structure follows strategy effective implementation of the ... · 11/15/2013 · siemens ag –...
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siemens.ch/answers Restricted © Siemens Switzerland Ltd. 2013
Structure follows Strategy
Effective implementation of the new Siemens strategy
ZFU, November 15, 2013
Siegfried Gerlach, CEO Siemens Switzerland Ltd.
November 15, 2013 Page 2 Siegfried Gerlach / CEO
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Telecommunication and high voltage engineering:
the historical roots of Siemens
Invention of the pointer telegraph
Founding of Siemens & Halske
Construction of Europe's first long-
distance telegraph: Berlin-Frankfurt
Discovery of the dynamo-electric
principle
Cable steamship "Faraday" lays
transatlantic telegraph cable
First electric train shown
at the Berlin trade fair
First electronic elevator
in Mannheim
First subway in Budapest
First automatic telephone exchange
for large city opened in Munich
1847
1848
1866
1874
1879
1881
1896
1909
November 15, 2013 Page 3 Siegfried Gerlach / CEO
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Siemens Ltd.
was active in six sectors up to 2005
November 15, 2013 Page 4 Siegfried Gerlach / CEO
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After our successful transformation, One Siemens is
our framework for sustainable value creation
November 15, 2013 Page 5 Siegfried Gerlach / CEO
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Strategic visioning process –
Pictures of the Future
Extra-
polation
(Road-
maps)
Today‘s business
Retro-
polation
(Szenarios)
Long-term
Today
Medium-term
Society
Politics
Economy
Environment
Customers
Technology
Competitors
Influence factors and
trends
Short-term Today
'Picture of the Future’
Suppliers
November 15, 2013 Page 6 Siegfried Gerlach / CEO
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Climate change
2012: highest CO2
concentration in the
atmosphere in 350,000
years
2001 to 2010: warmest
decade on record
Max Planck Institute
for Meteorology: Only
immediate, drastic
reduction of CO2
emissions will keep
global warming below
2° C until 2100.
November 15, 2013 Page 7 Siegfried Gerlach / CEO
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Urbanization
Growth of cities
2009: For the first time
in history, more than
50% of mankind lives in
cities
2050: 70% of mankind
will live in cities
Megacities worldwide
1975: 3 megacities with
more than 10 million
inhabitants
2025: 27 megacities
with more than 10
million inhabitants;
about one person out of
ten lives in a megacity.
November 15, 2013 Page 8 Siegfried Gerlach / CEO
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Demographic change
World population
2011: 7 billion people
2050: 9.3 billion people
Worldwide life
expectancy
2011: 69 years
2050: 76 years; share
of people over age 65
more than twice what it
is today
November 15, 2013 Page 9 Siegfried Gerlach / CEO
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Our strategy is the base for our success
Markets & customers
Demographic Change
Urbanization
Climate Change
Globalization
Global Megatrends
Economic environment
+
Focus on innovation-
driven growth markets 1
Get closer to our
customers 2
Use the power
of Siemens 3
Strategic Directions
One Siemens
Continuous improvement
Siemens
Sectors
Capital
Efficiency
Capital
Structure
Revenue
Growth
EBITDA
Financial target system
Framework for
sustainable value creation
Vision
Siemens –
the pioneer
Values
responsible
excellent
innovative
Siemens strategy at a glance Competition from the West
Competition from the East
Competitors from
emerging countries
IT players Capital goods
November 15, 2013 Page 10 Siegfried Gerlach / CEO
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We provide answers to the most urgent questions
of our time
Vision
Intelligent
infrastructure
solutions
Industrial
productivity
Energy efficiency
Affordable and
personalized
healthcare
Industry Sector
Energy Sector
Healthcare Sector
Organization
Infrastructure & Cities Sector
The Pioneer in
Infrastructure &
Cities
Rail Systems
Mobility and Logistics
Smart Grid
Low and Medium
Voltage
Building Technologies
Industry
Industry Automation
Drive Technology
Customer Services
Energy
Fossil Power
Generation
Oil & Gas
Renewable Energy
Energy Service
Power Transmission
Healthcare
Imaging & Therapy
Systems
Clinical Products
Diagnostics
Customer Solutions
November 15, 2013 Page 11 Siegfried Gerlach / CEO
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Portfolio adjustment - Divestments
