Analysis of Siemens' Global Business Environment Report

This report provides a comprehensive analysis of Siemens' global business environment, examining key factors such as cost, market dynamics, and competition. It delves into strategic challenges including ethical business practices, organizational structure, and public relations. The report explores the influences of globalization on Siemens' organizational governance and leadership, as well as the impact of key factors on the global business environment. It further analyzes strategic challenges in the context of risk and diversification, and concludes with an overview of decision-making processes and routes to internationalization. The report highlights the importance of understanding and adapting to the global business environment for Siemens' continued success, emphasizing the need for effective strategies to navigate challenges and capitalize on opportunities in international markets. The report discusses stakeholder engagement, including ethical and sustainable globalization on organizational functions.

Global Business environment

Table of Contents
INTRODUCTION .....................................................................................................................3
TASK 1 ....................................................................................................................................3
P1 Key factors of cost, market, environment & competition ................................................3
TASK 2......................................................................................................................................5
P2 Explain strategic challenges .............................................................................................5
M1.Impact that key factors ....................................................................................................6
M2. Strategic challenges in context of risk and diversification ............................................6
D1 Global business environment .........................................................................................7
TASK 3......................................................................................................................................7
P3 Influences of globalisation ...............................................................................................7
M3 Stakeholder engagement .................................................................................................9
D2 Strategies .......................................................................................................................10
TASK 4 ...................................................................................................................................10
P5 Different ways of decision making ................................................................................10
P6 Routes to internationalisation .........................................................................................11
M4 Key barriers ..................................................................................................................12
CONCLUSION........................................................................................................................12

INTRODUCTION
Global busiess environmnt is important for an organisation to perform its business
activities at global level so that it can generate more revenue. In this report chosen
organisation is Siemens which deals in electrical and electronics business, it is incorporated
in Germany. The aim is to capture more market share by globalisation. It covers the various
topics such as: key factors of cost in context to globalisation, market & environment, strategic
challenges, market influence on company’s culture, structure and functions. Influences of
ethical and sustainable globalisation on organisational functions are also discussed. Apart
from this effect of globalisation is also analysed on organisational decision making and
strategy.
TASK 1
P1 Key factors of cost, market, environment & competition
Globalization is concept which helps the companies to expand its business. It
integrates national economies through trade, capital flow, investment, technology etc.
Through it Siemens can grab more market share in other countries and generates more
income. There are various factors which can affect cost, market, environment and
competition.
Cost factor: An organisation can focus on economics of scale by which it can produce goods
in bulk so that cost per unit can be minimized. Siemens can apply this concept and use
innovative technology so that its production expenses will reduce so that price of finished
goods can also be decreased. As a result it can lead in the market by providing electronic item
at reasonable value so more number of consumers can purchase it. So that company can
generates more value as profits. Siemens can enter in newly industrialised countries where
transportation system has advanced and labour cost is low. It helps the organisation to expand
its reach and minimum labour expanses can reduces the overall cost of product. As a result it
can produce products at reasonable price and generate more income. It is related toglobal
trade and commerce. As comapny invest 3.925 dollars in reseach & development in the year
year so thta it can analyse that what steps should be taken so that cost of production can be
reduce and organosation can generate maximum profits.

Market drives: Company can choose those industrialised nations in which per capita income
of people is high so that their style can be superior. Due to which they can afford the higher
value of electronic items and Siemens can maximize its sales. As a result they can grab more
market share and increase its revenue. It can increase its distribution channel in various
countries so that company’s products can reach to more number of consumers. So that
market presence will maximize and it can increase its revenue and untapped areas can be
covered by organisation.Siemens can advertise their brand so that more number of persons
can be aware from the products of organisation. As a result brand image of company can
improve and it help to the corporation to increase its goodwill and it maximize the trde and
commerce of organisation. As organisation is a prominent market of medical diagonostics
equipment & its medical health care departmnet generates approx 12 % of corporation's total
sales.
Government drivers: All countries have different tariffs as per rules and regulations of
government and its policies. Siemens can target those nations in which tax rate is minimum
and less legal compliances so that it have to pay less tax. As a result revenue of company
does not get affected. It can enter in those countries where government allows privatisation so
that it can take benefit of it and start its own business. As a result it can earn more profits.For
example, it Siemens does not follow envirnmental law than it can cannot adjust in the culture
of other countries.
Competitive drives: It can enter in those markets where competition is less so it an
opportunity for it to grab more market countries in which less competition so that it can
survive in that nation for a long time. Siemens can try to create competition by providing
quality products at reasonable price. As a result it can create monopoly in the market and earn
maximum profits. It can generate more revenues by brings innovation in its technology so
that efficiency and productivity can be maximized. So that it can capture and lead in the
market. These all factors drives to global trde and commerce. To beat the competition it
makes joint venture with Zhushou which belongs to China so that it can produce AC drive
electric locomotivtives. It is beneficila for the growth of comapny and it can exopand its
market share.

