Siemens CerberusEco in China: Introducing low-frills products in a high-quality company Harvard Case Solution & Analysis

INTRODUCTION

As we all now the Siemens is one of the biggest companies in the world. The company was found in October 1847, by Werner Von Siemens and Johann Georg Halske. They entered in to the Berlin market with founding of the Telegraphen-Bauanstat Von Siemens & Halske. The company started by only 10 men and produced the first product which was the telegraph in 1848. Later on, the company startedin London with supervision of their younger brother Carl Wilhelm Siemens and made the famous Indo-European Telegraph line. St. Petersburg, Russia was also added to the company offices later on.

Company continuously grew in the international market, especially in the telecommunication, medical equipment technology, electrical equipment, data processing systems in term of the quality and stability.

Siemens has faced the first fiscal surplus in 2007 with annual revenue around $77billion. 425,000 employees work in the Siemens across the 190 countries in the world. Healthcare, Energy and Industry are the three main sectors which are divided into Siemens. They also took part on the IT business and financial services.

Now we move on the meeting which was discussed in the case. The meeting was actually held in the hotel room in Zurich, the problem was raised in the meeting to develop the new market strategy which will be launched in China that will enhance their fire detection products and services. The main consideration for this meeting was introducing a new brand in the environment which was different from Siemens’ usually high tiered products.

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The solutions which were discussed in the meeting related to the problem are:

  • Combination and enhancement of markets such as Brazil, Russia, India and China for selling the fire detection products and services.
  • Produce the new family of products with new brand name and sell it in China.

The situation was complex because the competitors of Siemens Companywere getting strongerinternationally. The head of the fire detection products and services Mr. Matthias Rebellius took time for a better decision because they were not satisfied with these solutions.

SITUATIONS ANALYSIS

 

Options Siemens have to fight emerging low-cost rivals for fire detection products in China

The general options raised in the case are given below:

The first option is to sellout the fire detection products by the combination of the Brazil, Russia, India and China (BRIC) markets. Every person of the company was satisfied by this options that the products will easily sell with much revenue and help to improve the company’s future growth.

The second option was proposed by the Dr. Carsten Liesener, Head of the Fire detection products and services. He said: The business unit of fire security and safety products on its head and to develop the new family product with new brand name and sell it in China with value-adding partners; for that, he proposed a new product family, “SIEMENS CERBERUS”. This product family brand would target the M2 and M3 markets which were not being specifically done by Siemens’ usual brands such as SBT BC8001/2. This will tap into the untapped territory of the market such as M3 with a capacity of around 17 Million units being sold..............

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