Inflation and Siemens Energy Essays

Submitted By happyyang1111
Words: 965
Pages: 4

(Siemens Energy)
2.0 Assumptions
Currently, Siemens Energy are facing several issues which can affect its economic benefits. Siemens is suffered from a bribery scandal, which can weaken the reputation of the company. This problem causes the company huge losses, not only with the $1.6 billions in fine, but also the notoriety in long term. Another issue is that if Siemens places some significant bets on the disruptive innovations of alternative energies, the company will face the risk of being relegated to the sidelines as new entry when the bets are resulted badly. And it also influences the company badly. So the following statements are analyzing the current situation with PESTEL analysis.

3.0 Analyse features of the macro-environment that may affect siemens energy using the PESTEL framework

3.1 PESTEL analysis
An analytical tool, called PESTEL, respectively represented by political, economic, socio-cultural, technological, environmental, legal, ethical and demographic, has been adopted to analyze the current situation of Siemens Energy.

Political:
The factors refers to the government intervenes activities such as political stability, tax policy, tariffs, environmental law, trade control, import and export restrictions, laws regulating environment pollution, etc (Ihsan, 2012).
The government has create a department of Country Energy Organization, the purpose is to protect the public from the threats of inconsonant programs. Since 2008, the impact of the greenhouse gases arises the awareness of the dangerous of the climate change, it also increased the concerns with the energy securities and energy issues. According to the case of the Siemens Energy, German government made a controversial decision to withdraw from nuclear energy in late 1990s as Siemens continues to conduct research in nuclear power (Rothaermel,2013).

Economic:
It is the factor that refers to the growth rate, inflation rate, exchange rate, labor costs, unemployment trends, interest rates, price fluctuate, economic recession and economic booming etc. For instance, the interest rate can affect the cost of capital for further extending the business, and the exchange rates can influence the supply and price of importing goods (Hitt, 2013)

Based on the case study, it indicated that the price of the crude oil had the up-warding trend from 1990 to 2008 dramatically even-though it fluctuated volatile. The price has been reached to $145.15 per barrel in July 2008. However, the price of the crude oil dropped down to only $50 per barrel in February 2009 due to the Global Financial Crisis.

Socio-cultural:
The factors include the education level, emphasis on safety, lifestyles, attitudes toward green or ecological products, attitudes toward the renewable energy, age distribution and life expectancy rates, population growth rate, etc (Rothaermel, 2013)

Although German had controversial decision on nuclear in 1990s, German parliamentary election in 2009 showed that the German nuclear industry could be recovered. As they thought that only relying on the renewable resources cause in supply shortage.

Technological:
It involves the technological change rate, research and development activities, technology incentives, access to the newest technology, etc (Fred, 2012).

Due to the power outage issue, a “smart grid” was developed by industry branch and was adopted by Siemens in fiscal year 2009. Further more, Siemens has been invested in the multipurpose research and development (R&D) for the alternative-energy resources, nuclear power, hydropower program, etc since very begging of the company. And it is continuing investing in the R&D, as the income stament showed the R&D expenses were 586 in millions of euros.

Environmental:
The factors in ecological and environmental aspects including climate change, weather, air and water pollution, recycling, waste management and endangered species etc (Fred, 2012)

As the climate change of global…