Siemens 2013 Annual Report Download - page 243

253 D. Consolidated Financial Statements
357 E. Additional Information
245 C. Compensation Report, Corporate Governance
statement pursuant to Section a of the
German Commercial Code, Takeover-relevant
information and explanatory report
246 C. Siemens AG ( Discussion on basis of
German Commercial Code)
250 C. Notes and forward-looking statements

opportunities currently considered to entail a higher opportu-
nity exposure. The described opportunities are necessarily not
the only ones we encounter. In addition, our assessment of
opportunities is subject to change as our Company, our mar-
kets and technologies are constantly developing. As a conse-
quence, new opportunities may arise, existing opportunities
may cease to be relevant, or the significance of an opportunity
may change. Generally, opportunities are assessed to the best
of our knowledge, considering certain assumptions, including
market development, market potential of technologies or solu-
tions, and anticipated developments in customer demand or
prices, among other things. When opportunities materialize,
they may have a lower effect than previously estimated on the
basis of the underlying assumptions. It is also possible that
opportunities we see today will never materialize. In our view,
the overall opportunity situation did not change significantly
as compared to the prior year. Two opportunity factors includ-
ed in our prior year reporting (“further growth in the area of
environment and climate protection” and “utilizing cross col-
laboration among our broad portfolio and global presence to
offer more innovative and holistic solutions”) have been incor-
porated into our business plans and are therefore not reported
as an ERM relevant opportunity any more.
Through selective acquisitions, equity investments and
partnerships we constantly strive to strengthen our lead-
ing technology position, open up additional potential mar-
kets or further develop our product portfolio: We constantly
monitor our current and future markets for opportunities for
strategic acquisitions, equity investments or partnerships to
complement organic growth. Such activities could help us to
strengthen our market position in our existing markets, provide
access to new markets or complement our technological port-
folio in selected areas.
We particularly see further opportunities in the growth
potential of established markets and especially of the
emerging markets: It is expected that in coming years emerg-
ing markets will continue to grow significantly faster than in-
dustrialized nations, led by strong growth in the BRIC coun-
tries Brazil, Russia, India and China as well as by growth oppor-
tunities in the second wave emerging markets like Chile, Indo-
nesia, Mexico, Poland or Turkey. Within One Siemens, we want
to take measures aimed at continuously increasing our share
of revenue from emerging markets. We believe that develop-
ing the capability to design, manufacture and sell so-called
SMART (simple, maintenance-friendly, affordable, reliable, and
timely- to-market) products will provide us with opportunities
to gain market share and enhance our local presence in these
strategic growth markets. Adding further SMART products to
our port folio and developing stronger sales channels would
enable us to increase our revenues by serving large and
fast-growing regional markets, where customers may consider
price more strongly than product features when making a pur-
chase decision.
We constantly strive to develop new technologies, new
products and solutions as well as to improve existing ones:
We invest in new technologies that we expect to meet future
demands in accordance with the four strategic megatrends
demographic change, urbanization, climate change and glo-
balization (for further information see C... GLOBAL MEGA-
TRENDS).
Localizing value chain activities in low cost countries
could further improve our cost position: Localizing certain
value chain activities, such as procurement, manufacturing,
maintenance and service in markets such as the BRIC coun-
tries and other emerging markets, as well as the Middle East
could enable us to reduce costs and to strengthen our global
competitive position, in particular compared to competitors
based in countries with a more favorable cost structure.
We are in the process of continuously developing and im-
plementing initiatives to reduce costs, adjust capacities,
improve our processes and streamline our portfolio: In an
intensified competitive market environment, a competitive
cost structure complements the competitive advantage of be-
ing innovative. We believe that further improvements in our
cost position strengthen our global competitive position and
secure our market presence against emerging and incumbent
competitors. For example, we expect to create sustainable val-
ue from productivity measures in the Sectors in connection
with “Siemens ,” as mentioned earlier a company-wide
program supporting our One Siemens framework.
We are realigning our regional organization: As of Novem-
ber, , following the close of fiscal , we disbanded our
Regional Cluster organization. Following this organizational
change, we have designated  Lead Countries which are indi-
vidually responsible for managing a number of other countries
regarding market penetration. Each Lead Country reports di-
rectly to the Managing Board. By implementing this move,
Siemens intends to intensify its customer access and expand
its regional business. We expect that this new setup will fur-
ther enhance our local market penetration going forward.