applicable theory with the case study “Xelibri – A Siemens Mobile Adventure.”  

applicable theory with the case study “Xelibri – A Siemens Mobile Adventure.”

Introduction

A strategy is a critical business tool that business managers use to analyze problems and develop solutions related to business management. Thus, strategic management helps firms understand how to achieve a competitive advantage over their competitors. Effective strategic management policies state the steps that an organization can undertake, what not to do, and how to adapt to specific changes. A better understanding of strategic management can be enhanced by learning strategic management concepts and theories (Gajurel, 2008; pg. 1). Learning strategic management enables a student to understand strategic outcomes and processes, understand the company’s capabilities, and its competitors. Strategic management could revolve around resources, learning, innovation, and knowledge. Strategy can also indicate the long-term scope and direction that an organization undertakes by evaluating its resources concerning the change in environment as well as satisfy the stakeholders’ expectations (Gajurel, 2008; pg. 3). A strategy is a crucial aspect of career development as it influences the formulation of policy in real-life situations. Organizations should develop their strategy by understanding the ideal positions that affect market competition, external environments, competencies, stakeholders’ expectations, and internal environments (Gajurel, 2008; pg. 3). Hence, this reflection paper seeks to evaluate an applicable theory with the case study “Xelibri – A Siemens Mobile Adventure.”

Internal Strategic Environment

An organization’s internal strategic environment involves the aspects that affect the organization from within, such as organizational culture, organizational structure, resources, and leadership system. The internal strategic environment enables an organization to determine its strengths and weaknesses (Analoui and Karami, 2003; pg. 68). Thus, internal strategic analysis is concerned with the categorizing and improvement of the company resources. The internal strategic environment enables a company to differentiate itself from other companies and develop, as well as improve its competitive advantage. It also allows the company to focus on specific aspects of resources that affect the company, such as its strategic leadership (Analoui and Karami, 2003; pg. 89).

According to Analoui and Karam (2003; pg. 89), a resource is an asset, skill, process, or knowledge that a firm control and may strengthen the company if utilized effectively to achieve a competitive advantage. Thus, a resource is an element that an organization involves in or can undertake effectively based on their capabilities. On the other hand, a resource can turn up as a weakness to the firm or business if it does not have the sufficient capacities to produce pleasant outcomes or performs relatively low compared to its competitors (Analoui and Karami, 2003; pg. 89). Thus, resource-based evaluation helps determine the relationship between the firm’s relationship and its performance. Some of the aspects that help achieve resource-based strategy include its information structure, strategic planning, brand image, and organizational structure. Understanding the internal strategic environment also helps an organization to analyze the ability of its resources to sustain it. Resource sustainability looks at the ability of the resources to generate profit and achieve the desired function.

Further, organizations should develop business strategies that best utilize the institution’s capabilities and resources (Analoui and Karami, 2003; pg. 90). Developing these resources could be enhanced by identifying the shortcoming of these resources and invest in improving their weaknesses as well as developing their capital base. Some of these developments could be in the form of replacements or investments to enhance the continuous operation of the company and complement its current capital to obtain further competitive advantage and increase its strategic opportunities.

Xelibri is a fashion line of accessory phones developed by Siemens. The success of Xelibri is determined by the steps that Siemens uses to launch the brand. Siemens AG is a company focused on designing electrical products and electronics, and bases its headquarters in Munich, Germany (Clemens, Hagen, Hendrich and Sassman 2001; pg. 2). Siemens has developed several products ranging from computers and mobile phones to power plants and trains. The company is also reported to have employed over 430,000 employees from over 190 countries during the year 2002. During the financial year, the company said to have made about € 84 billion, from which € 18 billion were from sales accumulated in Germany alone. The company also made revenue of € 144 billion from General Electric during the financial year 2001 (Clemens, Hagen, Hendrich and Sassman 2001; pg. 2).

The company started in 1847 under the leadership of Werner von Siemens. Initially, it was called the “Telegraphenbauanstalt von Siemens & Halske” and was concerned with precision-engineering. The company slowly developed over the following years to produce several innovations, such as pioneering the development of electric streetlights in Berlin, construction of the first electric streetcar, and an electronic elevator (Clemens, Hagen, Hendrich, and Sassman 2001; pg. 2). The company started by focusing on electronic engineering before branching into electrical medical equipment, lighting, radio transmission technology, and other household types of equipment during the 1920s. Siemens, after the end of World War II, expanded its operations to involve brands that were involved in data processing, semiconductors, and automotive engineering. It also regained market control in traditional export chains, signifying its old strategic position in the global market, as witnessed in the 1960s. To understand Siemen’s market structure, one can evaluate its two major sections; Information and Communication Mobile (ICM) and Siemens Mobile Phones (MP).

