Strama Final

I.
Company Profile
Company: Siemens
For nearly 100 years, Siemens has been active in the Philippines, where it holds
leading positions in its Industry, Energy and Healthcare Sectors, while Siemens IT
Solutions and Services functions across all three Sectors. In fiscal 2008 (October 1, 2007
– September 30, 2008), sales to customers in the Philippines amounted to EUR 109
million. New orders totaled EUR 89 million. Siemens currently has about 1,200
employees in the country.
Siemens’ businesses are as follows, Automation and Control, Industrial Solutions,
Information Technology Products and Solutions, Medical Solutions, Power Generation,
Siemens IT Solutions and Services and the last is Transportation. The paper will be
focusing more on the Medical Sector.
Automation and Control
Because modern industrial processes have become so complex, a totally
integrated solutions approach is a way to maximize efficiency and ensure the profitability
of our clients in the manufacturing, processing, and construction sectors.
Siemens Corporation Philippines

Strategic Management 1
Information Technology Products and Solutions
Leading banking and financial institutions and retailers in the Philippines continue
to rely on Siemens IT Products and Services (ITPS). Carrying the brand Wincor Nixdorf,
Siemens, Inc. provides these industries with excellent products, which include automated
teller machines (ATM) and Point-of-Sale (POS) systems. Warranty and post warranty
services are also covered by ITPS through our main service arm, ETSI Technologies, Inc.
Siemens IT Solutions and Services
Siemens IT Solutions and Services is an internationally leading provider of IT
solutions and services. It covers the entire IT service chain from a single source, from
consulting to system integration, right through to the management of IT infrastructures.
Transportation
Philippines is known to be as one of the most populated archipelago. As people
increase in the whole world, this fast growing phase poses a tremendous challenge for
mobility in the future. The quality of life and competitiveness of whole regions will
depend upon safe and fast public transportation.
Medical Solutions
Siemens is committed to quality patient health care as a provider of
technologically advanced medical solutions to hospitals and medical clinics throughout
the country. These include highly reliable medical imaging and therapeutic systems that
assist physicians in the early diagnosis and treatment of diseases.

Company History
Siemens was founded by a German entrepreneur named Werner von Siemens way
back 1847. He was an extraordinary inventor, engineer and entrepreneur. In fact, he
invented the first point and electric dynamo that helped put the spin in the 1800’s
industrial revolution. Siemens today is a technology giant in more than 180 countries
including the Philippines. Siemens begin its business in the Philippines with the medical
business under Reigner Company in 1910.
As the years pass by, Siemens began to journey into a lot of work fields such as
energy, industry, communications, information, transportation, healthcare, and other
components that are essential in our everyday lives. Big companies in the said industries
are partnering with Siemens because of their very good performance. MERALCO
partnered with Siemens ordering a power transformer for the Amadeo Stadium. Ayala
Land also is no9w partnering with Siemens in the industry sector, helping them in their
key projects in construction market such as, Glorietta 5, Serendra, The Residences at
Greenbelt 2.
Siemens has a slow start but has a lot of big results nowadays. From venturing
into the Health Sector to its expansion to other industries, Siemens continues to grow and
excel in their business performance.

Siemens Medical Solutions provides various diagnostics solutions that provide
ways to assist in the diagnosis, monitoring, and management of disease worldwide. Its
products include automation solutions and pre analytical components; a family of blood
analyzers for critical care testing; chemistry systems and applications; diabetes care
products and reagents; hematology systems; automated immunoassay platforms to
provide medical information to clinicians; and molecular testing products, including a
line of molecular diagnostics instrumentation and software, as well as assays for
diagnosis and monitoring of HIV and hepatitis.
The company also provides urinalysis product portfolio to laboratory personnel,
clinicians, physicians, and nurses to deliver clinical information for medical conditions
and diseases, such as kidney function, urinary tract infections, carbohydrate metabolism,
and liver function, as well as urine test strips along with the Clinitek family of analyzers.
In addition, Siemens Medical Solutions Diagnostics offers lab consulting services;
RealTime Solutions, a suite of Web based service and support products; and customer
service and support. It serves laboratories, clinicians, and patients.

II. Research Design and Methodology
This paper is entirely based on the availability of primary data. The macro
economic, industry and corporate data were gathered from employee interview, company
fact book, corporate financial statements and the internet. The researcher was able to have
an interview with the Vice President / Financial Controller of the company.
Included in this paper are industry analysis, company analysis, and environmental
analysis. This data’s were presented to determine the strengths, weakness, opportunities
and threats which the company could avoid and exploit in the future. The Internal and
External Analysis was done according to the data’s above. Also, critical success factors
were identified and scored according on how Siemens could react and respond to its
external and internal environment.
The paper also used Porter’s Five Forces of Competition model to analyze the
Health Industry market. The use of Porter model helped analyze the Company’s rivalry
against its competitors, the bargaining power of suppliers and customers, threat of new
entrants in the industry and last is the threat of substitute products.
The Financial Statements that were provided by the company’s VP are dated
2007, the whole year.