TASK 2
P2 Explain strategic challenges
It is not easy for an organisation to operate its business activities at international level.
To perform at global platform, there are various factors which are needed to be consider if
company want to achieve success. Siemens can protect itself by the negative impact of
challenges which can occur from globalisation. There are various strategic challenges which
can faced by it and they are as follows:
` Ethical business practices: It is the most common issue which is faced by an
organisation. Ethical business practices in areas as environmental stewardship, corruption,
product safety, labour and regulatory compliances. These things can influence the business in
both ways positive and negative. For example, brand image of Siemens can be affected by
reports that it provides low wages to employees and involves in harassment activities. So it is
important for the company to follow ethics as per the rules of different - different countries.
Organisational structure: It is difficult for an organisation to effectively establish its
business in new countries within the value chain and corporate structure. All companies have
different structure which is followed by them. So it can affects the strategies of corporation.
Change in structure can hamper the efficiency and productivity of corporations.
Public relations: It is not easy to create to public image among the people. To build
public relations in new country is a very challenging task for an organisation. It can be build
by providing quality products and services to consumers. If the strategies of Siemens does
not able to make it possible than it can face the problems. As a result their sales can be
reduced. As comapany focuses to build strong and healthy relations with people, it emphasis
to provide those products which fulfil the demands of consumers such as: AC drive electric
locomotivtives.
Legal and regulatory structure: All countries have different laws and regulations so
it is difficult for an organisation to understand and follow all compliance as per the rules of
that particular country. If Siemens make strategies that they follow regulations as per its own
countries than it can create trouble for it. If its group countries does not work according to
law than it have to pay fine for it.. For example, If Siemens have apply participative
leadership style and involves it workers in decision making process so that innovative ideas

can come up but its group companies does not do it. To maintin legal structure, Siemens is
following legal compliances of Chain when it make joint venture with Zhushou company.
Leadership : Leaders of organisation shold have proper knowledge about the culture
of country. As a result company does not face the problems rlated to culture. If leaders
doesn’t take suggestion from employees and do not want to include them in decision making
process. As a result their strategy cannot work according to the plan and their efficiency can
decrease.
M1.Impact that key factors
Global business environment can be affected from various key factors such as cost,
market, govrnment and competitions. Benefits and challenges are as follows:
Cost: It can be minimize if economies of scale can be achieve by the organisation and it is a
benefit for it because it helps to maximize profits. It is difficult for company to analyse the
cost effective factors and it’s a challenge for organisation. As Siemens acquired rail division
of invensys in 2012 so it spend £1.7 billion which is the cost of acquring.
Market: Globalisation help the countries to capture more market share so that it can earn
more revenues and it is a benefit for company. It is a challenge for the organisation to
effectively use its distribution channel to reach its products to a large group of people. To
capture high market share in China Siemens make joint venture with Zhushou CSR Times
Electronic Co. Ltd
Government: If company follows the compliances as per the rules and regulations of
government than it can survive for a long time in the market. So it can maximize its profits
and it is a benefit for of globalisation. If organisation does not follow the legal compliances
as per the rules of various countries than it cannot survive for a long time in the market. So it
is a challenge for Siemens to maintain and follow the regulations according to laws of various
nations.Environment and competition factors: If there are huge competition in the market
than it can be difficult for the comabny to survive in the marke. In absesce of environment
analysis Siemens does not operates its busines in various countries
M2. Strategic challenges in context of risk and diversification
Strategic challenge means those pressures that exert a decisive impact on a company’s
likelihood of future success. Normally it is externally driven. But organisation can face also
internal strategic challenges. External issues related to market need or consumer expectations;
technological or product changes; societal or financial and other risks and needs. Internal
strategic challenges can associated with capabilities of company and human resource. There