Information and Communication Mobile (ICM)

ICM is a section headed by Group President Rudi Lamprecht and is concerned with the end-to-end provision of solutions concerned with products such as the development of infrastructure related to mobile communication, enhancing the functionality of mobile devices, mobile applications, and wireless modules. These multiple brands enable ICM to stand out and establish itself as the leading network operators as well as influencing the third-generation mobile marketplace among critical Western European markets, which are heavily reliant on wireless telecommunication. Such an instance is evident in the company’s Universal Mobile Telecommunication System (UMTS/3G). In the financial year ending 2002, ICM’s EBIT generated an income of € 96 million, an improvement from the previous year, where it made a loss of € 307. The increased income generation can be attributed to the injection of € 92 in the EBIT project (Clemens, Hagen, Hendrich, and Sassman 2001; pg. 3).

External Strategic Environment

The external strategic environment includes all the factors outside an organization’s operations that can determine its organizational performance. External strategic evaluation attempts to determine the relationship between the organization and its competitors. Thus, the cumulative competitors’ pool develops an industry that also determines an organization’s external strategy (Leatt and Mappa, 2003; pg. 28). The external environment also includes customers, clients, regulators, suppliers, accrediting agencies, insurers, and other bodies related directly. While evaluating its external environment, an organization can consider several elements that border demographic, cultural, ethical, ecological, legal, political, technological, social, biological, and public policy knowledge. According to Leatt and Mappa (2003; pg. 28), strategic organizational managers can develop several approaches to influence their analyses which may involve close critique of strategic issues, evaluating the impacts of the vital topics for the institution, scanning the environment to recognize any strategic concerns (threats, developments, threats, opportunities, or possible events) that could impact business operations, projecting or forecasting the potential growth of strategic management, and discussing the results of the evaluation with leaders who can help in the design and implementation of its techniques.

Siemens Mobile Phones (MP)

During the financial year 2002, the company commanded a world market share of 8.3%, occupying the position as the fourth largest handset dealer in the market after dropping from the third position in the previous year. During the opening quarter of the financial year 2003, the company managed to register a record sale of over 11 million mobile devices, a 22% increase compared to the earlier year’s opening quarter (Clemens, Hagen, Hendrich, and Sassman 2001; pg. 3). MP also attempts to satisfy every market segment ranging from teenagers who consist of the light-consumption sector to business consumers who invest in the application and featuring of prestigious products. For instance, a unique feature that Siemens mobile phones exhibit is the voice-centric segment (VC) that enables cheap and straightforward portable devices that operators rely on when developing when classifying light users and operators into pre-paid sections (Clemens, Hagen, Hendrich and Sassman 2001; pg. 3).

The company also develops its devices using the latest technology, such as the third generation and convergence technique, together with personal digital assistance (PDA) that satisfies most of its clients’ needs. Additionally, the Accessory devices division (AD) also equips other brands such as car kits and headsets which also classifies as a market section that the company seeks to satisfy. According to Lamb, Hair, and McDaniel (2008; pg. 206), market segmentation enables the subgrouping of people according to their similar characteristics, thus allowing the producer to satisfy their collective needs. Thus, market segmentation enables the subdivision of the general market into meaningful, somehow related, and recognizable groups, thus allowing the marketer to satisfy the specific needs of their clients’ segments (Lamb, Hair, and McDaniel, 2008; pg. 206).

Strategy Diamond (Elements of strategy)

Effective strategy formulation calls for a precise definition of elements of the plan, which will enable the company to achieve its objectives or compete with its competitors favorably. Settling on a strategy also calls for a thorough evaluation of sets of choices (Wherther and Chandler, 2010; pg. 48). These choices evoke to the five elements that managers have to consider during decision-making, also known as strategy diamond; a) arenas, b) vehicles, c) differentiators, d) economic log, and e) staging and pacing (Wherther and Chandler, 2010; pg. 48). Most managers involve one or two such elements in their strategies. This model of strategy formulation enables managers to determine which sections of their organizations require overhaul or improvement.

1. Arenas

Arenas represent the areas that the firm intends to take part in. The formulation of strategies influencing a firm’s arena observes aspects like services, distribution channels, products, geographic areas, market segments, stages of increasing the products’ values, and technologies related to it (Hambrick and Fredrickson, 2005; pg. 52). Identification of arenas is specific, which is unlike impartially general vision statements. Arenas indicate to the managers what the company should indulge in and what not to partake. Additionally, the arenas inform firms how to contract from service providers and policies they can consider. For instance, Siemens managed to effectively use the short message service (SMSs) to influence its market base. The company ensured that the service achieved end-user needs by enabling them to send information between users. The company intends to make its product suit humans in their daily life rather than use it only for voice services or SMSs. Thus, the company introduced the wireless application protocol (WAP) to entice the European users with mobile internet (Clemens, Hagen, Hendrich and Sassman 2001; pg. 5).

1. Differentiators

These are attributes or features of a company’s service or product that enables it to gain a competitive advantage. Companies can differentiate themselves by developing specific dimensions of their company, such as brand image, technical advancement, customization, quality, price, and reliability. Siemens was quick to introduce the prepaid services that enabled clients to purchase airtime minutes rather than engage in long-term agreements with their providers (Clemens, Hagen, Hendrich and Sassman 2001; pg. 4).