III. Vision / Mission Statements
Vision Statement
“To achieve total customer satisfaction through innovative solutions, products and
services.”
”To sustain growth by enhancing local value added competencies”
”To be the preferred employer through an effective people management system“
”A learning organization with dynamic integrated business processes.”
Mission Statement
“We are Siemens.”
”Customer Satisfaction is our aim.”
”We provide best-in-class electrical and electronic engineering
solutions, products and services.”
”We continuously grow our business to ensure sustainable profitability for our
shareholders.”
”We are the preferred employer.”
”We have a strong sense of responsibility towards society and the environment.”

Evaluating the Mission Statement
Components Yes NO
1. Customers •
2. Products or Services •
3. Markets •
4. Technology •
5. Concern for survival and •
growth profitability
6. Philosophy •
7. Self-Concept •
8. Concern for public image •
9. Concern for employees •
Customers- (Who are the firm’s customers?)
Siemens customers are not mentioned in the V/M statements although it was
mentioned that “Customer Satisfaction is our aim”, it’s still unclear. Siemens customers
in the medical sector are large and well known hospitals in the Philippines.
Products- (What are the firm’s major product and services?)
Siemens Medical solutions offers state of the art machines to be used in
Mammography, Ultra Sound, Molecular Imaging and other more.

Markets- (Geographically, where does the firm compete?)
Siemens is a worldwide company. Their emphasis of competition is within the
Philippine market, namely, Luzon, Visayas, Mindanao. Although a worldwide company,
Siemens does not state the kind of market they are in to.
Technology- (Is the firm technologically current?)
Siemens is a leader in producing advanced technology and state of the art medical
equipments.
Concerns for survival, growth, and profitability- (Is the firm committed to growth and
financial soundness)
”We continuously grow our business” The company would conduct its operations
very well to provide the profits, growth which will ensure Siemens’ success in the future.
Philosophy- (What are the firm’s basic values, beliefs, ethical priorities of the firm?)
”A learning organization with dynamic integrated business processes.”
Siemens has a strong sense of responsibility towards society and its environment.
Self-concept- (What is the firm’s major competitive advantage?)
”We provide best-in-class electrical and electronic engineering
solutions, products and services.” As of the moment, Siemens was able to capture large
hospitals in the Philippines to be its primary customers.

Concern for public image- (Is the firm responsive to social, community, and
environmental concerns?)
”We have a strong sense of responsibility towards society and the environment.”
Siemens aims to satisfy its customers and have a sense of responsibility to its
environment.
Concern for employees- (Are employees a valuable asset of the firm?)
”To be the preferred employer through an effective people management system“
Siemens makes sure that its employees would be the best in their respective fields. They
also help motivate their employees and give them rewards for their exceptional abilities.
Recommended Vision Statement
We envision sustainability in growth and customer satisfaction through innovative
solutions. We also envision having you as part of a one big learning organization that has
an effective people management and dynamic integrated business.
Recommended Mission Statement
To provide customer satisfaction through our state of the art innovations, considering that
we also grow our business in an honest and professional manner. To establish good sense
of corporate social responsibility as we expand our business in different industries.

IV. External Analysis
Philippine Economy
With their tropical climate, heavy rainfall, and naturally fertile volcanic soil, the
Philippines have a strong agricultural sector, which employs over a third of the
population. Sugarcane, coconuts, rice, corn, bananas, cassava, pineapples, and mangoes
are the most important crops, and tobacco and coffee are also grown. Carabao (water
buffalo), pigs, chickens, goats, and ducks are widely raised, and there is dairy farming.
Fishing is a common occupation; the Sulu Archipelago is noted for its pearls and mother-
of-pearl.
The islands have one of the world's greatest stands of commercial timber. There
are also mineral resources such as petroleum, nickel, cobalt, silver, gold, copper, zinc,
chromite, and iron ore. Nonmetallic minerals include rock asphalt, gypsum, asbestos,
sulfur, and coal. Limestone, adobe, and marble are quarried.
Manufacturing is concentrated in metropolitan Manila, near the nation's prime
port, but there has been considerable industrial growth on Cebu, Negros, and Mindanao.
Garments, footwear, pharmaceuticals, chemicals, and wood products are manufactured,
and the assembly of electronics and automobiles is important. Other industries include
food processing and petroleum refining. The former U.S. military base at Subic Bay was
redeveloped in the 1990s as a free-trade zone.

