This assignment is based on the globalization and the implication of its various aspects on
Siemens. Siemens is a German based company and is a manufacturing company dealing in wide
variety of products. Power generation technologies, medical technology, industrial and building
automation, railway vehicles, fire alarms, water treatment systems etc. Globalisation refers to the
process in which the companies operate their businesses on an international level. Advancements
in transportation and communication technology have prospered globalization. Globalisation is a
process which is linked to the social and cultural aspects. Siemens is a company operating its
business on a large scale and has its branches across the countries. For setting up the business
abroad, the company needs to analyze the key markets and formulate effective strategies to
expand its business. There are various factors which affect the business in the process of
globalization. The company is required to grab the available opportunities to grow and develop
on a rapid basis.

Body
Globalisation refers to the situation in which the companies increase their connection on an
international level with the help of the latest and advanced technologies and communication
systems. Globalisation is the process which includes various aspects of the business and the
environment. Goods, services, capital, data, and technology are some of the important elements
of the business which are highly required in the process of globalization. It includes building and
developing networks on an international level. Globalisation has many advantages for the
businesses across the countries but on the other hand, it has many disadvantages and challenges
are to be faced by the various businesses. The main aim of the businesses to trade worldwide is
to compete in the fast-growing competition in the rapidly changing business environment and
earn more profits and revenues. It is also to stabilize the business across the other countries and
serve high-quality products and services to the customers on an international level (Business case
studies, 2018). The generation of ideas and thoughts for the business is created with the help of
globalization. Siemens is a company which operates its business in approximately 190 countries.
It has many employees working in all its branches and with the help of them, the company has
achieved a better position in the international markets. The company operates its business in
different sectors and areas. The company has formulated various effective strategies to grow and
develop the business across the globe. A profit of €5.67 Billion was recorded by the end of the
year 2011, which is possible with the establishment and success of the business across various
countries. There are various opportunities available with the company in terms of globalization.
Appropriate research has to be conducted to collect the data and make strategies to establish a
business in different countries (Student share, 2018).
According to Sheffield, et. al. (2013), globalization is the process in which the products, as well
as services of the company, moves across the national boundaries of the country without any
hurdle. Under this process, it can also be said that the capital, information, and other factors
move across the other countries. Every business formulates effective strategies for adopting and
applying the concept of globalization and increases its share in the market. The companies are
restricted in the process of setting the business across different countries with imposing the
legislation and laws of the companies. The company ensures that the prices of the products are

not affected by the globalization and its processes. The prices of the products as well as services
are set on the basis of the demand and supply of the products across the countries. The strategic
management of Siemens is affected due to globalization and the level of competition prevailing
in the business environment. The company targets countries which have lower production costs
so that high-quality products are developed and made available to the customers at affordable
prices. The impact of globalization can be best studied with the help of the PESTEL model
(Sheffield, et. al., 2013). In the views of Juma (2014), the establishment, trading, and success of
the organization largely depend on the policies formulated by the government to enhance cross-
border transactions. Political systems of the countries are made much better so that the trade and
business can become easier. The most negative impact of globalization is the fluctuation in the
currency rates and the crisis in the currency rates of the countries. This is the economic factor of
globalization affecting the business. The economic recessions affect the economy of various
countries and their operations. This affects the business of Siemens to a large extent and also
their pricing policy. The best solution available to the company is to lower the cost of production
and positively respond towards the economic conditions and situations of the countries (Juma,
2014).
With the increase in globalization, the demands and preferences of the customers are going on
changing. The success of the business depends on the match of the products as well as services
with the culture of the country. For example, Siemens mobile is used by the customers without
any demand for the changes. This is possible as the company conducts research about the
changing needs of the customers before developing the products. This enables the company to
become the top innovators and compete from the competitors of the market. Technological
factors affect the business in the process of globalization to a large extent. Advanced and latest
technologies enable the companies to develop products, manage operations, and manage
distribution and marketing accordingly (Friedman, 2017). The latest technologies enable the
business to develop products within lower costs and sell them at affordable prices. It becomes
important for Siemens to develop products with the technologies and earn profits till the
competitors reach the set levels. Siemens Company makes sure that the equipment used and the
products which are developed by them do not harm the environment and its sustainability.
According to the audits carried out, the areas in which the modifications are to be made are
analyzed so as to cut the wastage of the resources and materials. Restrictions are imposed on the

