The question is :
What is Siemens' approach to being a global business?
SIEMENS Siemens: "Think More Like Visionaries" Siemens, the German integrated technology company founded in 1847, has a turnover in 2013 of 75.9 billion and is a truly global business being active in 190 countries. It employs 362,000 people, with 220,000 in Europe, Africa, and the Middle East, 78,000 in the Americas, and 64,000 in Asia. It is a multisector business involved in energy, healthcare, infrastructure, and sustainable technologies. You can make toast in an appliance made by Siemens using electricity generated by Siemens manufactured equipment, travel in a train built by the company, or pass through a Siemens supplied traffic control system on your way to hospital to have an MRI in a Siemens-made scanner. Executives at the headquarters in Munich and elsewhere across the world have to make decisions in the best interests of Siemens' shareholders. They must decide where Siemens should locate and build facilities to service its global marketplace. Given the nature of its products, it does not make sense to design and manufacture all products in all countries. It is better to concentrate manufacturing in a small number of locations to benefit from economies of scale and specialization. To cater to its markets, it can ship products anywhere within the group A problem from operating in so many countries with different currencies is the threat caused by exchange rate fluctuations. This means the price of products supplied from one place to another can vary simply because of currency changes: the euro can rise against the U.S. dollar or the Japanese yen, the currencies of some of its major competitors. As a result, Siemens then becomes less competitive. To address this, the company has an integrated internal risk management function. Siemens stated in their 2013 Annual Report: "We have implemented and coordinated a set of risk management and control systems which support us in the early recognition of developments jeopardizing the continuity of our business. The most important of these systems include our enterprise-wide processes for strategic planning and management reporting. Strategic planning is intended to support us in considering potential risks well in advance of major business decisions, while management reporting is intended to enable us to monitor such risks more closely as our business progresses." (Siemens Annual Report 2013; p. 232) A customer can buy from any supplier. But for the kinds of products that Siemens specializes in, price is not the only consideration. Siemens sells highly technical products and servicing these is a major consideration for customers. Being able to provide this globally provides a competitive advantage over other suppliers. This is a core part of Siemens' strategy. By making use of its worldwide presence, Siemens aims to meet the needs of a global marketplace. While all business units report to the German headquarters, each separate business must meet the needs of its local market and customers, wherever they are. To do this best requires an understanding of local needs and culture. This is how the company puts it in their 2013 Annual Report: "Many of our successful products and solutions are developed in close cooperation with our customers. Proceeding from an in-depth understanding of their unique requirements, our employees all around the world create tailored solutions for our customers. That's why we invest in the ongoing training of our consultants and engineers. It's also why we've set up consulting for large customers in a way that enables them to obtain everything they need from a single source - the whole range of products, solutions and services offered by our technology Company. In a nutshell: we're enhancing our reputation as a strong local partner by providing consulting with added value and by reacting quickly and flexibly to local market requirements." (2013 Siemens Annual Report, p. 83) In order to ensure world class products and services, Siemens has established global centers of excellence that serve the entire group, wherever located in 2013, it had about 29,800 of its staff engaged in R&D and software development, in 30 countries across the globe. However, only 23% of these facilities are in Germany, while the Americas had 70 facilities (37%) and Asia 28 (15%) thus making up just over half of Siemens' research activity and reflecting the global nature of its customer base. This is how Siemens sums up its "globalocal" approach to its business: "Siemens is close to its customers throughout the world. While maintaining our strong position in our established markets, we want to expand our position in the world's rapidly growing emerging countries. To build strong partnerships in these new markets, it's necessary to expand local development and production capacities and create solutions tailored to regional requirements. In the emerging as in the industrialized countries, the important factors for success are outstanding innovative services and rigorous customer orientation." (2013 Annual Report, p. 83)
