Siemens Market Entry Strategy for Wind Power

This assignment analyzes Siemens' potential entry into the U.S. wind power market. It examines market trends, regulations, and competition, recommending a strategy for Siemens, including establishing an R&D center in Colorado to gain a competitive edge.

Running head: ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
Issues in Global Business and Strategic Concepts
Name of Student:
Name of University:
Author’s Note:

1ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
1.0 Executive Summary
The study is intended to highlight the strategic alliance and entry strategy of Siemens in the
Wind Power Division. The different types of the considerations made for the company has been
further seen to be based on International, Transnational, Localisation and Standardisation
techniques. It has further revealed the country wise implementation model in U.K. and U.S.A.
Some of the other aspects of the strategy of Siemens have been further depicted with BCG
Model on Siemens Wind Power. The important consideration of the report has further included
Porter’s 5 Forces strategy with Siemens. The report has also included some recommendations for
approval of the strategy. The main recommendation for Siemens has been made with entering the
market of U.S. Based on the existing operations in U.S., Siemens is discerned to be having an
immense amount of potential for construction of wind based turbines. The construction of Wind
Turbine (R&D Centre) in the Colorado region will provide a competitive edge over other
companies in the next few decades. Moreover, the operation in U.S. the company has various
scope of improvement as per the U.S. DOE’s National Renewable Energy Laboratory situated in
Boulder, CO.

2ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
2.0 Table of Contents
3.0 Introduction................................................................................................................................3
4.0 Political Economy Views on Siemens.......................................................................................4
5.0 Strategy for Siemens Wind Power Division..........................................................................5
5.1 International...........................................................................................................................5
5.2 Transnational.........................................................................................................................6
5.3 Localisation............................................................................................................................6
5.4 Standardisation......................................................................................................................7
6.0 Country Attractiveness Model...................................................................................................7
6.1 United Kingdom (UK)...........................................................................................................7
6.2 USA.......................................................................................................................................8
7.0 BCG Model on Siemens Wind Power.....................................................................................10
8.0 Porter’s 5 Forces......................................................................................................................13
9.0 Recommendations....................................................................................................................15
10.0 Conclusion.............................................................................................................................17
11.0 References..............................................................................................................................19

3ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
3.0 Introduction
The demand for the global energy requirements has been discerned to increase at a rate of
21% until 2021. The main quest for the search of the renewable energy has been depicted with
rapid development of the offshore wind power which has been acknowledged with the future
needs. In the recent times, there is a significant source of sustainable source of energy observed
with the increasing global issues. Based on the historic evolution of previous few decade it has
been seen that the various types of the requirements for the global demand for the sustainable
energy source is associated to the reliance of the energy sector on the wind power to be the most
favoured solution. The same has been developed as a valuable source of renewable energy all
over the world. The average offshore of the wind project capacity has been depicted to be 6 MW
in 1990 which has increased to 350 MW at present. It has been further depicted that there been
enormous potential of the offshore wind energy. This particular consideration can be met with
more than seven times of the Europe’s energy demand. The United States energy demand has
been further identified as more than four times, with the present energy demand.
The report is intended to highlight the strategic alliance and entry strategy of Siemens in
the Wind Power Division. The different types of the considerations made for the company has
been further seen to be based on International, Transnational, Localisation and Standardisation
techniques. The study has further revealed the country wise implementation model in U.K. and
U.S.A. Some of the other aspects of the strategy of Siemens have been further depicted with
BCG Model of Siemens Wind Power. The important consideration of the report has further
included Porter’s 5 Forces strategy with Siemens. The report has also included some
recommendations for approval of the strategy.

4ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
4.0 Political Economy Views on Siemens
The increased political risk in Europe is negatively affecting the companies’ investment
plans and escalating the concerns on slowdown in the economy globally. This situation of
dampening investment with the political risk has been already warned by Siemens’ Joe Kaeser.
According to his views investment is about related events in the future. The biggest economic
damage is due to the inflationary pressures in the economy. The net effect of this has been seen
with a negative effect on the Group’s business and decreasing amount of the consumer
confidence. According to his views the responsibility and the duty of the various types of the
political issues need to be taken care of with a strong support of the chief of Siemens’ UK
operations, Juergen Maier. He has suggested that public should openly discuss on Britain leaving
the EU, which is directly related to the referendum on the issue (Ft.com, 2017).
Political risk is considered to be different in various regions across the globe, with
significant observations showing low economic growth in the investment. The stable nature of
the Germany based industrial conglomerate Siemens AG has shown political views with S&P
Global Ratings. The main expectation of the group has been shown with relatively steady and
economic and the political risk mainly in the operating environment. As per the various aspects
of the political views the group needs to maintain the S&P Global Ratings-adjusted ratio from
funds from operations (FFO). The debt has been further discerned to be on the higher side with
45%-60% in the next few years. The main impact on Siemens has been further depicted with
slow global economic growth aspect particularly in Asia. The continuous improvement of the
company has been further seen to be based on the consideration of slow global economic Growth
and the low investment made by the commodity driven market.

5ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
It has been further depicted that the various types of uncertain levels of the investment
has been based on the global general industrial markets which has been seen in the light of the
expected low growth and the political risk. In addition to this, the potential for the renewable
energy remains a high concern. It has been agreed by many observers that the German
stakeholder system for the corporate governance is under considerable amount of pressure. The
convergence theory has been seen to be inconsistent in nature and this is further seen to be based
on the globalised financial and products market. The important aspects of the companies needs to
be updated with the behaviour pattern focused towards Anglo-Saxon corporate governance
approach. The various approaches of the articles have been approached on tackling these claims.
The convergence theory has been further seen to be based on the international economy and the
variety in the capitalism. This approach has been able to examine the various types of the nature
of the incentive structure in the national institutions (Devine-Wright, 2014).
The various types of the other considerations of the Political Economy Views on Siemens
need to be considered with the change in the law and order in U.S. It has been discerned that in
general U.S. is susceptible to the changes in the Federal system and this has been further seen to
be having a direct impact on the overall contribution towards the growth of the business. The
company policies and the tax systems are seen to be having a direct impact on the adoption of the
wind power initiatives.
5.0 Strategy for Siemens Wind Power Division
5.1 International
Siemens is responsible for delivering highly cost efficient and reliable wind turbine
system to meet the various types of environmental and business needs. It has been further

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identified with more than 35000 megawatts of wind power which is able to deliver renewable,
clean and onshore installations of renewable energy unit around the globe. The important form
of the strategic alliance has been discerned in form of merger of Siemens Gamesa Renewable
Energy with Gamesa Corporación Tecnológica and Siemens Wind Power on April 2017
(Tecnologías, 2017).
5.2 Transnational
The main consideration of the transnational initiative has been considered with the setup
of world’s first offshore wind power plant setup in 1991 in Denmark. In the recent times
Siemens has been able to set the record for having the world’s largest offshore wind power
plants, by establishing 630 MW project in London. It has been further able to feature 175
Siemens 3.6 megawatt wind turbines. The company has been further seen to occupy a leading
position as world’s largest single onshore order, for 1,050 MW order from MidAmerican Energy
based on U.S. and various types of the other plants in the lowa region (Siemens.com, 2017). The
successful implementation has been considered with the consideration of projects based on large
and small, onshore and offshore, for the next thirty years.
5.3 Localisation
Siemens has been successfully able to depict the first operations with the islanded grid by
the use of stable, uninterrupted and renewable power in Germany. This has been mainly possible
due to the presence of Electricity pioneers in Wildpoldsried, Allgäu, Germany. The low voltage
network has been further seen to be depicted based on various types of the important
consideration which has been set to be taken based on the various initiatives for maintaining
intelligent power distribution grid (W3.windfair.net, 2017). The efficient and the reliable
operations have been further seen to be depicted based on the innovation solution in every

7ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
application of the wind power system based in Germany. In Germany the successful
implementation of Wind power energy system has been considered with offering of innovative
solution for almost every application. The worldwide application of the technologies in the local
aspects is seen with the installation of approximately 12,300 turbines with a overall capacity of
20,000 MW. It has been further seen to be discerned that in Germany there has been more than
1,400 wind turbines and the overall ratings has been further seen to be rated as 1,500 MW.
Siemens Wind Power has seen to be specialized in the improvement of direct drive with the
technology.
5.4 Standardisation
Standardization and modularization are regarded as basics for the platform approach,
which has allowed the streamlining of the installation and the manufacturing process for
maintaining a lean design process. The main consideration for the standardization approach of
the company has been further seen to be based on the wind industry’s standard for achieving
leanness, robustness, and lifecycle profitability. The low weight of the offshore standards has
been able to benefit the company in terms of the significant cost benefits as per installation,
shipping and substructure requirements. The robust standardization process has been further
identified to explore the IA and IB standards. These wind turbines can be identified with the
deployment in all known offshore locations (Siemens.com, 2017).
6.0 Country Attractiveness Model
6.1 United Kingdom (UK)
Siemens U.K. wind is identified as the key player in influencing the revival in U.K. The
leading technological development in the country has been able to create jobs and develop the

8ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
demand of expanding the business rapidly in offshore wind industry. The significant nature of
investment initiatives has been taken in form of the facilities, people, and research and
development. The main attractiveness in the U.K. has been mainly depicted due to the various
types of initiative related to the assembly and services provided at Green Port Hull. The world
class initiative in the energy sector has been done with the establishment of Customer Support
Centre and the energy service training centre based in Newcastle.
The Crown Estate landlord based in U.K. has announced for the proposition of nine
offshore zones. These are further seen to be varying in terms of number and the size of the wind
farms which needs to be developed. The Round 2 expansion is related to the Scottish Territorial
Waters projects. These developmental activities have been seen to be evident in terms of the
overall output of the planned wind farms in UK with almost 50 GW. This has been further seen
to be represented based on the output planned for UK. The main strategic alliance of the
company in UK has been identified with the development of 4GW for the wind farms in the
“Hornsea” zone off the UK’s Yorkshire coast. The company has taken several initiatives in the
engagement of U.K. renewable in the earlier phases. Some of the main forms of the portfolio of
the company has been further seen to be identified with London Array Offshore Wind Farm,
which is considered largest in the world (Siemens.co.uk, 2017).
6.2 USA
The main form of the wind power facility based in America has been identified with
Hutchinson, Kansas: Wind turbine nacelle assembly facility. The initial production of this has
been considered with nacelles and hubs for 2.3-MW wind turbines. The main form of the
capacity of the production is planned at 1500 MW every year by 2012. The first wind based
turbine nacelles is scheduled to leave the plant of the company in December 2010.

9ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
The company has been further identified to take several initiatives based on Lawrence
Livermore National Laboratory to conduct the research on the output of the wind farm. The main
effort has been further allowed the predictability of the output of wind farm. This has been
further seen to be considered as per improved predictability of load balancing and the reserve
which has been based on utility grid operators and wind farm owners. The main initiatives have
been further seen to be considered as covering marketing, transportation, engineering and safety
of the wind power business in America. The opening of the Houston, Texas: Service Centre in
2006 has been identified as another major initiative taken by the company. It has been seen that
there has been approximately 400 Houston based employees involved actively in the project sites
across America. The training, storage solution, distribution solution and the service tools has
been further seen to be considered as per opening off the service centre in 2006. The supplier of
the mechanical drives, generators and coupling and the two plants in Elgin, Illinois is based on
the consideration of 100000 sq feet and 170000 sq feet area. The collaboration of the company
has been further seen to be based on the leading wind drive train developed by Winergy Drive
Systems Corp (Usa.siemens.com, 2017).

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7.0 BCG Model on Siemens Wind Power
Figure: BCG Matrix of Siemens Wind Power
(Source: Whitehead, 2015)
Star
The various types of the products associated to the wind power have been identified with
high growth and high market share.
Onshore Geared turbines

11ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
Growth
 Proven and reliable technology in terms of the performance
Market Share
 There is no individual supplier of this technology with Nominal power of 2.3 to 2.625
MW
 It has been the proven workhorses for capacity limited regions
Cash Cow
The various services in this category has been categorised as low growth and high market
share.
Onshore Direct Drive turbines
Growth
 The power of onshore direct drives turbines has been seen to be having a limited growth
with Nominal power: 3.15 to 3.6 MW
 Expensive
 The quality is seen to be optimized for all kinds of environment
Market Share
 The main market for this turbine is based on wind classes IEC I to IIIA
 Some of the highly demanding range of products for this turbine includes SWT-3.3-130
LN, SWT-3.6-130, SWT-3.2-108, SWT-3.4-108, SWT-3.2-101 and SWT-3.4-101

12ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
Question Mark
The services or the products are identified with high growth and low market share.
Offshore Direct Drive turbines
Growth
 With a nominal power of only 6.0 to 8.0 MW, the growth potential for this turbine is seen
to be of real concern
 The increased profitability along with a low risk offshore approach has been identified as
the main USP of the product
 Ensures implementation of lean technology
Market Share
 Range of suppliers and system integrator
 The main interest has been observed in terms of wind classes IEC IA and IEC IB
Dog
Some of the main interpretations of the Dog phase of Siemens have been mainly seen to
be identified as for the Offshore Geared turbines. The development of the power has the potential
to serve various aspects of the home users. This is mainly considered by the powering of the
home appliances.
Offshore Geared turbines
Growth