Divestments in Com area
(new orders 2006: 13 billion euro)
Joint-venture Nokia Siemens Networks
Sale of majority share in Siemens
Enterprise Communications
Sale of Siemens Home and
Office Communication Devices
Sale of share in Fujitsu Siemens Computers
Sale of Siemens VDO to
Continental (new orders 2006: 10 billion euro)
Sale of SIS to Atos Origin
(3.7 billion euros / 28,500 employees)
Spin-off of Osram (4.7 billion euros / 39,000
employees)
Planned divestments:
Solar energy business (700 employees)
Water Technologies (4,500 employees)
Logistics and Airport Solutions (3,600
employees)
November 15, 2013 Page 12 Siegfried Gerlach / CEO
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Portfolio adjustment - Acquisitions
Purchase of VA Tech
(3 billion euros, 13,000 employees)
Purchase of diagnostics sector
from Bayer (1.4 billion euros, 5000
employees)
Purchase of Diagnostic Products
Corporation California
(481 million dollars, 2,500 employees)
Purchase of Dade Behring
(1.7 billion dollars, 6,400 employees)
Purchase of UGS
(1.22 billion dollars, 7,300 employees)
Purchase of Invensys Rail (3,200
employees)
Purchase of LMS International (1,200
employees)
November 15, 2013 Page 13 Siegfried Gerlach / CEO
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Environmental Portfolio revenue
(in billions of €) 1)
28 30 33
2012 2011 2010
213 257
332
2010 2011 2012
…roughly equal to
1% of global CO2-
emissions in 2011
Customers’ CO2 abatement
(in millions of metric tons) 1)
Renewable energies 2
Energy efficiency Energy efficiency 1
Environmental technologies 3
1) Continuing operations only (without OSRAM and Solar business)
The Siemens Environmental Portfolio –
our contribution to sustainability
November 15, 2013 Page 14 Siegfried Gerlach / CEO
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Siemens AG – Facts and Figures
Sales of more than 78 billion
euros and profit of 4.6 billion euros
(after taxes)
R&D expenditure of 4.2 billion
euros in FY 2011/12
Siemens achieves 75% of its
business with products and
solutions that have been
developed within the last five
years.
370,000 employees in 190
countries across the globe
November 15, 2013 Page 15 Siegfried Gerlach / CEO
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Comparison of new orders for
Siemens Switzerland Ltd.
Values in millions of
CHF Fiscal year 2000
Total:
1973.8
95.8 80.2
232.1
172.1
897.2
401.8
94.6
Energy
Medicine
Industry
Industry (Transportation)
Information & Communication
Components
Household Appliances
Fiscal year 2012
50.8
113.3
396.8
267.9
75.5
169.7
37.8
Energy
Healthcare
Infrastructure & Cities
Infrastructure & Cities
Infrastructure & Cities (Smart Grid/Low and Medium Voltage)
Industry
Other
(Mobility and Logistics/Rail Systems)
(Building Technologies)
November 15, 2013 Page 16 Siegfried Gerlach / CEO
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CD ST defines the corporate strategy
Scope Typical activities
To be successful each strategy level needs to be properly aligned
and closely linked to each other
Broad environment
Long term / indefinite
scope
Top level
management
Specific
market/business
Medium-to-long term
Business leader
Specific function
Short-to medium
term
Functional leader
Identifies and defines the businesses the company
is in and sets priorities for capital allocation
Sets targets & measures/controls performance
Defines horizontal strategies and the level of
interaction/corporate involvement
Identifies risk and opportunities in the market
Defines sales and customer strategies
Examines the behavior of competitors
Defines its competitive advantages regarding
strengths and competences
Translates business strategy into functional
strategy
Defines the core competences within functions
Implements and executes the strategy
Corporate
Strategy
Business
Strategy
Functional Strategies
R&D Marketing HR
Sourcing Production …
Type of Strategy Level in
Siemens
Siemens
Sectors
Divisions
Business
Units
Functions
How to
compete
Where to
compete
November 15, 2013 Page 17 Siegfried Gerlach / CEO
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Siemens Switzerland
Regional Strategy Implementation Process
November 15, 2013 Page 18 Siegfried Gerlach / CEO
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Siemens Switzerland
Implementation Process (SIP) Overview of Phases
Define
Action Fields
Analyze
External
Environment
Analyze Internal
Strengths and
Weaknesses
Develop
Strategy
Implement
Strategy
Control
Strategy
Functional
Strategies
(SCM, HR, IT, AC,..)