is risk associated with it because it can hamper the efficiency and productivity of corporation.
Through it supply can also get affected as a result it can decrease the sales of corporation.
The main strategic challenge which is faced by Siemens, to produce quality products at
reasonable price so that it can enter in market of China and produce AC locomotive traction
components.
D1 Global business environment
It is important for an organisation to effectively perform its business activities so that
it can effectively perform at global level. So it can take benefit from globalization.
Opportunities are as follows: To grab more market share and to earn more profits.
Challenges are as follows: Cultural differentiation and Government rules and regulations in
different nations & differentiation in organisational structure. The main challenge which is
faced by organisation is to capture high market share by providing quality products at
minimum price so taht it can survive in intrernational market such as: Europe and China.
TASK 3
P3 Influences of globalisation
Organisation governance is set of rules, regulations and practices by which an
organisation can be directed and controlled. It involves protection of interest of stakeholders
like: management, consumers, suppliers, shareholders, government and financiers.
Leadership is a style of management to lead and motivates the employees so that they can
work effectively. Siemens can influences from organisational governance and leadership and
its impact are as follows:
If company has different management and leadership style to encourage its employees
so that they can work better. For example, If Siemens has follow participative leadership style
means they involves employees in the decision making process so that better and creative
ideas can come up. It helps the organisation to make effective and good decisions and
workers feel happy because they think management fives importance to their ideas and its
motivates them to perform better as per targets of company. If it expand business in any other
country and manager of that nation does not want to involve staffs in decision making
process.
As a result workers feel de-motivated and it reduce the efficiency of them and it
hamper the productivity also. So corporation can influence from globalisation. It is the duty

of company to follow the rules and regulations as per the law of country. If Siemens expands
its business in other nations and does not maintain governance according to the rules of that
nation. In that case it can survive in theat country for a long time and government of that
country can impose fine on it. As a result its business activities can get affected from it from
globalisation (Chand and Tung, 2014)
Organsational structure and leadership: Dur to the globalisation impact organisation
have to make the rules and regulations as per the need of that country where it wnat to start
its business. Ledership can be influence because they have to follow leadership style as per
the rules of that nation,
Structure: It refers to a system that outline how certain activities are directly in order
to achieve the objectives of a company. It can influence the organisation and its efficiency.
For example, If Siemens has follows functional structure in which each portion of the
company is grouped as per its propose. In this structure each department rely on the
knowledge and talent of its staffs and also support them. If it expand its business in other
country and the manager has follows divisional structure. As a result organisation efficiency
goes down because of it and it does not take benefit of globalisation because of different
organisational structure and it conflicts with each other. So efficiency and productivity can
minimize of that corporation.
Culture: It includes policies, rules and, ethics beliefs of organisation which is made by
it and all members have to perform according to it. For example, If Siemens has set standard
that employees have to work 5 days a week. When its enter in a new country than it have to
follow the culture of that nation and in that country staff have to work 6 days a week. So its
affects the productivity of company and it can produce less products. Globalisation can
influence the organisational culture of corporation and it can varies as per the need of
organisationFor example, If Siemens has set standard that employees have to work 5 days a
week. When its enter in a new country than it have to follow the culture of that nation and in
that country staff have to work 6 days a week. So its affects the productivity of company and
it can produce less products.
Functions: Siemens expand its business at global level than it needs effective
promotional strategy which is performed by marketing department. If its marketing team does
not able to understand the culture and habit of people in that country where they want to start

its business than organisation cannot perform its marketing function properly and it does not
grab more market share. So globalisation can influence the functions of company.
P4 Ethical & sustainable globalisation
Ethics are associated with values and beliefs of an organisation which suggest it what
is right and what is wrong (Ethics. 2018). It is based on morals of company. Siemens has its
own ethics which are essential to follow by the members of this company. It helps to a
corporation to build good image in the market. Sustainable globalisation refers that an
organisation can able to perform at global level and take benefit of it. As a result it can earn
more profits. If the member of this company follow ethics than work can be done as per the
requirements of company and objectives can be achieved through it (Cavusgil and Knight,
2015).
For example, If Siemens has follows the ethics and according to it they does not
compromise with the quality of products and provide best service to consumers. In that
casemore number of customers can attract towards corporation because it can able to satisfy
their needs wants. It helps the company to capture market share and it is a effective move
towards success and growth. Through it sustainable globalisation can be achieve because it
can able to satisfy the persons and their desires which help it to perform at international level.
As a result its profit can enhanced and it can create its good band value in the market. It help
the corporation to goodwill. So for the success and growth ethics play a vital role and help to
an organisation to gain sustainable globalisation. Through it organisational functions like:
marketing , finance, HR etc can perform better as per the requirement of Siemens. Efficiency
and productivity can be increase by it. Coordination and communication can maximize as a
result targets can be achieve by company as per the require time frame.
M3 Stakeholder engagement
Stakeholders are those who have interest in the organisation. It involves consumers,
shareholders, employees, suppliers, government etc. They are related to a company directly
or indirectly and engaged with the operational activities of corporation. If Siemens protects
their interest than strong relationship can be established which can help them to maximize the
efficiency and productivity in the organisation. As a result it can achieve its objectives and
goals and it can take benefit from globalization (Botha and Snyman, 2014). The main
stackholders are family membes of Siemens which have 6.9 & shares and other stakeholders
who have shares they belongs to various nations across different countries.