1. Vehicles

These are the means that enable marketers to reach their target market. This stratagem allows international firms to gain broader outreach. A firm can increase its vehicles by improving its technological developments and adoption or forming an alliance with its suppliers or competitors that already use the technology, which enables the company to accelerate the passage of the capacities or resources (Wherther and Chandler, 2010; pg. 48). From the case study, Siemens introduced the General Packet Radio System (GPRS or 2.5 G) to replace the GSM that was used for transmitting Multimedia Message Services (MMSs).

1. Staging and pacing

These terms refer to the effectiveness and swiftness or speed of strategic moves. Staging choices range from available resources such as human capital, cash, and knowledge.  Staging decisions are led by several factors such as urgency, resources, the desire for early success, and credibility. Most organizations have to match their available resources to handle the available opportunities when they do not have a large capital base. Further, some opportunities that effectively utilize new arenas may not be permanently open, thus require early wins and the urgency of stakeholders’ reactions. Such a stratagem that Siemens uses in its operations is outsourcing services. Outsourcing helps the company to balance the demands for constant production of accessories with the increasing needs for high-quality highly-demanded products (Clemens, Hagen, Hendrich and Sassman 2001; pg. 6). For instance, the company has the outsourcing models: Electronic Manufacturing Services (EMS), which was concentrated on making handsets such as Flextronics, and the other model, Original Design Model (ODM), that focused on both designing and fabricating devices such as the Finnish Microcell.

1. Economic logic

Economic logic implies to the ways that a firm can use to generate profits, through the generation of positive returns, over and costs exceeding its capital. For a company to achieve ordinary profits, it should satisfy every fixed, financial, or variable cost. This formulation focuses on probable revenues and expenses, that is the firm’s ability to convince their customers to purchase premium products or service or meet its costs of production respectively. Xelibri realizes the vitality of pricing in profit generation (Clemens, Hagen, Hendrich and Sassman 2001; pg. 11). In response to this, Siemens has invested in improving its design and appearance to make it more appealing to customers, which will enable it to increase its device prices. For instance, the company would focus on establishing a minimum price for a Xelibri fashion accessory.

Strategic Recommendations

The increasing demand for electronic devices implies that Siemens should develop strategies that ensure it gains a vast competitive advantage against its competitors through several techniques. For instance, the company could invest in its fabric and color trends to influence their customers’ preferences. Mobile phone designs in the current market seek to satisfy phone texture and finishing through differences exhibited in material value and characteristics (Ji, 2012; pg. 379). In response to this strategy, the company can partner with fashion brands and designers to highlight the sections that require to satisfy customer desire.

Another trend that the company should consider incorporating in its devices is equipping them with elements that improve engagement and accessibility. For instance, the company could design mobile devices which portray broad and comprehensive texts or graphics, easy to use technology, easy aid accessibility which will improve its engagement value. Such programs that the company can use include the addition of health monitoring applications to monitor correct reading of prescriptions at home or monitor blood pressure levels (Naha and Whale. 2012; pg. 38). Moreover, the company can seek to improve its device internet adaptability to accommodate the most recent fifth-generation (5G) wireless network, which precedes the fourth generation and third generation, thus maintain a leading role in technological trends (Webb, 2018; pg. ix). This latest technology facilitates faster internet connection and communications. Therefore, it will attract customers who require fast internet devices, thus improve revenue earning. However, the company can achieve the 5G concept by improving its infrastructure and equipment. However, before implementing those changes, the company should seek approval from the 3^rd Generation Partnership Project (3GPP) who evaluates whether the update is an improvisation of the previous generation or a new one (Webb, 2018; pg. ix). To ensure that the new technology gains a competitive advantage, the developers should equip it with the enhanced mobile brand (EMB), which guarantees speedy broadband connection compared to 4G or improving the device with extensive machine connectivity, which enables the network to connect to many devices.

Bibliographies

Analoui, F. and Karami, A., 2003. Strategic management in small and medium enterprises. Cengage Learning EMEA.

Clemens, F., Hagen, H., Hendrich, F. and Sassmann, H. 2001. Xelibri: A Siemens Mobile Adventure.

Gajurel, D., 2008. Strategic Management: A Dynamic Perspective.

Hambrick, D.C. and Fredrickson, J.W., 2005. Are you sure you have a strategy?. Academy of Management Perspectives, 19(4), pp.51-62.

Ji, Y.G., 2012. Advances in Affective and Pleasurable Design. CRC Press.

Lamb, C.W., Hair, J.F. & McDaniel, C., 2008. Essentials of Marketing , South Western: Cengage Learning .

Leatt, P. and Mapa, J. eds., 2003. Government relations in the health care industry. Greenwood Publishing Group.

Naha, A. and Whale, P., 2012. Essentials of mobile handset design. Cambridge University Press.

Webb, W., 2018. The 5G Myth: When vision decoupled from reality. Walter de Gruyter GmbH & Co KG.

Werther Jr, W.B. and Chandler, D., 2010. whatsappStrategic corporate social responsibility: Stakeholders in a global environment. Sage.