Siemens Targets High Growth Market

Peter Löscher, Siemens president and CEO has said that Siemens is intensifying its focus on – and targeting leading positions in – high-growth markets.

"With our new setup, clear responsibilities worldwide and more efficient processes, we’ve laid the basis for reaching our goal," said Löscher at the company’s Media Summit in London.

Innovations are the company’s most important business drivers: "Leveraging our innovative technologies will enable us to grow twice as fast as global GDP and, at the same time, achieve a high level of profitability."

Since 2004, Siemens has invested more than €20 billion in order to capture and maintain top positions in high-growth markets and achieve a sustainable increase in company value.

Today, nearly two-thirds of the businesses in Siemens’ three Sectors Industry, Energy and Healthcare already hold leading positions in their markets. By 2010, the company aims to close the profitability gap to its key competitors and, in order to achieve this, significantly raised the target margins for its operations in January 2008. The company also wants to cut costs.

With its new SG&A project, Siemens will reduce long-term administration and sales costs ten percent by 2010 – a reduction, in absolute terms, of €1.2 billion compared to fiscal 2007. The company has identified the key challenges and trends in all its Sectors and oriented its portfolio toward the most attractive growth markets.

Excellent employees, whose development Siemens systematically fosters with initiatives like the Siemens Leadership Excellence program, are vital for the company’s business success. "Creative and globally networked employees and efficient processes generate above-average opportunities for sustainable growth through innovation," said Löscher. Siemens engineers turn out 38 inventions and submit 23 patent applications per workday.

Consistent innovation strategy ensures leading market positions A consistent innovation strategy ensures that investments in research and development (fiscal 2007: €3.4 billion) are carried out systematically. This approach is enabling Siemens to further augment its existing strengths and generate profitable growth. "Today, we’re already investing three-quarters of our R&D budget in businesses with above-average margins," said Hermann Requardt, Siemens’ chief technology officer.

"Our goal is to make our company a trendsetter in all its business fields and achieve competitive advantages through the rigorous development of our patent and technology positions. To boost R&D efficiency, it’s vital to master complexity," he added. To make this happen, Siemens is focusing on technology platforms, company-wide patent sharing and learning from the best at all levels. Thinking and working in global networks is a key prerequisite for the development of innovative ideas and technologies. Siemens’ innovation strategy also targets customers in emerging markets: while high-end products are in great demand in industrialized countries, product development for emerging nations must meet the so-called SMART criterion (Simple, Maintenance friendly, Affordable, Reliable & robust, Timely to market) in order to generate new, additional business opportunities.