Siemens 2014 Annual Report Download - page 185

247 D. Consolidated Financial Statements
337 E. Additional Information
213 C. Overall assessment of the economic position
214 C. Subsequent events
215 C. Sustainability and citizenship
225 C. Report on expected developments and
associated material opportunities and risks
242 C. Compensation Report and legal disclosures
242 C. Siemens AG (Discussion on basis
of German Commercial Code)

Offshore wind power: Among renewable sources of energy,
wind power will play a key role over the long term. Offshore
wind turbines deliver high yields and are subject to less fluctu-
ation than other renewables. We want to continue building on
the leading position in offshore wind power that we have cap-
tured in recent years. We consider double-digit market growth
realistic in this field in the medium term.
Distribution grid automation and software: Energy manage-
ment is becoming increasingly vital – for distribution grids as
well as industrial and private energy producers and consumers.
Energy management systems make it possible to integrate in-
creasingly decentralized power supplies into the energy cycle,
while mitigating the negative impact of the fluctuations that
occur when power is generated from renewable sources – thus
improving the utilization of existing power grids. Our intelli-
gent, integrated automation solutions offer customers decisive
added value.
Urban and interurban mobility: In strong demand, intelligent
mobility solutions are providing major impulses for growth –
particularly in the areas of urban transportation and automated
traffic-control solutions. We see stronger growth potential in
this area as well.
Digital-twin software: The virtual and real worlds are merging
more and more. Already today, our software solutions are help-
ing customers develop products much faster, more flexibly and
more efficiently. Not only products but also the plants in which
they are produced have digital twins that can be used to co-
ordinate and integrate product design and production plan-
ning. The digital models are always up-to-date – as planned, as
built, as maintained – while allowing improvements through-
out entire lifecycles.
Key sectors in process industries: Some industry sectors –
oil & gas and food & beverage, for example – are growing at
above-average rates. We want to participate in this growth.
That is why we are bundling our expertise in process industries
and drive technologies and continuing to expand our related
portfolio of products and software solutions.
Image-guided therapy and molecular diagnostics: The in-
creasing use of molecular biological methods and progress in
the life sciences are accelerating technological change in health-
care. To improve quality and efficiency, societies worldwide are
also demanding new solutions for next-generation healthcare.
Business analytics and data-driven services, software and
IT solutions: We have a comprehensive understanding of our
customers’ business processes. In the future, we want to lever-
age this knowledge even better by analyzing the data gener-
ated in these processes, providing recommendations for im-
provement and action, and thus creating value. The resulting
competitive advantages for our customers are increasingly
derived from cloud-based solutions and services powered
by data-analytics software.
c) Governance
We want to lead Siemens in such a way that we focus on our
customers at all times and further expand our market penetra-
tion while maintaining lean and flexible structures. That is why
we have selected a market-integrative setup that combines a
common regional organization with a coordinated vertical
approach. Against this backdrop, we have retailored the struc-
tures and responsibilities of our businesses, our Regions and
our corporate governance functions:
>
We have removed layers from our Company, thus bringing
our businesses closer to customers and key markets. We re-
placed our  Regional Clusters with  Lead Countries. The
CEOs of these countries now report directly to our Managing
Board.
>
We have also eliminated the Sector level and consolidated
our business activities into nine Divisions and one separately
managed unit, Healthcare. This change is increasing our
customer proximity and accelerating our decision-making.
> In addition, we have made governance even more stringent
across all levels of our organization. Our Managing Board
leads the Company and maintains the balance between our
businesses and regions. It is supported by strong, efficient
governance functions, our Corporate Core. This Corporate
Core ensures fast, unbureaucratic decision-making across
key company functions.
d) Management model “One Siemens”
To enable us to manage our Company more effectively, we have
expanded “One Siemens” into an integrated management
model that combines under one roof the overarching targets
and priorities with which we are implementing our strategy
throughout the Company. It encompasses a financial frame-
work, an operating system and Corporate Memory as well as
sustainability and citizenship.
Financial framework
To measure and compare our development against the market
and in our competitive environment, we used a system of
defined key indicators. We have now refined and expanded
this financial target system, which is explained in more detail
in C. FINANCIAL PERFORMANCE SYSTEM.