Siemens Fridge Show Strategic Defeat

Submitted by: Jerri Lily

This year, take the high road always insisted that Siemens refrigerator moves frequently, the focus of the industry: first announced its price cuts of 5% -20%, refrigerators, followed by China, Wu Division chief marketing officer announced his resignation at the same time, Siemens in Germany poor domestic sales, the average price had dropped out of the rankings in the forefront. There are indications that the so-called Siemens refrigerator is abandoning its high-end line of low-end development to the market, which is also the industry downturn that its global strategy is an important performance.

Siemens refrigerator market continues to shrink

In the context of the global financial crisis, China has become the world’s largest emerging market of consumer electronics in China, supported by a large domestic market, the global home appliances company ushered in the opportunity to develop the China market. However, Siemens refrigerator has been in China showed signs of recession. This year, Siemens has undergone major changes in marketing strategy, which has long abandoned the high-end image, products significantly reduce the price. May this year, BSH Home Appliances (China) Co., Ltd. announced that its subsidiary Bosch, Siemens fridge for three years for the first time a variety of large-scale price promotions, price cuts of 5% to 20%.

Insiders pointed out that Siemens refrigerator is its market share continues to decline an important reason to launch a price war, increase sales volume through price cuts or forced to live their move. According to Euromonitor (European perspective) data show that in recent years, Siemens share in a declining trend in the refrigerator. Among them, the three-door refrigerator has the market share of 32.0% down to 15.2%, more than half of the overall shrinkage. On the door refrigerators from 2008 to 15.3% to 14.3%. This year, Siemens has significantly accelerated its market share decline, down 15.5% from the beginning of the year to 11.2% in the three-door refrigerators on the market open and were also showing a 6.2% and 5.6% market share decline, which is to enter China since the emergence of Siemens the largest decline.

“The strategy behind the overall decline of Siemens operating mode is the root cause.” One senior analyst said. Development process from the industry perspective, Siemens is the shortage of time in product development together, they built a short time to achieve rapid product development of industrial structure. However, when a surplus of products into the global era refrigerator market, the Siemens business model did not change in time, the shortage of time is still intact under the development model, which determines its market demand can not be based on current production and operations adjusted for changes in market share fall is also reasonable.

Old product innovation Deficiency

The rapid decline in market share, Siemens with its lack of technological innovation, product obsolescence have great relevance. According to media reports, Siemens 0 degrees fresh market since 2002, has been in use ever since, and even the recently launched cross-border variable temperature zone technology in the industry is already quite mature, and its innovation capacity decline is evident. Lack of technological innovation refrigerator brand in Europe and America embarked on the path of plagiarism, according to informed sources, Siemens is also being developed to imitate fellow high-end products for the Chinese market.

If the lack of technology and product innovation contributed to the rapid decline in market share, Siemens important reason for the declining quality of the product is to speed up the rate of decline of its market. Since entering the Chinese market, Siemens has been advertised high-quality products, but frequent quality problems has forced consumers to stay away. It is reported that Siemens Refrigerators consumers to buy two years after the evaporator to a serious problem, only two years old refrigerators refrigerator only as depreciation treatment. In recent years, product quality problems like this, frequently appears in the Siemens refrigerator body.

“The rapid decline in market share is likely to lead to the resignation of a key WU Branch.” Charge of a household electrical appliance enterprises, “said Siemens cursory change will also become an important strategy for the performance of recession.” This year, despite the global financial crisis is waning, while Siemens has continued to accelerate the pace of market decline: rapid decline in market share, executives replaced. In a sense, the frequent changes of executives is that the current market downturn of its lack of effective means of settlement, personnel changes at best a tactical level, minor repairs, if not from a strategic business model on subversion Siemens can only extend the current recession trend.

Not only in the Chinese market, in the headquarters of the German market, Siemens is also showing signs of overall decline. Earlier this year, the German statistical agency IFR authoritative data on the local market of refrigerators “average price” monitoring shows: the mainstream of the market’s Bottom mount (referred to as BM), Siemens has long been out of the price list in the forefront. From this, Siemens refrigerator also conceal the decline in the European market decline.

The current global electronics market well into the era of excess products, who can quickly meet market demand, market competition will be made will come to dominance. Obviously, Siemens is still not out of the surplus for firms in the business model, which is its global strategy in the underlying causes of recession. If you can not solve the problem of the strategy, Siemens refrigerator to further declines in market share is only a matter of time.

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