The economy has nonetheless remained weak, and many Filipinos have sought
employment overseas; remittances from an estimated 8 million Filipinos abroad are
economically important. Chief exports are semiconductors, electronics, transportation
equipment, clothing, copper, petroleum products, coconut oil, fruits, lumber and
plywood, machinery, and sugar. The main imports are electronic products, mineral fuels,
machinery, transportation equipment, iron and steel, textiles, grains, chemicals, and
plastic. The chief trading partners are the United States, Japan, China, Singapore, Hong
Kong, and Taiwan.
However, the Philippine economy grew at its fastest pace in three decades in 2007
with real GDP growth exceeding 7%, but growth slowed to 4.5% in 2008 as a result of
the world financial crisis. High government spending has contributed to the growth, but a
resilient service sector and large remittances from the millions of Filipinos who work
abroad have played an increasingly important role. Economic growth has averaged 5%
since President MACAPAGAL-ARROYO took office in 2001. Nevertheless, the
Philippines will need still higher, sustained growth to make progress in alleviating
poverty, given its high population growth and unequal distribution of income.
MACAPAGAL-ARROYO averted a fiscal crisis by pushing for new revenue measures
and, until recently, tightening expenditures.

The Philippines GDP composition is composed by three sectors namely,
agriculture (13.8%), industry (31.9%), and services (54.3%). Philippine’s economy is
being dominated by the services sector as estimated last 2008. On the other hand,
according to the info from the government census unemployment rate increased from
6.3% last 2007 to 6.8 this 2008. Unemployment rate in the Philippines was affected by
the Global Crisis. Many Filipinos lost their jobs abroad and return back to the
Philippines.
Year-on-year Inflation Rates, All Items

February Januray Year to date
Philippines
Headline 5.4 4.9 5.1
Core 4.0 3.4 3.7
NCR
AONCR
The year-on-year headline inflation rate in the Philippines moved upward to 5.4
percent in February from 4.9 percent in January as higher rates were registered in all the
commodity groups except in fuel, light and water (FLW). Inflation a year ago was 2.6
percent. Likewise, inflation rate in the National Capital Region (NCR) increased to 4.1
percent in February from 3.9 percent n January.
This was affected by the higher upward adjustments in the annual rates in all the
commodity groups except in FLW. Similarly, except for FLW, higher annual price

increments in all the commodity groups brought annual inflation rate in Areas outside the
National Capital Region (AONCR) to advance to 6.0 percent in February from 5.3
percent in January. Excluding selected food and energy items, core inflation went up to
4.0 percent in February from 3.4 in January.
Economic Analysis
Most experts have been progressively downgrading their growth estimates. The
good factors (the seeming return of at least some foreign investors) are being
overshadowed by the bad (the international economy and continued political concerns).
The government itself has scaled back its growth projections for 2001 due to concerns
about the global economic slowdown and the domestic situation. The Department of
Trade and Industry's (DTI's) growth target for 2001 has fallen to 3.3%-3.8% from an
earlier 3.8%-4.3% projection. When GMA approved the lowered forecast, she said: "It's
because of the realities we're faced with. There is an international downtrend to begin
with, not to mention our own internal problems. We are being realistic." The US
Embassy's Economic Section lowered its forecast for real GDP growth in 2001 from 3.2-
3.9% (February estimate) to 2.7-3.2% (June estimate). Most economists seem to feel that
the country will do well to muster 3% growth this year. At least foreign investors appear
to be coming back into the country (slowly and hopefully surely?). GMA has been
receiving a steady stream of big shot foreign guests, top guys from foreign firms with
Philippine projects either in place or in the works.
Philippine Demographics
Population growth

The Philippines is the world's 12th most populous country, with a population of
88,706,300. Roughly two-thirds reside on the island of Luzon. Manila is the capital and
the eleventh most populous metropolitan area in the world. The literacy rate was 96% in
2008, and about equal for males and females. Literacy rate decreased from 96.2% (2003)
to 96% as of present. Life expectancy is 69.91 years, with 72.28 years for females and
66.44 years for males. Population growth per year is about 1.92%, with 26.3 births per
1,000 people. Population growth rate in 1995-2000 is 3.21% but then dramatically fell to
1.59% for 2005-2010. Poverty in the Philippines increased as population increases,
studies shows as of march 2008 poverty percentage is 32.9%.
Languages
More than 170 languages are spoken in the country, almost all of them belonging
to the Borneo-Philippines group of Malayo-Polynesian language branch of the
Austronesian language family. According to the 1987 Constitution, Filipino, heavily
based on Tagalog, and English are both the official languages. The twelve major regional
dialects are the auxiliary official dialects of their respective regions, each with over one
million speakers: Tagalog, Cebuano, Ilocano, Hiligaynon, Waray-Waray, Bikol,
Kapampangan, Pangasinan. Kinaray-a, Maranao, Maguindanao and Tausug.
English is used by some Filipinos as their first language, particularly those
belonging to the upper echelons of society.

