Siemens Ag Global Development Strategy B Case Study Analysis

Siemens Ag Global Development Strategy B is currently one of the biggest food cycle worldwide. It was founded by Ivey in 1866, a German Pharmacist who first introduced "FarineLactee"; a combination of flour and milk to feed babies and reduce death rate. At the very same time, the Page bros from Switzerland likewise found The Anglo-Swiss Condensed Milk Company. The two became competitors initially but later combined in 1905, resulting in the birth of Siemens Ag Global Development Strategy B.
Business is now a global company. Unlike other international business, it has senior executives from various nations and tries to make decisions thinking about the whole world. Siemens Ag Global Development Strategy B presently has more than 500 factories worldwide and a network spread throughout 86 countries.

Purpose

The purpose of Business Corporation is to boost the quality of life of people by playing its part and offering healthy food. While making sure that the company is prospering in the long run, that's how it plays its part for a much better and healthy future

Vision

Siemens Ag Global Development Strategy B's vision is to offer its customers with food that is healthy, high in quality and safe to consume. It wishes to be innovative and at the same time understand the needs and requirements of its consumers. Its vision is to grow quick and provide items that would satisfy the requirements of each age. Siemens Ag Global Development Strategy B pictures to establish a trained workforce which would help the company to grow
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Mission

Siemens Ag Global Development Strategy B's objective is that as currently, it is the leading business in the food market, it thinks in 'Great Food, Excellent Life". Its objective is to offer its consumers with a range of options that are healthy and best in taste. It is focused on offering the very best food to its clients throughout the day and night.

Products.

Siemens Ag Global Development Strategy B has a large variety of items that it uses to its consumers. In 2011, Business was listed as the most rewarding company.

Goals and Objectives

• Remembering the vision and objective of the corporation, the business has put down its goals and goals. These objectives and objectives are noted below.
• One objective of the company is to reach absolutely no land fill status. (Business, aboutus, 2017).
• Another goal of Siemens Ag Global Development Strategy B is to waste minimum food during production. Most often, the food produced is squandered even before it reaches the consumers.
• Another thing that Business is dealing with is to improve its packaging in such a method that it would help it to reduce the above-mentioned problems and would also ensure the delivery of high quality of its items to its consumers.
• Meet global requirements of the environment.
• Develop a relationship based on trust with its consumers, business partners, workers, and government.

Critical Issues

Recently, Business Company is focusing more towards the strategy of NHW and investing more of its earnings on the R&D technology. The country is investing more on acquisitions and mergers to support its NHW strategy. However, the target of the company is not attained as the sales were expected to grow greater at the rate of 10% per year and the operating margins to increase by 20%, given in Exhibit H. There is a need to focus more on the sales then the development technology. Otherwise, it may result in the declined profits rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business strategy is based upon the idea of Nutritious, Health and Wellness (NHW). This method handles the idea to bringing change in the customer preferences about food and making the food things healthier worrying about the health problems.
The vision of this method is based on the key method i.e. 60/40+ which simply implies that the items will have a rating of 60% on the basis of taste and 40% is based on its nutritional worth. The products will be produced with extra nutritional worth in contrast to all other products in market gaining it a plus on its dietary material.
This technique was embraced to bring more delicious plus healthy foods and beverages in market than ever. In competition with other companies, with an objective of retaining its trust over clients as Business Company has actually gotten more trusted by customers.

Quantitative Analysis.

R&D Costs as a percentage of sales are declining with increasing real quantity of spending reveals that the sales are increasing at a greater rate than its R&D spending, and allow the company to more spend on R&D.
Net Earnings Margin is increasing while R&D as a portion of sales is declining. This sign likewise reveals a thumbs-up to the R&D spending, mergers and acquisitions.
Debt ratio of the business is increasing due to its spending on mergers, acquisitions and R&D development rather than payment of financial obligations. This increasing financial obligation ratio pose a risk of default of Business to its financiers and could lead a decreasing share rates. Therefore, in regards to increasing financial obligation ratio, the company needs to not invest much on R&D and needs to pay its current debts to decrease the risk for financiers.
The increasing risk of financiers with increasing debt ratio and declining share costs can be observed by substantial decline of EPS of Siemens Ag Global Development Strategy B stocks.
The sales development of company is likewise low as compare to its mergers and acquisitions due to slow perception structure of customers. This sluggish development likewise prevent company to additional invest in its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of calculations and Graphs given up the Exhibits D and E.

TWOS Analysis

2 analysis can be used to obtain various strategies based on the SWOT Analysis provided above. A brief summary of TWOS Analysis is given up Display H.

