Strategic Case Analysis
This case study is about Siemens Energy and how they should engineer a green future. Siemens is trying to innovate in existing technologies and new advance approaches to energy generation and distribution that are necessary in the United States, China, Russia and European Union in order to meet their respective energy targets over the next few years. Siemens wants to be in a leadership position in the new energy economy. There is opportunities and challenges to accomplishing this.
Siemens is a leading global supplier of environmental technologies and the second largest employer in Germany. Many of their products help customers lower their energy costs and protect the environment while helping to fight climate change. This benefits the environment and customers but is also very successful business for Siemens. Siemens Energy is a integrated technology company that continually utilities their global existence, financial influence, brand power, diversity, innovation and expertise to sustain their position.
The external organizational environment affecting Siemens performance in the energy enterprises is best captured through the use of the PESTEL Analysis model as illustrated below: I. Political
The political issues impinging on the performance of Siemens, specifically in Germany involve the hostility of the German government to nuclear generated energy. This is characterized by the government failure to license or initiate new nuclear power plants in Germany for a considerable period of time. The current case on the government stance against nuclear power is forecasted as temporary and uncertain due to the volatility of political elections. Siemens Energy Company is reluctant to commit its corporate capital towards development and enhancement of nuclear technology due to the uncertainty surrounding nuclear power policies in Germany (Griffin, 2011). International investment in nuclear power plant construction is seemingly hindered by political concerns such as home security concerns, which give monopolistic competitive advantage to domestic energy multinationals in the award of nuclear power plant contracts. This home security political concern gives General Electric Company as the main competitor with Siemens in the United States nuclear energy market a monopolistic competitive advantage. II. Economic
Various carbon based and renewable source of energy have differential economic efficiencies in terms of the cost of installation of energy power plant and the benefits received in terms of the amount of electric power generated by the specific power generation technology. The cost of a specific power generation technology also goes beyond the cost of power generation, storage and distribution infrastructure to the environmental and social impact of designated power generation technology. Siemens company investment in the energy sector spans from carbon based energy sources to renewable energy sources such as wind energy, solar energy, hydro energy and nuclear energy. The company has specifically pioneered in the wind energy investment and is the first to introduce the offshore wind power generation turbine technology. Siemens heavy investment in the wind energy sector is also reflected by its ranking as the fifth largest installer of wind power generation turbine (Rothaermel F. H., 2012). The company also at the forefront of the Desertec environmental initiative, which aims at substituting carbon fossils energy backlog in Europe with green solar energy trapped from the African Sahara desert. All these investments expedite a great deal of Siemens revenues capital in regard to the poor energy conversion efficiency of wind and solar energy. Wind energy conversion ratio is estimated at only 45%, whereas solar energy conversion ratio is even lower with a power conversion ratio of only 20%. The economic efficiency of wind and solar power generation...
References: Griffin, R. (2011). Management. Mason: OH: South-Western Cegange Learning.
Rothaermel, F. H. (2012). Siemens Energy: How to Engineer a Greener Future? Mason, Ohio, United States: Cegange-Western Learning.
Rothaermel, F. T. (2012). Strategic Management: Concepts & Cases. McGraw-Hill Companies.
Siemens. (2011). Retrieved from https://docs.google.com/viewer?a=v&q=cache:IN00dCC_630J:www.usa.siemens.com/pool/about_us/ec/siemens_ebrochure09.pdf+external+environment+analysis+of+siemens+energy+on+how+to+engineer+a+green+future&hl=en&gl=us&pid=bl&srcid=ADGEESjh5wG6WokOQK4ldAE5aL835DE
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