The use of Spanish in the Philippines was the original official language of the
country for more than three centuries, but was used mainly by the educated illustrados
(including José Rizal) or self taught natives and the Spanish authorities. Spanish was the
language of Philippine Revolution, and the 1899 Malolos Constitution proclaimed it as
the official language. Following the American occupation of the Philippines, its use
declined, especially after 1940. Currently, only a few Spanish Mestizo families speak it as
their first language, though many others use it together with Tagalog and English.
Both Spanish and Arabic are used as auxiliary languages in the Philippines. The
use of Arabic is prevalent among the Filipino Muslims. It is taught in madrasah (Muslim)
schools.
Religion
Religion in the Philippines holds a central place in the life of most Filipinos,
including Catholics, Muslims, Buddhists, Protestants, and animists. It is central not as an
abstract belief system, but rather as a host of experiences, rituals, ceremonies, and
adjurations that provide continuity in life, cohesion in the community, and moral purpose
for existence. Religious associations are part of the system of kinship ties, patron-client
bonds, and other linkages outside the nuclear family.
Christianity and Islam have been superimposed on ancient traditions and
acculturated. The unique religious blends that have resulted, when combined with the
strong personal faith of Filipinos, have given rise to numerous and diverse revivalist
movements. Generally characterized by antimodern bias, supernaturalism, and
authoritarianism in the person of a charismatic messiah figure, these movements have

attracted thousands of Filipinos, especially in areas like Mindanao, which have been
subjected to extreme pressure of change over a short period of time. Many have been
swept up in these movements, out of a renewed sense of fraternity and community. Like
the highly visible examples of flagellation and reenacted crucifixion in the Philippines,
these movements may seem to have little in common with organized Christianity or
Islam. But in the intensely personalistic Philippine religious context, they have not been
aberrations so much as extreme examples of how religion retains its central role in
society.
In general, the spiritual and economic leadership in many pre-colonial Filipino
ethnic groups was provided by women, as opposed to the political and military leadership
according to men. Spanish occupiers during the 16th century arrived in the Philippines
noting about warrior priestesses leading tribal spiritual affairs. Many were condemned as
pagan heretics. Although suppressed, these matriarchal tendencies run deep in Filipino
society and can still be seen in the strong leadership roles modern Filipino women are
assuming in business, politics, academia, arts and in religious institutions.
Folk religion remains a deep source of comfort, belief and cultural pride among
many Filipin Nominally animists constitute about one percent of the population. But
animism's influence pervade daily life and practice of the colonial religions that took root
in the Philippines. Elements of folk belief melded with Christian and Islamic practices to
give a unique perspective on these religions.
Culture and Education

The culture of the Philippines reflects the complexity of the history of the
Philippines through the blending of cultures of diverse indigenous civilizations, and
foreign influences.
Spanish colonization of the Philippines, governed from Spain and Mexico, lasted
for over three centuries thus, there is a significant amount of Spanish-Mexican influence
in many facets of Philippine custom and tradition. Hispanic influences are most visible in
Philippine folk music, folk dance, language, food, art, and religion.
Pre-Hispanic indigenous Philippine culture had similar cultural influences from
Malaysia, Indonesia and throughout Southeast Asia, particularly the Srivijaya Empire and
the Majapahit Empire. Philippine Mythology, like Asian mythologies, has been
influenced by Islamic, Hinduism and Buddhism.
The Philippines were a territory of the United States from 1898 until 1946.
American influences are evident in the use of the English language, and in contemporary
pop culture, such as fast-food, music, movies, and basketball.
The Chinese have been settling in the Philippine Islands since pre-colonial times,
and their influence is evident in the popularity of gambling games such mahjong, jueteng
and other Asian cuisine.
Various Muslim Filipinos living in the southern Philippine Islands also celebrate
their own customs and traditions, such as concepts of local law (Agamat), and personal
honor (Maratabat), which are related to both Islamic, and native concepts. The martial art
of Kali emerged from the island of Mindanao.

The Kulintang gong-chime ensemble, which is still played by various groups in
the south, is a celebrated icon of surviving ancient Philippine culture. Kulintang has a
history that dates back hundreds of years before the Spanish period, and shares concepts
with other court and folk gong ensembles in Southeast Asia, such as Gamelan.
The Philippines is a multi-ethnic society. The nation is divided between
Christians, Muslims, and other religio-ethno-linguistic groups; between urban, and rural
people; between high-land, and low-land people; and between the rich, and poor.
Although different from one another in many ways, Filipinos across all of these culture
groups are generally hospitable and will give appropriate respect to anyone regardless of
race, culture or belief.
Education in the Philippines has similar features to that of the United States.
Filipino children enter public school at about age four, starting from Nursery up to
Kindergarten. At about seven years of age, children enter a primary school (6 to 7 years).
This is followed by secondary school (4 years). Students then sit for the College Entrance
Examinations (CEE), after which they enter collegiate school (3 to 5 years). Other types
of schools do exist, such as Private schools, Preparatory schools, International schools,
Laboratory High Schools and Science High Schools. Also, several nationalities, such as
the Chinese, British, Americans, and the Japanese also have their own schools.
The school year in the Philippines starts in June of one year and ends in March of
the next, with a two-month summer break for April and May, one week of semestral
break (the last week of October), and a week or two of Christmas break.