D2 Strategies
Their are various types of strategies that can be made by an organisation so that it can
perform its duties effectively and smoothly. Strategies can be of various types such as:
marketing, selling, promotional etc. To perform in global business environment is it needed
so that it can grab share in the market. It should related to the organisational objectives and it
can help the company to take effective decisions. According to the structure of corporation i
can be frame so that targets can be achieved. The strategies which are adopted by Siemens
are: to provide quality products at minimun price so that it can expand its busienss in Europe,
China. To capture more market share it make joint venture with different companies so that it
can generate high profits.
TASK 4
P5 Different ways of decision making
Decisions are very important for an organisation and it can be effective so that task
can be accomplish according to it. It guide the management so that work can be done in
effective manner. There are various decisions which can help Siemens to expand its business
and generates more profits. Different ways of decisions making which can help organisation
in global level. These ways are:
Identify the decision: It is necessary for Siemens to identify the decisions so that it
can know it is feasible or not. In what context it is required to take.
Gather relevant information: It is essential for an organisation to collect relevant
information so that effective decision can be take. For example, If Siemens takes decision
that sales can be maximize in this year. So it can gather information about the demand of its
products and how much they are now producing. On the basis of it they can increase sales by
maximise the production so that company can meet the demands of consumers. As a result it
its profits can be maximized.
Identify alternatives: It Siemens has facing any problem in its organisation which
affects the profits of it. For example, if organisation want to expand its business in a country
but due to economic crises the condition of country goes down. In that case Siemens should
have alternative option so that it can choose another nation whose economy is stable and

good. So that it can establish its business and earn more revenue (Bharadwaj and et. al.,
2013).
Review the decision: Before taking any decision it is important for the organisation
to review its decision. So that it can know it is fruitful or not and how much is beneficial for
the company. As a result Siemens can take better and effective decisions in its company.
P6 Routes to internationalisation
There are various routes through which an organisation can go internationalisation.
These are as follows:
Merger: It is a way of internationalisation through which an organisation can merge with
other company. The business of both corporations should be same so that efficiency and
productivity can be maximized. Siemens can use this method and can merge with other
organisation who is already engaged in same business as this company.
Joint venture: It is also a way of internationalisation through which an organisation can join
the business of other company. For example, if Siemens has good reach in Germany and it
want to start its business in Asian countries. In that case it can do joint venture with Asian
companies so that it can establish its business in that nation.To beat the competition it makes
joint venture with Zhushou which belongs to China so that it can produce AC drive electric
locomotivtives.
Foreign direct investment: FDI can help Siemens to investment its money in other nations
so that it can return from it. As a result its profit can enhance and it can grab more market
share.
Barriers to internationalisation
Legal obstacles: It is difficult for an organisation to know all laws of different- different
countries. So it is not possible for Siemens to understand the legal compliances properly of
the nation where it want to start its business. All countries have its rules and regulations and
all persons and companies have to follow it.
Culture: All countries have different culture and different environment so it is a barrier for
the organisation to properly analyse it. For example, If Siemens wants to start its business in
India than it should have proper knowledge about the taste, habit and preference of people.
Otherwise it cannot achieve success and bears losses.

Competition: It restrict the companies to perform at global level because if high competition.
For example, If Siemens want to enter in a country but it finds that there is tough competition
in that nation so it cannot survive in the market for a long time. So it can be barriers to of
internationalisation (Belás and Novák, 2014).
M4 Key barriers
Barriers refers to a thing which can restrict a company to go internationalisation.
There are various barriers which can limit an organisation to perform at global level. There
are as follows: culture, legal, competitors etc. Recommendations are as follows: Properly
analyse the market condition. Effective research should be done before enter into a country
about its culture, environment, laws, taste, preference, resources etc. So that it company can
over come from these barriers and take advantage of globalisation. The main key barriers are
to survive in competitive market due to high copmetition and there are various companies in
China who provide quality electronic products at reasonable price.
CONCLUSION
As from the above report, it has been concluded that it is essential to understand the
business environment if company want to perform at global level. By analysing key factors
organisation can lead in the market. Siemens can minimize the issues which are faced in
globalisation so that it can expand its market share. It can effectively evaluates the
organisational culture, structure and functions so that it can manage them and increase
efficiency and productivity. Routes of internalisation can help the company to grab more
share and earn more revenue.