Siemens in China - Joint Ventures

Table of Contents

1. Introduction of the foreign corporation
1.1. Products, services
1.2. Branch
1.3. History
1.4. Facts about company
1.5. Company philosophy

2. Business Idea of Chinese Market Entry
2.1. Business Range
2.2. Products & Production
2.3. Services
2.4. Sales
2.5. R & D
2.6. Corporate Citizenship
2.7. Special Products

3. Market entry strategy of SIEMENS
3.1. History background information about Siemens in China
3.2. Regionalization of Siemens in China
3.3. Joint venture of Siemens
3.4. Logistic

4. Development
4.1. Development of the joint venture of Siemens Shanghai Mobile Communications
4.2. Overview about the current progress of Siemens´ joint ventures
4.3. Siemens´ plans for the future in China

1. Introduction of the foreign corporation

Siemens is one of the world’s largest electrical engineering and electronics companies. Founded more than 150 years ago in Germany, Siemens provides innovative technologies and comprehensive know-how to benefit customers in 190 countries. Its international headquarters are in Berlin and Munich.

1.1. Products, services

Siemens is the world's largest supplier of products, systems, solutions and services for industrial automation and building technology. Siemens AG is spited in different divisions, so-called “groups”, every one from them is separated in several Business Units and produces a range of products.

Siemens’ Lighting Group (Osram) is famous over the world. The group provides lamps, electronic control gear, opto-semiconductors which are to find especially on the sports stadiums, airports, factories etc. The other area, Transportation Systems Group is a world-leading systems house in the rail industry, and Siemens VDO Automotive is one of the world's largest suppliers of automotive electronics. The Medical Group offers a broad spectrum of products, solutions and services for integrated health care ranging from innovative technologies for accurate diagnoses and therapies to services that optimize processes and increase efficiency. Siemens’ Power Group covers the entire array of energy solutions. Information and Communication area combines products, services and solutions for the information and communications area. Customers know this area from Mobile and fixed network solutions, i.e. cellular phones. Siemens Financial Services specializes in innovative offerings for corporate financing and risk management. Siemens Real Estate's services comprise real estate development and utilization, portfolio management and services. Finally, the Household appliances and computers are doubtless the core businesses of Siemens’ affiliates.

1.2. Branch

Siemens supply products, systems, solutions and services to the following industries: Healthcare, Process and Basics Industries, Manufacturing Industries, Transportation, Logistics, Infrastructure, Telecommunications and Services. Especially in Healthcare, Telecommunication and Manufacturing Industries Siemens is one of the best and worthwhile suppliers.

1.3. History

Formed in 1847, the company “Telegraphenbauanstalt” von Siemens & Halske grew within the space of a few decades from a small precision-engineering workshop, producing mechanical warning bells for railways and electrical telegraph systems, into one of the world's largest companies in electrical engineering and electronics. When in 1866 Werner Siemens discovered the dynamoelectric principle, the potential applications for electricity were limitless. In 1879, Siemens & Halske presented the first electric railway and installed the first electric streetlights in Berlin; in 1880 came the first electric elevator; and in 1881 the electric streetcar. Following the death of Werner von Siemens in 1892, his successors followed the course he had set. Lighting, medical engineering, wireless communication and household appliances were followed after World War II by dataprocessing systems, automotive systems and semiconductors. Through to 1944, higher state demand and military orders led to substantial increases both in sales and in the size of the workforce. After World War II, Siemens began rebuilding in Germany first, but gradually moved into foreign countries from the 1950s on. Technological advances, expansion into new business segments, and the reestablishment of a presence in traditional export markets laid the foundations for the company's return to its old strength in the world marketplace in the 1960s.

Today, Siemens is a transparent organization comprising fast-acting business unit that are making important and significant contributions to the future of electrical engineering and electronics.

1.4. Facts about company

Siemens is a global powerhouse in electrical engineering and electronics. It operates over the world and offers comprehensive range of systems, solutions and services. Annually the company invests more than $5 billion in global R&D. In the last five years, Siemens derived 75 percent of total sales from developed products. In 2005 company’s orders counted €83.791 million and net income about €2.248 million.

Worldwide, Siemens and its subsidiaries employs over 461,000 people in 190 countries and reported global sales of €75.4 billion in fiscal year 2005.

Siemens AG is listed on the Frankfurt Stock Exchange and also on the New York Stock Exchange since March 12, 2001 and accounts to more than 1 million shareholders worldwide and the shareholders' equity of €27,117 million. Siemens is one of the market leader worldwide and offers jobs for more as 461,000 employees.

1.5. Company philosophy

To be successful in the global market Siemens has developed following corporate principles.

Siemens wants to strength its Customers - to keep them competitive because success depends on the success of the own customers.

Siemens tries to push Innovation - to shape the future.

Siemens empowers its People – because the employees are the key to the success.

Siemens embraces corporate Responsibility - to advance society. Company’s ideas, technologies and activities help to create a better world through committing the universal values, good corporate citizenship and a healthy environment.

Siemens enhances company’s Value - to open up new opportunities and generate profitable growth to ensure sustainable success. Company tries to leverage its balanced business portfolio, business excellence and synergies across all segments and regions.

2. Business Idea of Chinese Market Entry

Siemens is one of the most well-known and respected corporate citizens in China. Siemens has a long history of co-operation. It began in 1872, when the company delivered China's first pointer telegraph. In 1879, Siemens received an order from the Chinese Government for lighting machines, for example to light the port of Shanghai. Then China ordered by Siemens the first electrical tram, running with 20 kilometres per hour. It was the fastest one of its kind in the world. Thanks to the partnership with Siemens China was at the technological cutting edge to the beginning of the new century.

The name of Siemens commanded a great deal of trust and respect because of the advanced technology and high-quality. Nevertheless, in the times of the 2.World War and afterwards it was difficult for foreign companies to resume their business in China but from 1972 Germany and China established diplomatic relations and Siemens renewed its co-operation. This cooperation was followed with great interest by China’s top political leadership.

2.1. Business Range

Now Siemens is an integral part of the Chinese economy. Some of the most advanced technologies in operations in China today are "made by Siemens". Siemens technology helps to provide

1) power supply that is efficient and environmentally compatible
2) public transport that is fast, save and comfortable
3) communication that is reliable, speedy and cost efficient
4) medical facilities that aid in rapid, accurate and effective diagnosis
6) automation solutions for every branch of industry to increase productivity, profitability and competitiveness

2.2. Products & Production

All business segments of Siemens worldwide are active in China including Information and Communications, Automation and Control, Power, Transportation, Medical, Lighting as well as Household Appliances. Core business areas are infrastructure development and Automation and Control.

COM

Siemens Communications Group (Com) provides advanced network infrastructures for enterprises and related services.

Siemens made the GSM-Railway in China and was responsible for the fixed line network portfolio as well as for Internet Protocol (IP) solutions for voice and data, also a range of products and systems for broadband access, and optical transport networks. Furthermore Siemens is a leader in China's enterprise network business, and remain the dominant player in the hotel and airport markets. Furthermore, the Taiwan-based BenQ Group acquired Siemens' entire mobile phone business as of October 1, 2005.

Automation & Control

Siemens Automation and Drives (A&D) Group is a leading provider in industrial automation worldwide and offers systems, solutions and services in manufacturing automation, process automation, electrical installation for buildings and electronics assembly systems. The Group's products and services are applied in the steel, machinery, metals, food, beverage, packing, automotive, power and petrochemical industries.

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