GLOBALIZATION Globalization is seen primarily as an economic phenomenon involving increasing interaction and integration of national economic systems through the growth in international trade, investment, and capital flows. There occurs primarily increase in cross border social, cultural, and technological exchange. Factors of Globalization The existence of a global infrastructure Changes in Transportation and Communication Reduction in Trade Barriers International Division of Labor Internationalization of Finance New Technology Systems Growth of Consumer Markets
Key Players Businesses Transnational Banks and Corporations WTO - World Trade Organization Entrepreneurs
Budding of a Globalized SIEMENS The globalization of Siemens started way back in 1870’s by beginning operation of IndoEuropean telegraph line. In 1879, Siemens & Halske set up a subsidiary in the city of Vienna to develop trade with countries in the southeast of Europe. The first acquisition was done in 1903 when Siemens & Halske acquired the company Elektrizitäts-Aktiengesellschaft vorm. By fiscal 1914, Siemens had a worldwide workforce of 82,000 employees, of which a quarter worked outside Germany, and the company had become one of the world’s foremost players in its industry. The outbreak of World War I had a substantial and lasting impact on its global standing. Siemens’ markets collapsed, and the majority of its foreign subsidiaries were expropriated. Due to the mass destruction of the infrastructure during the war period, Siemens recognized the need for development in the public utilities and services such as the rail network, the postal service, and power generation. By the mid-1960s, Siemens succeeded in regaining its former standing in world markets. One of the main milestones in the company’s development came in October 1966 prompted by the growing convergence of the power engineering and communications engineering sectors, the move helped to build a stronger position for Siemens in the global marketplace. From the 1990s on, Siemens changed from a company dealing mainly with public customers in regulated markets to a global competitor increasingly under pressure from the shareholders. To meet these new challenges effectively and efficiently, the company introduced programs that represented a radical change of approach, based on the strategic pillars of productivity, innovation and growth. By 1997 the company was represented throughout Asia-Pacific with 45,000 employees, around 70 joint ventures and over 60 plants. Siemens was able to further enhance its standing as a leader on the world market for electrical and electronic products through the acquisition of Plessey in Britain in 1991 and Rolm in the United States in 1992. Siemens’ 160-year history reveals how visions can become reality. Since its founder years under Werner von Siemens, a visionary inventor and entrepreneur who made an enormous contribution to technological progress in the 19th century, the company has grown into a GLOBAL NETWORK OF INNOVATION uniting over 450,000 people in more than 190 of the world’s countries.
(Indo-European Telegraph Line- The first step to Globalization) Siemens presence and its contributions in some major countries: U.S. – In fiscal 2008, Siemens in the USA completed four straight years of double-digit growth in new orders, making the United States Siemens’ largest market for the third year in a row, based on sales and orders. Siemens is playing an important role in developing US infrastructure. In energy, their power generation solutions help meet one-third of America’s total energy needs every day. In healthcare, they are the No. 1 application service provider, processing an average of 170 million transactions daily for more than 1,000 customers. In fiscal 2008 (October 1, 2007 – September 30, 2008), sales to customers in the USA amounted to EUR14.8 billion. Brazil – Siemens has been present in Brazil for more than 100 years, where it holds leading positions in its Industry, Energy and Healthcare Sectors. Siemens is taking elegant steps to modernizing the country's infrastructure. Siemens equipment and systems are responsible for 50% of the electrical power generated in Brazil Siemens Brazil is growing 4 times faster than the national GDP; nearly all its businesses are in No. 1 or No. 2 market position. Siemens Industrial Solutions is present in every major industrial facility in Brazil. In fiscal 2008 (October 1, 2007 – September 30, 2008), sales to customers in Brazil amounted to EUR 1.7 billion