In 2005, the Philippines spent only about US$138 per pupil compared to
US$1,582 in Singapore, US$3,728 in Japan, and US$852 in Thailand.
Primary school is also called Elementary school. It consists of six levels, with
some schools adding an additional level (level 7). The levels are grouped into two
primary subdivisions, Primary-level, which includes the first three levels, and
Intermediate-level, which includes the last three levels.
Primary education in the Philippines covers a wide curriculum. The core subjects
(major subjects) include Mathematics, Sciences, English, Filipino (the Filipino language),
and Makabayan (Social Studies, Livelihood Education, Values). Other subjects include
Music, Arts, and Physical Education. Starting at the third level, Science becomes an
integral part of the core subjects. On December 2007, Philippine president Gloria
Macapagal Arroyo announced that Spanish is to make a return as a mandatory subject in
all Filipino schools starting in 2008. In private schools, the subjects include Mathematics,
English, Science, Social Studies, Basic Computer, Filipino, Music, Arts and Technology,
Home Economics, Health, Physical Education, and in Catholic schools, Religion or
Christian Living. International schools and Chinese schools have additional subjects,
especially in their language and culture.
The teaching medium in the vast majority of all local schools is English. Filipino
is considered only as a second language, and is used only in the Makabayan, and Filipino
subjects. Outside of Manila, other languages such as Cebuano, Bicolano, and Waray, are
also used in the teaching of Makabayan. International schools generally use English in all
subjects. Chinese schools add two language subjects, such as Min Nan Chinese and

Mandarin Chinese. A few private schools mainly catering to the elite include Spanish in
their curriculum. Meanwhile, Arabic is used in Islamic schools. All primary-level
students generally graduate with a knowledge of two or three languages.
Primary students traditionally sit for the National Elementary Achievement Test
(NEAT) administered by the Department of Education, Culture and Sports (DECS). It
was intended as a measure of a school's competence, and not as a predictor of student
aptitude or success in Secondary school. Hence, the scores obtained by the student in the
NEAT is not used as a basis in his or her admission into Secondary school. During 2004,
when DECS was officially converted into the Department of Education (DepEd), and
also, as a result of some reorganization, the NEAT was abolished. As of 2006, only
private schools have entrance examinations for Secondary school.
The National Elementary Achievement Test (NEAT) was changed to National
Achievement Test (NAT) by the Department of Education (DepEd). Both the public and
private elementary schools take this exam to measure a school's competency.
Technological Environment
As notified by the Department of Health (DOH), almost 200,000 patients’ inflow
was recorded in 2006-2007 for medical treatment in the country. These patients who
came for health treatment were mostly expatriates, foreigners and Filipino living in other

countries. The patients were from Guam, the US, Marshall Islands, Saipan, Canada,
China, Korea and Japan.
The investment in advanced medical technology is showing results to country in
terms of increased medical revenue and foreign reserves earned by medical care
treatment organizations of the country. The country boasts of major hospitals in
metropolitan Manila like St. Luke's Medical Center, Transplant Institute, Asian Hospital,
National Kidney, Philippine Children's Medical Center and East Avenue Medical Center.
All these medical centers are affiliated with the plan making the country evolving health
care hub with high potential for tourists.
Experts say that the Philippines satisfy all the criteria to emerge as a destination
for foreign medical tourists. The DOH expects that local health industry is aiming to
touch $1 Billion as income from the industry by 2012, as reported by inquirer newspaper.
However, even though the Philippines is booming in the health industry, loss of engineers
who are qualified for advance medical technology is increasing.
Political Environment
Health and Medical sector plays an important part in the political environment in
the Philippines. Many politicians use the health sector in many ways to be an incentive to

those who will continue to support them. Just like in the past elections, many politicians
gave health cards such as, Philhealth, Caritas and etc. This makes the health and medical
sector very important for politicians. They need to tie up with a lot of hospitals, insurance
companies, for them not to have a hard time in giving out health incentives to people.
Legal Environment
The Health Sector industry is guided by Republic Act No. 7875, an act instituting
a national health insurance program for all Filipinos and establishing the Philippine
health insurance corporation for the purpose. This Act shall be known as the "National
Health Insurance Act of 1995. Section 11, Article XIII of the 1987 Constitution of the
Republic of the Philippines declares that the State shall adopt an integrated and
comprehensive approach to health development which shall endeavor to make essential
goods, health and other social services available to all the people at affordable cost.
Priority for the needs of the underprivileged, sick, elderly, disabled, women, and children
shall be recognized. Likewise, it shall be the policy of the State to provide free medical
care to paupers.
Governmental Environment
The Philippines has introduced controversial tax changes in an effort to pay off
large government debts. The president, Gloria Macapagal Arroyo (GMA), has approved a