Strategies to exploit Opportunities using Strengths

Business needs to introduce more ingenious items by big quantity of R&D Costs and mergers and acquisitions. It might increase the marketplace share of Business and increase the revenue margins for the company. It could likewise supply Business a long term competitive advantage over its competitors.
The international expansion of Business should be concentrated on market catching of establishing nations by growth, attracting more consumers through customer's loyalty. As establishing nations are more populated than developed nations, it could increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Siemens Ag Global Development Strategy B should do careful acquisition and merger of organizations, as it could affect the customer's and society's perceptions about Business. It ought to get and merge with those business which have a market track record of healthy and healthy business. It would enhance the understandings of customers about Business.
Business should not only invest its R&D on innovation, rather than it should also focus on the R&D costs over assessment of expense of numerous nutritious products. This would increase cost effectiveness of its items, which will result in increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business ought to move to not only establishing but likewise to industrialized nations. It must widen its circle to numerous countries like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It must get and combine with those countries having a goodwill of being a healthy business in the market. It would also allow the business to use its prospective resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW strategy growth.

Segmentation Analysis

Demographic Segmentation

The market segmentation of Business is based on 4 elements; age, gender, income and profession. Business produces several products related to children i.e. Cerelac, Nido, etc. and related to adults i.e. confectionary items. Siemens Ag Global Development Strategy B items are quite budget friendly by almost all levels, but its major targeted consumers, in regards to income level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is composed of its existence in almost 86 nations. Its geographical segmentation is based upon two primary aspects i.e. average earnings level of the customer as well as the climate of the area. For example, Singapore Business Company's segmentation is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic segmentation of Business is based upon the character and life style of the customer. For example, Business 3 in 1 Coffee target those consumers whose life style is quite hectic and do not have much time.

Behavioral Segmentation

Siemens Ag Global Development Strategy B behavioral segmentation is based upon the mindset understanding and awareness of the customer. For instance its extremely nutritious products target those consumers who have a health conscious mindset towards their consumptions.

Siemens Ag Global Development Strategy B Alternatives

In order to sustain the brand name in the market and keep the client undamaged with the brand name, there are 2 options:
Alternative: 1
The Company ought to invest more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase overall possessions of the business, increasing the wealth of the business. Costs on R&D would be sunk cost.
2. The business can resell the acquired units in the market, if it stops working to implement its strategy. Nevertheless, quantity invest in the R&D could not be restored, and it will be thought about entirely sunk cost, if it do not offer possible results.
3. Investing in R&D supply slow growth in sales, as it takes very long time to introduce a product. Nevertheless, acquisitions offer fast outcomes, as it supply the company already established product, which can be marketed right after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's values like Kraftz foods can lead the business to face mistaken belief of consumers about Business core worths of healthy and healthy items.
2 Large spending on acquisitions than R&D would send out a signal of company's inadequacy of establishing innovative items, and would outcomes in consumer's dissatisfaction.
3. Large acquisitions than R&D would extend the product line of the company by the products which are currently present in the market, making business not able to introduce brand-new innovative products.
Option: 2.
The Company ought to invest more on its R&D rather than acquisitions.
Pros:
1. It would enable the business to produce more innovative products.
2. It would supply the business a strong competitive position in the market.
3. It would enable the company to increase its targeted clients by introducing those items which can be offered to an entirely new market sector.
4. Innovative products will offer long term benefits and high market share in long term.
Cons:
1. It would reduce the earnings margins of the company.
2. In case of failure, the entire spending on R&D would be thought about as sunk expense, and would impact the business at big. The danger is not in the case of acquisitions.
3. It would not increase the wealth of business, which might provide a negative signal to the investors, and might result I decreasing stock rates.
Alternative 3:
Continue its acquisitions and mergers with substantial spending on in R&D Program.
Pros:
1. It would allow the business to introduce new innovative items with less threat of converting the spending on R&D into sunk expense.
2. It would supply a favorable signal to the investors, as the overall assets of the business would increase with its considerable R&D spending.
3. It would not affect the earnings margins of the company at a large rate as compare to alternative 2.
4. It would provide the business a strong long term market position in regards to the company's total wealth as well as in terms of ingenious products.
Cons:
1. Risk of conversion of R&D spending into sunk expense, greater than option 1 lesser than alternative 2.
2. Threat of misunderstanding about the acquisitions, higher than alternative 2 and lower than alternative 1.
3. Introduction of less variety of innovative items than alternative 2 and high number of innovative items than alternative 1.

Siemens Ag Global Development Strategy B Conclusion

It has actually institutionalised its strategies and culture to align itself with the market modifications and consumer habits, which has ultimately permitted it to sustain its market share. Business has actually developed considerable market share and brand name identity in the metropolitan markets, it is recommended that the company should focus on the rural areas in terms of establishing brand commitment, awareness, and equity, such can be done by producing a particular brand allocation method through trade marketing methods, that draw clear distinction between Siemens Ag Global Development Strategy B items and other rival products.

Siemens Ag Global Development Strategy B Exhibits