Russia – For more than 155 years, Siemens has been active in Russia, where it holds leading positions in its Industry, Energy and Healthcare Sectors, while Siemens IT Solutions and Services functions across all three Sectors. Siemens is modernizing various key sectors. Mosenergo – 420-MW steam/gas units for 4 Moscow heat and power plants. Severstal – equipment for new mini-mill in Balakovo/Saratov region. Volkswagen Kaluga – assembly conveyor and welding shop. St. Petersburg – traffic control system for the ring motorway. In fiscal 2008 (October 1, 2007 – September 30, 2008), sales to customers in Russia amounted to almost EUR 1.187 billion. United Kingdom – Siemens started operating in the UK in 1843. Airport owner BAA has agreed a contract with Siemens to design the entire information and communications system for the planned new Eastern Terminal at Heathrow. Siemens will be responsible for maintenance and operation of the eco-friendly plant, being built in Uskmouth, Wales. Siemens won a major contract to connect the world’s largest offshore wind farm, Greater Gabbard, to the British power grid. Siemens continues to be a leading supplier of hearing instruments to the NHS and retail market within the UK. In fiscal 2008 (October 1, 2007 – September 30, 2008), sales to customers in the UK amounted to more than EUR 4.265 billion. China – The history of Siemens in China dates back to 1872, when the company delivered China’s first pointer telegraph. To date, Siemens has established more than 90 operating companies and 60 regional offices in China. Siemens is having significant contributions to China’s infrastructure. Construction of a 1,400-kilometer HVDC transmission line from southwest China to Shanghai. It has opened the world’s highest-capacity baggage handling system at the Beijing Capital Airport. Two new environmentally compatible Corex steel production lines in Shanghai have been developed. In fiscal 2008 (October 1, 2007 – September 30, 2008), sales to customers in China amounted to almost EUR 4.9 billion. India – The history of Siemens in India dates back to 1867, when Werner von Siemens personally supervised the laying of the first telegraphic line between London and Calcutta. BusinessWeek ranked Siemens India as the No. 1 company in its annual rating of Asia’s top
50 companies (2008). Bangalore International Airport, built and operated by a Siemens-led consortium, commenced operations and is Siemens’ first public private partnership project in India. It was first to introduce several high-end products in Indian healthcare market. SIEMENS set up a Renewable Energy Innovation Center in Bangalore. In 2008, Siemens India was the top ranked company by BusinessWeek in its annual rating of Asia’s 50 companies. In fiscal 2008 (October 1, 2007 – September 30, 2008), sales to customers in India amounted to almost EUR 1.9 billion. New orders totaled nearly EUR 2.3 billion. Siemens currently has over 17,200 employees in India.
(Global presence of SIEMENS)
Global Revenues in different sectors of business: Sr. No. 1 Asia, Middle East 2 3 4 Germany America Europe, C.I.S., Africa 20 24 36 9 25 34 9 44 30 Region Industry (%) Australia, 20 Sector Energy (%) 32 Sector Health (%) 17 Sector
Globalization of R&D: Innovation is the lifeblood for SIEMENS as global organization which has been the basic pillar for the sustainable growth of the company. €3.8 billion in fiscal 2008, or 4.9% of revenue; 32,300 R&D employees worldwide; 17,000 software engineer; 150 R&D locations in over 30 countries around the world; 8,200 inventions in FY2008 and 55,000 active patents are some of the amazing facts which shows the active participation of the company in R&D department around the globe.
Development of SIEMENS R&D activities (Schematic Diagram):
Conclusion: Our learning from the Globalization part of SIEMENSThe company had a clear vision and goal to spread its wings across the globe. In the course of 160+ years of company history, Siemens has developed from its beginnings in the telegraph business into a globally active concern with a range of competencies – from electrical engineering and electronics to medical technology and healthcare. Innovations have given major thrust to the company’s present global standing. SIEMENS has mastered in all the three sectors i.e. Industry, Energy and Healthcare, in whichever country it has entered. Innovations by Siemens' have really changed the world. It has developed a trust of quality management and services in various countries for over a century. It has changed the lifestyle of the world by its products and services across the globe. Its vast presence in 190 countries around the globe shows its commitment not only towards its customers but also towards its employees.the company is a live example of how visions cn become a reality. Since its founder years Werner von Siemens, a visionary inventor and entrepreneur has made an enormous contribution to technological progress in the 19th century, today which stands to be one of the world’s top company in electrical/electronic market.