Siemens 2010 Annual Report Download - page 120

6 To our shareholders 21 Corporate Governance 49 Combined management’s discussion and analysis
50 Business and operating environment
78 Fiscal  – Financial summary
81 Results of operations
98 Financial position
110 Net assets position
113 Overall assessment of the economic position
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Our strategy comprises what we call our three strategic direc-
tions:
> focusing on innovation-driven growth markets,
> getting closer to our customers, and
> using the power of Siemens.
Through the end of fiscal , we implemented our strategy
through the Fit program. In the context of Fit, we
defined ambitious targets for growth, profitability, liquidity and
our capital structure that we aimed to achieve by the end of
fiscal . These targets were established with normal busi-
ness cycles in mind, i.e., without taking into account the
global recession caused by the financial crisis and its afteref-
fects on our business over the past two fiscal years. For further
information on the financial measures of the Fit pro-
gram, see “– Financial performance measures.”
The Fit program divided the potential harbored by
Siemens as an integrated technology company into four cate-
gories: Portfolio, People Excellence, Operational Excellence
and Corporate Responsibility. We have carefully targeted our
Portfolio at attractive markets by means of stringent resource
allocation and a clear focus on the three Sectors. We deliver
value for our customers because, within the context of People
Excellence, our standard is to employ the best workers world-
wide – a precondition for a high-performance culture. Diversity
in our management is a key component of our corporate strat-
egy and a fundamental prerequisite for our Company ’s long-
term success. Open Innovation – opening up businesses to
bring in the expertise of a wide range of internal and external
experts in different areas from around the world – helps to
ensure that we continue to constantly develop and refine our
technology. Open Innovation formed part of the Operational
Excellence element of Fit, as did supply chain manage-
ment, which is intended to increase efficiency in sourcing and
the supply chain throughout our Company. The Corporate
Responsibility element, finally, has seen us introduce a uni-
form Compliance Program worldwide, with systems and pro-
cesses to ensure proper conduct, and continues to highlight
both our commitment to society and our acknowledgement of
the significance of climate protection.
Building on the achievements of our Fit program and the
preceding company programs, we are approaching the future.
Effective fiscal , One Siemens is our framework for sus-
tainable value creation, with a financial target system for cap-
ital-efficient growth and the goal of continuous improvement
relative to the market and our competitors.
We will measure our performance against our competitors. Our
goal and our aspiration is to consistently outperform our com-
petitors and to set standards for leadership – with respect to
financial performance as well as operational strength. The fi-
nancial target system of One Siemens defines financial key
performance indicators for revenue growth, for capital effi-
ciency and profitability, and for the optimization of our capital
structure. In addition, we set hurdle rates that generally need
to be considered before acquisitions are executed. Further, we
defined an indicator targeted at an attractive dividend policy.
We believe that these indicators will play a key role in driving
the value of our Company. For further information, see “– Fi-
nancial performance measures.”
To achieve our goal of sustainably enhancing the value of
Siemens and of exploiting the full potential of our integrated
technology company, we have defined three concrete focus
areas along each of the three strategic directions set forth
above, which we aim to address in the years ahead. In the
strategic direction of focusing on innovation-driven growth
markets, our first focus area is to be a pioneer in technology-
driven markets. We intend to concentrate on innovation- and
technology-driven markets that will form the basis of Siemens’
core business in the future, for example, by providing intelli-
gent and sustainable infrastructures for the world’s cities. Our
second focus area is to strengthen our portfolio. We are ac-
tively and systematically managing our portfolio with the
principal aim of achieving or maintaining a no.  or no.  posi-
tion in our current and future markets. To provide a leading
environmental portfolio is our third focus area: Not only does
our Environmental Portfolio enhance our Company ’s revenue,
it also makes a significant contribution to climate protection.
Our revenue target for our Environmental Portfolio is to exceed
€ billion by the end of fiscal .
In the second strategic direction of getting closer to our cus-
tomers, one of our focus areas is to grow in emerging mar-
kets while maintaining our position in our established mar-
kets. We plan to offer more products, solutions and services for
the rapidly growing entry-level segments, which are more
price sensitive and mostly found in emerging markets. As a
consequence, we aim to continuously increase our share of
revenue from emerging markets. A second focus area is to ex-
pand our service business, which is highly diversified and
broadly distributed throughout our Company. We believe that
the large installed base of our products and solutions at our
clients provides promising growth opportunities for our ser-
vice business. Services play a key role in profitability at
Siemens and, in addition, long-term service agreements are