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 The nominal power of this type of turbine has been identified in only one variant of 4.0
MW
 The main reason for the low growth has been identified with lack of variety and
investment robustness
Market Share
 The main interest of the buyers has been observed in terms of wind classes IEC IA and
IEC IB
8.0 Porter’s 5 Forces
Degree of rivalry
The company has been identified to perform in a highly competitive environment along
with fierce competitors such as General Electric (GE). The level of the competition is mainly
seen with big players dominating the market. In addition to this, the competition level of the
company has been seen to be particularly high with the involvement of several other such
companies in the Wind power division.
Bargaining power of customers
The different types of the considerations for the bargaining power of the customers have
been seen to be particularly evident with the highly specialized products. This is mainly due to
the highly specialized products as buyers with the largely operating government enterprise or
large entities. It has been further able to provide the adequate space for the customers to bargain
based on the limited products and consideration of the highly specialized services provided by
the large concerns.

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Bargaining power of suppliers
The various types of the suppliers have been considered as per the various types of the
suppliers of the raw materials or the different part manufacturers who are having little
knowledge. The various types of the suppliers of the raw materials based in Germany, UK and
US are observed to be having a little bargaining power.
Threat of new entrants
The different types of the equipments of the company are seen to be based on the various
types of the considerations as per the early stage of entry in the industry. The entrant of the new
players for Siemens has been identified to be considerably high in nature. It has been further
discerned that both Siemens and GE has dominated the industry for decades. The main
orientation of Siemens is based to be running on high technology. It has been further discerned
that the entrant barrier for Siemens is considerably high due to the fact that the company
dominates for the industry for a long time.
Threat of substitutes
The different types of the popularity of the company has been further seen to be based on
how the various types of the new and the smaller companies has been able to enter the market
with the implementation of the low cost energy and technology. It has been thus seen to easier to
evaluate the different types of the substitutes which are being taken into consideration at a
smaller scale.

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Despite of the fierce completion in the industry it has been identified that the company
has been able to face based on the pressure form the various types of the smaller companies. This
has been further seen to be based on the connected brands having quality in several markets. The
steady nature of the financial performance has been able to be managed with the required
supplies with the financial performance and managing the same with the financial flexibility in
the year to come. It has been further discerned that the strong research of the company is based
on the various types of the initiatives for the research and developmental capabilities and strong
sense of the demands from the suppliers.
The various types of the threat of substitutes has been further identified with the
incorporation of the new technologies from the various types of the smaller companies.
9.0 Recommendations
The important considerations of the recommendations for the company has been further
seen to be based on the various types of factors which has been able to be strategized based on
the consideration of discussed strategies on the report.
The potential of the wind energy is seen to be huge and the company has been further
seen to be committed with driving potential with the future growth of the renewable power. The
various types of the growth analysis of the company have been further seen to be considered
based on the reduction in the project risk by pushing the boundaries. The company has been
further able to consider the integrated solution with the consideration of the entire value chain
which has helped the customers to transform themselves in terms of transforming profitable asset
for having a sustainable future.

16ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
The main recommendation for Siemens is to enter the market of U.S. Based on the
existing operations in U.S., Siemens is discerned to be having an immense amount of potential
for construction of wind based turbines. The construction of Wind Turbine (R&D Centre) in the
Colorado region will provide a competitive edge over other companies in the next few decades.
Moreover, the operation in U.S. the company has various scope of improvement as per the U.S.
DOE’s National Renewable Energy Laboratory situated in Boulder, CO. However, for the
different types of the centre based in US, Siemens needs to reduce the cost and value which has
been seen to be generated based on the important consideration of the increased value and
lowering the cost. The Orlando headquarters for the Siemens wind and power has been further
seen to be taken into consideration as per covering the larger share in the market.
The main rationale for not selecting U.K. has been further seen to be covered as per the
uncertainty in the Brexit Vote. The manufacturing hub is seen to employ more than 1000 people
but it cannot affect the various types of the decisions which have been seen to be made by the
management team to improve on the existing strategies. The main form of the tactics in the UK
operations of the company needs to be taken based on improving the UK and Europe relations.
This will be conducive in facilitating the growing support of the company as per the blueprint to
the export. Some of the various types of the considerations need to be taken with the strategic
alliance with the wind and power companies such as Forewind Ltd, Seagreen Wind Energy Ltd
and Moray Offshore Renewables Ltd. Some of the main recommendations of the strategic
alliance with the U.S. wind and power companies may be considered with National Wind, UGE
International, EDP Renewables North America and E.ON. The consideration of the strategic
alliance with the aforementioned wind and power companies will be conducive in improving the
U.K. operations even further.