operations and activities of the business in terms of legislation and policies developed by the
government of different countries. Increased market competition and advanced technologies
may affect the operations and profitability of the business of Siemens (Fritsch, 2015).
In the words of Juma (2014), it has been seen that the company has faced a major competition in
the market after entering globalization process. After facing the pricing issues in the market,
there are mostly two options with the Siemens Company to increase its share in the market, i.e.
either to lower the prices of the products or to brand itself as the developer of the premium
products. Siemens Company can brand itself in the market and make them available high-quality
products. With this, the company can become the leader in the market and come at the top
position in terms of high competition. Innovation is the major party of the development of the
business. Siemens is well known for its innovative products as well as services in the market.
Innovation brings high cost with itself which can be solved with the help of the strategic
alliances with other partners and use of the latest technologies. Unique products can be
developed by the company with the help of the strategic alliances and this can enable them to
enter into the new market segments. To match up the standards and compete in the highly
competitive business environment the companies can make use of the marketing campaigns
(Juma, 2014). Siemens Company requires developing good relationships with the customers as
with this it will become easier for the company to expand across the countries and develop a high
customer base. Taking advantage of the political support can be beneficial for the company to a
large extent. It might be difficult for Siemens Company to compete alone in the market as a
result of which it can adopt a cooperative strategy and come in partnership with the other
companies to conquer the major area of the market. Development of the energy efficient
products can enable Siemens to efficiently develop a share in the market higher than that of the
competitors. This unique idea will help the business to conquer large markets nationally and
internationally. This will help the company to trade across countries and improve its financial
performance to a large extent (Cetkovic & Zarkovic, 2012).

Conclusion
From the above report, it has been concluded that globalization is important for all the companies
for the overall development and growth of the business. Siemens is a company operating its
business on a large scale. It aims at becoming the global leader in the electronics, electrical
engineering, and other related products. To achieve a remarkable position in the market, it
operates its business in various sectors and areas. The company occupies the third largest
position in UK. The structure of the company is in such a way that it can focus on meeting out
the local demands as well as international demands with the available resources. Although the
company is headquartered in German, the UK branch is responsible for looking towards the UK
market. The management mainly focuses on developing good relationships with the customers
across the countries. Siemens company analysis the needs of the customers and acquires new
businesses to meet the customers’ needs.

References
 Business case studies, 2018. Meeting global and local needs. [Online] Business case
studies. Available at: http://businesscasestudies.co.uk/siemens/meeting-global-and-local-
needs/globalisation.html. [Accessed on: 19 March 2018].
 Cetkovic, J., & Zarkovic, M., 2012. Key challenges of future path of globalisation in
global economy. Intellectual economics. Vol. 6, No. 2. pp. 7–17.
 Friedman, U., 2017. Siemens CEO: America Invented Globalization—Why Give It Up?.
[Online] The Atlantic. Available at:
https://www.theatlantic.com/international/archive/2017/10/kaeser-siemens-trump/
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 Fritsch, S., 2015. Technological innovation, globalization, and varieties of capitalism:
The case of Siemens AG as example for contingent institutional adaptation. Business and
politics. Vol. 17, No. 1. pp. 125-159.
 Juma, C.J.O., 2014. The impact of globalisation on strategic management options at
Siemens AG. [Online] Research expert. Available at:
http://researchexpert11.blogspot.in/2014/10/the-impact-of-globalisation-on.html.
[Accessed on: 19 March 2018].
 Sheffield, J., Korotayev, A., & Grinin, L., 2013. Globalization: Yesterday, Today, and
Tomorrow. Emergent Publications. pp. 2-281.
 Student share, 2018. The actual and potential impacts of globalisation on SIEMENS:
Evaluation of possible strategies going forward which the company might use to respond
to the impacts of globalisation - Assignment Example. [Online] Student share. Available
at: https://studentshare.net/business/2795-interlational-business. [Accessed on: 19 March
2018].