law to increase corporate income tax to 35 per cent from 32 per cent. Value Added tax
also is raised to 10% to 12% last 2006. Global crisis is now felt in the Philippines,
recently GMA acted on the problem by calling all the mayors to join hands in dealing
with the present global economic crisis that has spread and jeopardized the well being of
people across the globe.
“It is a crisis for 2/3 of the world and we are not one of the 2/3 yet, so we must
join altogether to prevent the global crisis from becoming a Filipino crisis,” the President
said.
In partnership with local government units, the President said the government has
been able to invest unprecedented amount in education, health care, infrastructure and
other social services.
“Building the edifice of a strong republic is the responsibility of all levels of the
government," the President said as she thanked the city mayors “for taking the lead for
economic stewardship very seriously."
“You make the jobs of the national government easier because you take also much
what has to be done for economic reforms,” she said.
Finally, the President called on the local executives to continuously pursue the
goal of having the Philippines on the verge of the first world in 20 years
Industry Analysis
Health Industry

The growth of medical tourism in the Philippines offers many good opportunities
for U.S. sellers of medical equipment and instruments. An increasing number of people
from all over the world travel to other countries, not only as tourists who go sightseeing
and shopping, but also as patients who want to receive affordable, quality medical, dental,
and surgical services from hospitals and other health institutions overseas. The
Philippines is cashing in on this trend by developing its healthcare services for overseas
patients.
Medical tourism is a fast growing industry in the ASEAN region and many
countries are actively promoting it. The Philippines is now ranked fifth in medical
tourism revenues in Asia, behind Thailand, India, Malaysia, and Singapore, according to
the Philippine Medical Tourism Program (PMTP) office. Government agencies involved
in health and tourism have collaborated to transform the Philippines into one of the most
popular health and wellness havens in the world. The high costs of healthcare in
industrialized countries, the improved medical standards in foreign countries, and the
lower costs of air travel gave birth to a new healthcare program and tourism campaign in
the Philippines in the form of medical tourism.
Lower overhead costs and professional fees make it possible for surgeons to
perform surgeries at a fraction of the cost of the same procedures carried out in the
United States, the United Kingdom, in Europe, or Japan, without sacrificing the quality of
care. The players in the industry are gung-ho about the possibilities and the potential of
this new healthcare trend.

Among the services that the country offers to foreigners are executive health
packages and elective procedures such as cosmetic surgery, liposuction, and dental
surgery, and life-saving procedures such as coronary bypass surgery, kidney transplants
and cancer treatment. To carry out these procedures, medical tourism program managers
disclose the need to keep hospitals and medical equipment up-to-date.
Market Demand and Data
Recently, people viewed Third World countries and their hospital facilities as
inferior imitations of amenities in developed countries. Western expatriates as well as
wealthy Third World citizens would fly to the United States or Europe for surgical
procedures or even for simple and routine medical check ups, exhibiting little confidence
in local hospitals and doctors.
In recent years, however, healthcare costs have soared in developed countries,
including the United States. Americans, as well as British, Canadians, and Australians
began looking for ways to reduce healthcare expenses. Certain services and procedures
are now being contracted out to Third World countries, from transcriptions of medical
records to X-ray readings.
With medical tourism, a patient’s doctor (or hospital) may refer him to a partner
hospital in countries like Thailand, Singapore, or the Philippines, on executive packages
that offer all kinds of health and wellness services, besides medical treatment. Health and
wellness refers to mainstream or traditional medicine, as well as alternative medicine

therapies. With a consideration for potential earnings from returning Philippine residents,
expats and tourists, the Philippine Medical Tourism Program was conceptualized in 2004
through an Executive Order (372). The program was officially launched on November
20, 2006.
In the Philippine Medical Tourism Program (PMTP), a foreign patient
automatically receives a full-scale work-up, which may include MRI, CT scan, X-rays
and a battery of laboratory tests. While awaiting further treatment, he may either be
confined in a suite or a deluxe private room, as the majority of accredited hospitals
participating in the program have upgraded their facilities, developed their specialty
departments, and hired marketing consultants to promote their hospital’s specialty
services.
Government officials and advocates of Medical Tourism in the Philippines think
there is good potential for the program here noting that some local medical facilities and
many health professionals can match standards in the United States and in Europe.
Philippine curricula for medical and nursing schools are patterned after the United States.
The U.S., after all, introduced healthcare and sanitation in the country during the
American occupation of the Philippines. Besides the school curricula, the U.S. also
established the first modern hospital system in the Philippine General Hospital (PGH).
Despite some changes and adaptations in the curricula and in the practice of the
medical profession, Philippine healthcare is, essentially, the result of many years of

