Strategic Analysis of Siemens' external Environment

Solution Preview

Let us take analysis of each of these environment for Siemens one by one as well as look at the major changes that will impact each of these environment in the next 10 years:

1) Remote environment:

As we know, the remote environment of any company consists of the political, economic, technological and social factors as well as other econological factors that affect the business. Now, let us see how the factors in the remote environment affect the business of Siemens which operate in a wide range of industries and in multiple countries around the world.

Some of the general trends and changes in the remote environment which is applicable to most of the global corporations including Siemens are the increasing global trade or globalization around the world, which is forcing companies to expand and set up operations in new and emerging markets around the world, such as fast growing economies of China and India. Further, increasing globalization is enhancing the competition and is putting increased pressure on the companies like Siemens in terms of innovation, cost and quality related issues.

Further, several trends in the political environment such as increasing instability and uncertainty in the political environment of certain nations and regions around the world, increasing terrorism,etc. are also affecting the operations of global corporations like Siemens in the sense that organizations have to be prepared in advance to encounter the negative impact of such sudden political changes and disruptions.

Further, changing social perceptions of customers and people around the world, changing habits, preferences tastes, increased consumer awareness,etc. are also affecting global businesses worldwide and Siemens is no exception in this regard as well.

Now, let us take a look at some peculiar socio, economic and other macro trends affecting Siemens businesses worldwide.

Two important trends which has been recognized by Siemens as the major factors affecting its business strategy in the future:

Demographic change and increasing urbanization. These megatrends are exerting an ever-greater impact on the world we live in. According to UN projections, the world's population will have increased by about one-third and the average age will have jumped from 26 to 36 by 2050. More and more people are moving to urban areas in search of better jobs, better education and a better life. The UN predicts that next year more people will be living in cities than rural areas for the first time in human history. In light of these developments, companies like Siemens will facr the challenge to meet the growing energy demands of the increasing population, without degrading the environment. Innovation will be the key to success in such scenario as it will allow the company to find challenging, cost effective solutions to meet the increasing demands of growing population in the most effective and efficient manner.

source: ...