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10.0 Conclusion
Political Economy Views on Siemens has been see with increased political risk in Europe
is negatively affecting the companies’ investment plans and escalating the concerns on
slowdown in the economy globally. The various types of the other considerations of the Political
Economy Views on Siemens need to be considered with the change in the law and order in U.S.
Strategy for Siemens Wind Power Division has been further identified with more than 35000
megawatts of wind power which is able to deliver renewable, clean and onshore installations of
renewable energy unit around the globe. The important form of the strategic alliance has been
discerned in form of merger of Siemens Gamesa Renewable Energy with Gamesa Corporación
Tecnológica and Siemens Wind Power on April 2017.The main consideration for the
standardization approach of the company has been further seen to be based on the wind
industry’s standard for achieving leanness, robustness, and lifecycle profitability. The low
weight of the offshore standards has been able to benefit the company in terms of the significant
cost benefits as per installation, shipping and substructure requirements. The increased nature
of the wind power and solar power has been considered with increased demand with little
amount of investment. More than 75% of the sales of the company are evident with limited
future. This is further seen to be based on the permission of the fossil power. The services or the
products are identified with high growth and low market share. Increased size and the number of
the transportation system of the mega cities have been seen to be conducive for the growth in the
wind power energy sector. It has been further seen to be involved with the networking of the
different mode of transports.
Based on the interpretations, the study has recommended Siemens to enter the market of
U.S. Siemens is discerned to be having an immense amount of potential for construction of wind

18ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
based turbines in U.S. The construction of Wind Turbine (R&D Centre) in the Colorado region
will provide a competitive edge over other companies in the next few decades.

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11.0 References
Devine-Wright, P. (Ed.). (2014). Renewable Energy and the Public: from NIMBY to
Participation. Routledge.
Erneuerbare Energie Windenergie Mecklenburg Vorpommern Rostock. (2017). Members
WindEnergy Network Germany. [online] Available at: http://www.wind-energy-
network.de/en/memberprofile/siemens.html [Accessed 2 Sep. 2017].
Independent power grid as a milestone for an energy transition project .
(2017). W3.windfair.net. Retrieved 2 September 2017, from http://w3.windfair.net/wind-
energy/pr/26042-independent-power-grid-as-a-milestone-for-an-energy-transition-project
Siemens UK - About Round 3. (2017). Siemens.co.uk. Retrieved 2 September 2017, from
http://www.siemens.co.uk/en/wind/about-round-3.htm
Siemens.co.uk. (2017). Siemens UK - About Round 3. [online] Available at:
http://www.siemens.co.uk/en/wind/about-round-3.htm [Accessed 2 Sep. 2017].
Siemens.com. (2017). Retrieved 2 September 2017, from
https://www.siemens.com/content/dam/internet/siemens-com/global/market-specific-
solutions/wind/brochures/siemens-wind-power-offshore-dd-platform-brochure-web-
doublepages.pdf
Siemens’ Joe Kaeser warns political risk is damping investment. (2017). Ft.com. Retrieved 2
September 2017, from https://www.ft.com/content/a2fac742-8f6e-11e5-a549-
b89a1dfede9b

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Tecnologías, D. (2017). Gamesa / About us / History. Gamesacorp.com. Retrieved 2 September
2017, from http://www.gamesacorp.com/en/about-us/history/
Usa.siemens.com. (2017). [online] Available at:
http://www.usa.siemens.com/pool/about_us/obama_visit/Siemens-Wind-facilities-in-the-
US.pdf [Accessed 2 Sep. 2017].
Whitehead, J. (2015). BCG (Growth Share) Matrix. Wiley Encyclopedia of Management.
Wind Power. (2017). Siemens.com. Retrieved 2 September 2017, from
https://www.siemens.com/global/en/home/company/about/businesses/wind-power.html