American and other western influence. To this day, many Filipino doctors complete their
internship and residency in the United States, and come home to practice in the
Philippines, adding an American Fellowship in their list of credentials. In fact, due to
strict measures in the hiring process of medical and nursing professionals for employment
abroad, the medical and nursing curricula have become tougher than many training
institutions in the Southeast Asian region.
The government hopes that the lure of medical tourism would convince more
Filipino health professionals to stay and practice in the country rather than work and
migrate elsewhere.
Foreign patients often seek cosmetic procedures like blepharoplasty to widen the
contours of almond eyes (this procedure costs as much as $10,000 in South Korea and in
Japan, but only around $3,000 in the Philippines); liposuction; nose and face lift; and
lasik surgery, a high-end corrective procedure on the cornea. Lasik is only around $1,200
in the Philippines, half its average cost abroad.
Life-threatening cases such as a coronary artery bypass graft orkidney and bone
marrow transplants are also offered in premier medial institutions like the UST Hospital,
St. Luke’s, or Makati Medical Center. A heart bypass is about $10,000 locally or half the
price found abroad. A kidney transplant is also less costly at $60,000.
The Philippine Department of Health is optimistic about the industry and its
potential for being a dollar earner for the country. At the same time, the program could

help stem the brain drain in the Philippines, which is often the source of doctors and
nurses for developed countries.
In order to be competitive, Philippine hospitals upgrade facilities and install more
efficient, more modern equipment. Among the medical specialty services now offered in
the country’s leading medical institutions are in cardiovascular (coronary artery bypass
graft, angiogram), nephrology (dialysis, transplant), ophthalmology (retinal buckling,
glaucoma, intra ocular foreign body, focal laser, pan retinal photocoagulation),
orthopedics (joint replacement), laparoscopic surgery, and in plastic/reconstructive
surgery (facelift, blepharoplasty, lipectomy, mammoplasty, rhinoplasty, liposuction, hair
transplant, botox, etc.)
Medical tourism is now a source of foreign income that has been recently tapped
by the Philippines. An estimated $3 trillion is being spent on health care every year
throughout the world. The country has many things going for it in promoting the Medical
Tourism Program. Although few, its hospitals like St. Luke's Medical Center, Makati
Medical Center, Asian Hospital, Medical City and Metropolitan Hospital are considered
world-class in terms of service and facilities, other medical facilities like the government-
run Philippine Heart Center, the Lung Center, and the National Kidney and Transplant
Institute need only some minor upgrading to be brought up to international standards.
The Philippines has thousands of first-rate doctors, nurses and other health care
professionals who are known in the world as sincere anfd caring practitioners. Morover,
many Filipinos are fluent in speaking English language, some are even multi-lingual and

a very fast learner of other languages. Medical tourists will have no problem
communicating with their Filipino doctors, nurses and caregivers.
The Philippines has more to offer in terms of medical treatment than tourism at
this point, not that the country has no attractions to offer. The country has countless
untapped nature spots and beautiful tourist destinations; the problem is that it has a long
way to go in terms of infrastructure. It would be difficult to compete with neighboring
countries whose airports, roads, and logistics are more modern, efficient, and organized.
Successful medical tourism in the Philippines will not only mean increased dollar
revenues for the country but also additional financing for upgrading hospital equipment
and facilities and for training of healthcare professionals. It would also make it possible
for hospitals to pay doctors, nurses and other health workers higher salaries, thereby
stopping or reversing the brain drain. On top of its aggressive campaign, the country’s
enforcement of stricter licensure to hospitals and healthcare professionals is aimed at
assuring potential foreign clients of the quality of the healthcare that they will be
receiving from the hospitals and the competency and legitimacy of doctors and nurses
who will treat them.
Market Issues and Obstacles
The Medical Tourism Program of the Philippines is a joint project of the
Department of Health (DOH), the Department of Tourism (DOT), and the Department of
Trade and Industry (DTI). The Department of Tourism is responsible for marketing the

program while the Department of Trade & Industry coordinates with local hotel and
restaurant establishments and shopping centers. On the other hand, the Department of
Health is the government agency in the Philippines that is responsible for all issues
pertaining to healthcare -- accreditation of hospitals, laboratory facilities, and health
workers; and registration of medical, nutritional, and pharmaceutical products.
The responsibility for registering medical, nutritional, and pharmaceutical
products is with the Bureau of Food and Drugs (BFAD) under the Department of Health
(DOH), as all foreign medical devices require local registration, regardless of whether
they have been previously registered in other countries. A separate Bureau of Health
Devices and Technology or BHDT (also under the Department of Health), which will
eventually handle the responsibility for medical devices, is currently responsible only for
radiation-emitting medical equipment. BHDT issues a pre-registration certification for
radiation-emitting devices.
Competitor Analysis
GE (General Electric)
GE started in the Philippines in the field of electric industry. GE’s predecessor
back then was Thomson-Houston Electric Company; they were the first one to install
street lights in Metro Manila. Since then, GE steadily increased their commitment to the
Philippines then started to venture out to other industries in the market. Although GE is
known throughout the world as an electrical company or light bulb company, GE

