Issues in Global Business and Strategic Concepts: Siemens Wind Power

This report provides a strategic analysis of Siemens Wind Power Division, examining its international, transnational, localization, and standardization strategies. The report explores Siemens' country-specific implementation models in the U.K. and U.S.A., along with the application of the BCG model and Porter's 5 Forces. It also considers political economy views affecting Siemens, including investment risks and the impact of global economic conditions. The report recommends Siemens prioritize market entry into the U.S. due to its potential for wind turbine construction and the presence of the U.S. DOE’s National Renewable Energy Laboratory. The report also covers the attractiveness of the UK market and Siemens' strategic alliances. The study concludes with recommendations for strategy approval and future development.

Running head: ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
Issues in Global Business and Strategic Concepts
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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

6ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
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).

10ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPTS
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