1. Corporate & Business strategy (Global)
Nov Dec
Global Siemens
Strategy Review
(SSP)
Jan Feb Mar Apr-Oct
BRM
Strategy
Review
Meetings
3. Regional Functional Strategies (e.g. IT, HR, SCM)
2. Regional (Market) Strategy (Countries)
ST
Department
Targets/
Budgets
November 15, 2013 Page 19 Siegfried Gerlach / CEO
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Siemens Switzerland
Strategy Implementation Process (SIP)
Siemens Toolbox
Business Field
Definition
Trends Competitor
Benchmarking
SWOT Stakeholder
Mapping
Discount / Business
Value
Strategic USP Market
Attractiveness
Core Competences Competitive
Strategy
Alignment Targets / Budgets
Portfolio Market Analysis Innovation Market Strategy Roadmap
(Moves, Initiatives)
Scorecard
Performance
(Baseline, BSC)
Key Success
Factors
Synergies Resource Strategy Sales / Profit
Calculation
Risk Management
Define
Action Fields
Analyze
External
Environment
Analyze Internal
Strengths and
Weaknesses
Develop
Strategy
Implement
Strategy
Control
Strategy
KSF
O T
S
W t E E
P
S
L
T
November 15, 2013 Page 20 Siegfried Gerlach / CEO
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Nine focus areas operationalize
our strategic directions
Be a pioneer in
technology-driven
markets
Strengthen our
portfolio
Provide a leading
environmental
portfolio
Focus on
innovation-driven
growth markets
Grow in
emerging markets
Expand our
service business
Intensify our
customer focus
Get closer to our
customers
Encourage lifelong
learning and
development
Empower our diverse and
engaged people worldwide
Stand for integrity Use the power
of Siemens
1
2
3
Strategic directions Focus areas
Excellent Responsible Innovative Our values
November 15, 2013 Page 21 Siegfried Gerlach / CEO
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University
We want to encourage and
reward outstanding scientific
achievements.
This is why we give away
free experiment kits to Swiss
nursery schools.
Pre-school
We want to stir interest in
science and technology at
an early age.
School / Vocational
Training We want to prepare young
talent to meet the challenges of
the future.
This is why we are training
more than 300 apprentices.
This is why we cooperate
closely with Swiss universities
and have established a
professorship for «Sustainable
Building Technologies» at the
ETHZ.
Siemens Generation 21
November 15, 2013 Page 22 Siegfried Gerlach / CEO
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Impact and experiences
- Structure follows Strategy
- Operative successes confirm the correctness
of the strategy
- Carve-out of IT and telecommunications
resulted in drop in business volume
- Earlier acquisitions (Industrieteil Elektrowatt,
Integra Signum) now form the backbone of
Swiss business
- Restructuring requires the highest level of
management attention
- Constant changes lead to insecurity among
employees
- Change processes are ongoing
- Communication is a central factor: employees
need to know and support the strategy
- It’s all about people