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-February 25, 2008


Supply Chain News: Siemens Announces Strategy to Penetrate World Markets with Lower Cost Products


Executive Says Opportunity is $150 Billion Annually, with High Growth; Products Will Often be Manufactured in Local Markets


By SCDigest Editorial Staff


An executive at Siemens, a global manufacturer of a wide range of industrial, medical and consumer products, said that the German-based company was developing new versions of many of its leading products for developing economies that would be much lower priced than the versions it sells in more developed markets.

In a recent presentation to financial analysts, Siemens Chief Strategist Horst Kayser said that the company has plans to aggressively expand output of standard or scaled back versions of its regular products that will be aimed at more price-sensitive markets.

The obvious driver – Siemens sees the potential to achieve substantial growth through greater participation in many of these developing but rapidly growing economies.

Kayser said the total annual sales opportunity in all developing markets is about $100 billion euros annually, or roughly $148 billion US dollars, with half of that opportunity in China alone. He said growth opportunities in these markets should be 10-20% per year.

As part of the strategy, Siemens will increasingly manufacture products directly in these low-cost country markets, and believe, as a result, it can achieve high margins even at much lower sales prices.

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