What is competitive advantage?
Competitive
advantage occurs when an organization acquires or develops an attribute or
combination of attributes that allows it to outperform its competitors.
Company Profile: Siemens AG
Siemens
AG is a German multinational conglomerate company headquartered in Berlin and
Munich. It is the largest engineering company in Europe. The principal
divisions of the company are Industry, Energy, Healthcare, and Infrastructure
& Cities, which represent the main activities of the company. The company
is a prominent maker of medical diagnostics equipment and its medical
health-care division, which generates about 12 percent of the company’s total
sales, is its second-most profitable unit, after the industrial automation
division.
Company Profile: General Electric
General
Electric (GE) is an American multinational conglomerate corporation
incorporated in New York and headquartered in Fairfield, Connecticut. The
company operates through the following segments: Technology Infrastructure,
Capital Finance, and Consumer and Industrial.
Rivalry between Siemens and GE
Siemens
and GE has been each other’s rival counterpart for decades. GE has been the more
dominant one in the feud: most recently demonstrated through Siemens losing to
GE in bidding for the acquisition of the French conglomerate Alstom. The only
way for Siemens to get to the top is through gaining competitive advantage over
GE.
— New Technologies: Siemens may invest more in R&D
to innovate and create new possibilities for the design of their products, the
way they are marketed, produced, delivered and the after sales service
provided. It is the most common way for
strategic innovation. However, this will only work on new companies in cases
where the shifting costs are really high (for example, infrastructure and
energy industries).
— New or Shifting Buyer Needs: If we consider the case of
technology, newer are invented and sold in the market while the older ones are
becoming obsolete rapidly. Siemens could focus on finding the shifts in the
buyer needs in the industries it serve and then target to serve those segments
with something new and better.
— Emergence of New Industry Segment: A new way is conceived to regroup
existing segments can create competitive advantage. The possibilities encompass
not only new customer segments but also new way of producing particular items
in a product line or new ways to reach a particular group of customers.
— Shifting Input Cost or Availability:
Siemens may
consider shifting its manufacturing segments in Asia as it would reduce its
resource costs by a huge chunk, and create scope for it to grow through
investment and as well as through attracting buyers by cutting prices.
— Change in Government Regulations: Adjustments in the nature of
government regulation in areas such as product standard, environmental
controls, restrictions in entry and the trade barriers can allow Siemens to
create competitive advantage over GE.
http://www.wsws.org/en/articles/2014/07/31/alst-j31.html
I got the info that I was looking for.
ReplyDeleteThank you.
good analysis, but i don't think its enough for siemens to outperform GE.
ReplyDeleteVery insightful and well written. Great job!
ReplyDeleteGreat Analysis !!!!!Got to learn a lot of new and interesting stuff !!!!!
ReplyDeleteA very insightful piece. I was unaware of this perspective of the electronics industry, and the relative competition they undergo to strive and survive in the market. Thanks !
ReplyDeleteGreat case. Very informative, didn't even know half the facts myself. Thanks for sharing :)
ReplyDeleteVery informative. Ive learnt a lot of new things. Good writing and very easy to understand. I would love to see more like this one.
ReplyDeleteAs a electronics freak i am delighted to know about their competitor. Thanx to the writer for describing the fact in a easy way . From now on I am following your blog. Keep posting electronics write up :)
ReplyDeleteevery competition has drawbacks alongside advantages. since the size of the companies are very different, the complications are dominant.on the other hand, the facts mentioned in the article are very good and nicely written. bravo !!!
ReplyDeleteVery well written. Thank you for bringing this to limelight. Keep posting stuff like this brother. Cheers ! ! !
ReplyDeleteVery informative. Got to learn a lot about Siemens and how they maintain their competitiveness in todays highly saturated market.
ReplyDeleteI noticed that you have not actually mentioned the date when GE acquired Alstom.
ReplyDeleteIt seems u studied a lot about sustaining and creating competitive advantage ...very well organized blog..well done nabil.
ReplyDeletereally good analysis on Siemens and GE rivalry, it would be great to know about the rivalry on an industry to industry basis.
ReplyDeleteReally informative and good use of visual aid.
ReplyDeleteHad no idea GE had done such acquisitions. Cheers!
ReplyDeleteThanks a lot for posting this excellent article.
ReplyDeleteThe acquisition won’t do much damage to Siemens as being a large company gives you plenty of scopes.
ReplyDeleteGreat analysis bro!
ReplyDeleteSiemens’ joint venture with BenQ did not succeed that much in the past, so we may assume that its acquisition of Alstom would have gone the same.
ReplyDeleteSiemens though still dominates in the medical equipment industry, but unlike GE it has also faced failures in its mobile telephone and other household appliances industry.
ReplyDeleteCorporate rivalry is something that always gets me. Great work!
ReplyDeleteReally informative and good use of visual aids.
ReplyDeleteFrom the figures you have provided, it seems that GE is vastly ahead of Siemens.
ReplyDeleteInvesting in newly created industry can only be the way for Siemens to get aboost.
ReplyDeleteShifting costs being high in the medical equipment industry is one advantage for Siemens as the hospitals, clinics, etc. will not tend to suddenly shift its equipment suppliers.
ReplyDeleteGood work, but you should have posted the sources of the figures for authenticity.
ReplyDeleteThe reason GE’s ahead is because it has its stakes in two more industries than Siemens.
ReplyDeleteHilarious title, and really interesting information on the rivalry.
ReplyDeleteSiemens would not be able to grow any further until and unless it invests in newer industries.
ReplyDeleteHow about Siemens invest on software based industries? It has a lot of scopes.
ReplyDeletegreat analysis. Got many useful information about Siemens.
ReplyDeleteGeneral Electric has been the almost untouchable role model for the Siemens group for decades. However, if Siemens really do gain these competitive advantages, then Siemens not to be worried so much about this challenge.
ReplyDelete