Siemens: A Case Study Using the Process Model Innovation

Topics: Innovation, Strategic management, Management Pages: 15 (4299 words) Published: April 7, 2014

page of content:

about siemens
analysis of case study using the process model innovation:
1 - search;
2 - selection;
3 - implementation;
4 - capturing.
analysis of the company using the resource-based view
appendix 1 (open innovation)
appendix 2 (siemens resources)
appendix 3 (siemens capabilities)


The main goal of this paper is to analyze the overall performance of Siemens corporation. Firstly, it will provide the overview of Siemens as a company, providing information on its main sectors of business. Then, in order to gain better understanding on innovation management and structure of Siemens the process innovation model, which covers the key aspects of the challenge, will be thoroughly explained and applied to the company. Afterwards, the resource-based view will be introduced to explain and analyze the importance of resources and capabilities Siemens possess and their contribution towards company’s competitive advantage. Then, the report will provide the recommendation on Siemens future strategy and conclusion of the overall findings. 113

About Siemens.

Siemens is a german conglomerate founded in 1847 by Werner von Siemens and Johann Georg Halske as a telegraph company (Siemens A, 2012). By 2012 Siemens employed more than 370,000 people in more than 190 countries around the globe, among which 29,500 people was working in R&D, submitting roughly 40 inventions and 21 patent every workday. The total revenue for the financial year 2012 was €78,3 billion (Siemens B, 2012). The company has decentralized structure and is being involved in four main business sectors, which are: Energy; Healthcare; Industry; and Infrastructure and Cities, further divided into eighteen Divisions, which in their turn are composed of a plurality of Business Units (Siemens A, 2012). Each of these entities is considered as a «global entrepreneur» and has is responsible for its own profits and losses. It helped to inspire entrepreneurial spirit and opportunities among employees, but, due to decentralization, coordination and communication between these units was a challenge Siemens faced (Lakhani, K.R., et al, 2013). 151

Process Model Of Innovation.

Successful innovations are always require a lot of technical resources as well as managerial capabilities, which could be obtained through different ways, such as doing something and making mistakes, working with other firms, asking customers about their needs, etc., but the main challenge for innovation to become successful is company’s maturity to accept it and not be afraid of it, to see opportunity for the long-term improvements (Tidd, J., Bessant, J., 2009). There are number of models created to evaluate the effectiveness of innovation management. Some of them are simple, others are more complicated (Chiesa, V., Coughlan, P. and Voss, C., 1996), but in this paper the process model of innovation will be represented. 110 PICTURE

The process model of innovation consist of four stages, which are search, selection, implementation and capturing. First stage implies a spotting of signals in the internal and external environment which could indicate the potential for change. These signals could be new technological inventions and wherefore greater opportunities, growth of competition, change of customers preferences, or new laws (Tidd, J., Bessant, J., 2009). 60

In Siemens case search stage started then Lackner realized the great potential for innovation the company possess, but could not apply in reality due to decentralized structure of organization. He had an experience in working with external partners that is why he knew the importance of knowledge exchange. Therefore, considering the examples of open innovation (Appendix 1) in Procter&Gamble and Eli Lilly, which transferred idea creating and problem solving to the online...

References: 1) Barney, J., (1991). Firm Resources and Sustained Competitive Advantage, Journal of Management, vol. 17 (1991), no. 1, pp. 99–120.
2) Chesbrough, H., W., (2003). The era of open innovation. MIT Sloan Management Review 44 (3): 35–41.
3) Chiesa, V., Coughlan, P. and Voss, C., (1996). Development of technical innovation audit. Journal of Product Innovation Management, 13 (2), 105-136.
4) Johnson, G., Scholes, K., Whittington, R., (2008). Exploring Corporate Strategy 8th Edition, Prentice Hall: Hemel Hempstead.
5) Lakhani, K.,R., Hutter, K., Pokrywa, S., H., Fuller, J., (2013). Open Innovation At Siemens, Harvard Business School.
6) Peteraf, M.A., (1993)
7) Prahalad, C.K., Hamel, G., (1990). The Core Competence of the Corporation. Harvard Business Review.
8) Rickards, T., (1997). Creativity and Problem Solving At Work, Gower, Aldershot.
9) Siemens A (2012) About us [Online].
Available at: , [Accessed March 15th, 2014].
10) Siemens B (2012) Annual Report 2012 [Online].
Available at: , [Accessed March 15th, 2014].
11) Teece, D. J., Pisano, G., Shuen, A. (1997) Strategic Management Journal, vol. 18, No. 7, pp. 509-533.
12) Tidd, J.,Bessant, J., (2009), Managing Innovation: Integrating Technological, Market and Organizational Change 4th Edition. John Wiley & Sons Ltd, Chichester.
13) Wernerfelt, B., (1984). The Resource-Based View of the Firm. Strategic Management Journal, 5, (2), pp. 171–180.
Appendix 1 - Open Innovation.
The information above obtained from the Siemens Annual Report 2012. (Siemens B, 2012)
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