Siemens’ Case Study
The time is now. Fossil fuels are quickly becoming an outdated energy source, because they are rapidly depleting. For energy companies like Siemens, it is now the crucial moment where there needs to be adjustments in strategy to reflect a changing world. However, the company must be in a good financial position to do so. Clearly, there needs to be enough free cash to reinvest into alternative energy sources as a way to ensure the company continues to exist long after the fossil fuels wells have run dry. Thus, this analysis aims to explore Siemens’ financial position to determine whether or not there is enough of a balance to go forward with massive investing into new technologies.
Pro-Forma Cash Flow Statement
Pro-Forma Cash Flow Statement (In Millions)
Change in Receivables
Cash From Sales
Cost of Sales
Change in Payables
Change in Cash
Research and Development
Selling & Administrative
Assets Reduction Due to Spin-Off
Total Cash Expenses
Net Cash From Operations
Investment and Financing Transactions
Other Financial Income
Total Nonoperating Cash Changes
Net Cash Increase (Dec)
Strategy: Maintain current operations, while cutting back on R&D spending slightly. The company must first get itself a stronger cash flow to rethink more investment in R&D of alternative energy products in bulk.
Strategy: Investments in R&D are still worthwhile, but in very limited amounts. It is clear there is a need to stay competitive, but spending must be cautious because of the poor performance in 2011.
Strategy: With a weak ability to turn a profit increasing cash flow is difficult. The company would need to scale down the cost of operations first before future investing.
Strategy: Look to acquire smaller successful companies in the market.
Strategy: Explore smaller, successful companies that already have their presence made in the market share. There is a potential for relatively high ROE without all the initial start up investments.
Strategy: Heavy investments into wind energy resources. Possible expansion into Southern California for large scale wind turbine plant construction.
Strategy: Scale down development of alternative energy spending and focus on the combustion of coal, which the company is already a proven leader in. This is ultimately the return to something the company does well to increase profits.
Strategy: Begin the steady decrease in investments related to fossil fuels. There is no growth here and even though the market is still lucrative today, it will begin to end soon. The company needs to begin the transition into alternative energy designs.
By examining Siemens’ cash flow, it is clear that the company had more cash flow in 2013 than in 2012. Although the profit margin was down in 2013 to 6.3%, rather than the 6.3% seen in 2012, the cash the company has is an indication it has the potential to invest back into the corporation during this crucial decision moment (Siemens, 2013). This free cash can open up funding for more research and development spending, but such spending must be done cautiously in order to keep free cash available for the purpose of balancing liabilities and other losses in the next few years to keep the company in a stable financial position as the market changes so rapidly.
Should Siemens invest in a number of alternative energy technologies to ensure it has its hand in which ever one proves itself as most successful? This may seem like the best strategy because the market environment is so uncertain. However, this is not the case for Siemens. The company just underwent a major restructuring in 2008, “consolidating the number of sectors from more than one dozen down to just three — Industry, Energy, and Healthcare” (Rothaermel & Hoepfer, 2010, p 283). It would be a step backwards to just undo all the work that was so recently done in order to restructure again with a model that obviously was not working for the company previously.
Instead, Siemens should focus on a more narrow net and invest into one particular field. This would allow the company to maximize the ROE on its investments made. Currently, the largest market share of alternative energy is biomass, which made up about 6% of the global energy sold in 2008 (Rothaermel & Hoepfer, 2010). However, there are more lucrative potential markets for Siemens, which has already begun the process of investing in wind energy technologies.
Wind turbine power is a source of energy that has been undergoing some major changes recently. According to the research, “modern windmills are high-tech devices capable of producing several megawatts of energy each, enough for one turbine to supply electricity to an entire small village” (Rothaermel & Hoepfer, 2010, p 288). They are extremely efficient at producing renewable power when used in the correct environment or circumstances. There have been major wind plant construction projects recently, showing proof of the energy source’s success. As such, “wind power is deemed to have immense upward potential for at least the nest two decades” (Rothaermel & Hoepfer, 2010, p 288). It is thus a sound investment because of its high potential in the years to come. Therefore, “it is the fastest growing energy alternative sector, a trend that is predicted to continue” (Rothaermel & Hoepfer, 2010, p 289). Yet, wind power is extremely expensive to get started in, with high barrier entries (Rothaermel & Hoepfer, 2010). This would also justify the concept of Siemens investing heavily into only one technology, as it could not feasibly try to enter the wind power industry only partially.
Another reason why wind power would be the best choice for investments is because the company is already in a strong position in the market. Siemens has experience already, and so it can maximize its early start in the field to become one of the dominant players in the market environment. Here, “Siemens Energy builds wind turbines, claiming to have globally 1,800 megawatts of offshore wind capacity installed or on order as of late 2008. One major project off of Denmark’s seacoast was its 2008 Rodsand II wind farm contract with E.ON to manufacture 90 wind turbines” (Stanat, 2010). Today, there are very few competitors in place already in the market, making Siemens’ poised for market entry in a big way (Rothaermel & Hoepfer, 2010). Siemens can create an empire built on a renewable source early on and then carry that success far into the future. This also makes it unnecessary to acquire companies already in the market to capitalize on another’s experience, which will ultimately keep more cash flow in the company’s reported financials as well.
Rothaermel, Frank T. & Hoepfer, Matt. (2010). Siemens Energy: How to Engineer a Green Future?
Siemens. (2013). Annual Report. Web. http://www.siemens.com/investor/en/publications_calendar.php
Stanat, Michael. (2010). Corporate sustainability strategies: A Siemens case study. SIS International Research. Web. http://thoughtleadership.sismarketresearch.com/energy-climate-change-research/2010/2/9/corporate-sustainability-strategies-a-siemens-case-study.html
Stock Analysis on Net. (2014). Siemens AG. Research & Analysis. Web. http://www.stock-analysis-on.net/NYSE/Company/Siemens-AG/Financial-Statement/Statement-of-Cash-Flows
Get Professional Assignment Help Cheaply
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Why Choose Our Academic Writing Service?
- Plagiarism free papers
- Timely delivery
- Any deadline
- Skilled, Experienced Native English Writers
- Subject-relevant academic writer
- Adherence to paper instructions
- Ability to tackle bulk assignments
- Reasonable prices
- 24/7 Customer Support
- Get superb grades consistently
Online Academic Help With Different Subjects
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
What discipline/subjects do you deal in?
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Are your writers competent enough to handle my paper?
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
What if I don’t like the paper?
There is a very low likelihood that you won’t like the paper.
- When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
- We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.
In the event that you don’t like your paper:
- The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
- We will have a different writer write the paper from scratch.
- Last resort, if the above does not work, we will refund your money.
Will the professor find out I didn’t write the paper myself?
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
What if the paper is plagiarized?
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
When will I get my paper?
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
Will anyone find out that I used your services?
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
How our Assignment Help Service Works
1. Place an order
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
2. Pay for the order
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
3. Track the progress
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
4. Download the paper
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!