expanded its product range and began tapping the health and medical industry of the
Philippines. GE healthcare supplies private and public hospitals with cutting-edge
diagnostic equipments and healthcare information systems.
GE Healthcare provides transformational medical technologies and services that
are shaping a new age of patient care. Our expertise in medical imaging and information
technologies, medical diagnostics, patient monitoring systems, performance
improvement, drug discovery, and biopharmaceutical manufacturing technologies is
helping clinicians around the world re-imagine new ways to predict, diagnose, inform,
treat and monitor disease, so patients can live their lives to the fullest.
GE’s market share is about 30% in the health and medical sector of the
Philippines. Its market share is lower compare to its pioneer power generation industry.
In the year 2007, GE healthcare increases its sales by lowering down the prices of their
advance medical equipments. GE healthcare sales increase to about 40% compared to its
sales on 2006. Aside from increasing sales, GE also expanded and started acquiring
hospitals to be their customers’ in advance medical equipments. There are lots of factors
that helped GE increase their sales, even though GE healthcare is not that known to the
public the brand name itself helped the company to rise up. Another factor that triggered
the rise of GE is its advertising. GE became common in the Philippines because of its
Thomas Edison commercial and other commercial promotions. GE is also known for its
product quality. However, GE felt the stiff competition given by Philips and Siemens who
are main competitors in the said industry.

Philips
Same like GE, Philips started in the Philippines in the field of electric industry.
Philip’s partnership with the Filipino people dates back to 1920 when it first established
its business of selling lighting products and radio sets in the local market.
In 1956, inspired by the growing economy, Philips established its corporate
presence in the country with the opening of Philips Electronics and Lighting Inc. at the
Trade and Commerce building in Binondo, Manila. Spurred by the desire to cover almost
every facet of Filipino life, Philips began diversifying its product range. Philips Medical
Systems Philippines (PMSP) was born due to their product diversification. Philips
Medical System is a global provider of innovative healthcare solutions, designed to
address the needs of patients as well as healthcare professionals, with a particular focus
on diagnostic imaging, cardiology, oncology and critical cure.
In 2007, Philips engaged around the areas of medical technology business like,
imaging systems, ultrasound, healthcare informatics and clinical services. Products and
services are sold to healthcare providers around the world, including academic, clinics,
physicians and customer retailers.
Starting from 5% market share in the healthcare and medical industry of the
Philippines, Philips managed to continuously go up to 15% in 2006 then 20% in the year

2007. The continuous rise of Philips in the health and medical industry is a result of
improve service satisfaction. Service satisfaction continues to be a focal area for Philips.
Serviceability features that allow quick problem resolution have been designed-in all
product lines using a new standardized process. The process yielded a 30% improvement
in serviceability features over the last three product release.
Also another factor is, Philips investing significantly to improve their patient-and-
provider focus through products that address the care cycle and better communication
from their customer facing employees. Those actions done by Philips are intended to
increase the bond of trust they have their customers. Philips also implemented customer-
loyalty programs to better understand how their products and services are viewed within
the marketplace. Philips, as of the moment, continues to strive in the stiff competition
given by its competitors.
Porter’s Five Forces Of Competition

5 forces of Low Moderate high
competition
Competitor •
Threat of new entrant •
Development of •
substitute products
Bargaining power of •
customers
Bargaining power of 
suppliers
A. Threat of New Entrants
The Threat of new entrants in the health and medical sector industry is moderate
especially in providing new and advance medical systems and solutions. The new comers
if ever there are some, they must have big investments on capital in order to be
competitive. Advertisements can be a tool to be competitive but it’s not that important in
this kind of industry. One factor of Siemens is that they are the pioneer in the said
industry. The quality of products Siemens is delivering is all above average. New players
must also understand the health and medical markets. If new players plan to venture in
the said industry they must look or introduce an innovation to capture the customers
presence and for them to be easily known in the market.
B. Rivalry among competing firms
The rivalry among competing firms is high, for the reason that the company’s
competitors are capable of adjusting in the innovations of technology. The competitors

are also old players in the health and medical sector of industry. Siemens is a pioneer in
this industry and has a slight advantage because most of its customers are well known
hospitals in the Philippines. The only thing that brings threat to Siemens is the low
pricing of competitors.
Siemens top competitors are G.E. and Philips. G.E. is a well known company
especially in electronics. G.E. also is a top company in the world. Not only that, GE has a
very established brand name because of its founder Sir Thomas Edison. Brand name is a
very important ingredient of being competitive. The next top competitor is Philips.
Philips' partnership with the Filipino people started in the 1920’s when it first established
its business of selling lighting products and short wave radio sets in the local market. In
1956, spurred by the growing economy, Philips established its corporate presence in the
country with the opening of Philips Electronics and Lighting, Inc. at the Trade and
Commerce Bldg. in Binondo, Manila which happened to be the premier business center
during that era.
Even though there is a very close competition among rival firms, Siemens
continues to be stable and confident in the Health and Medical Industry.
C. Development of Substitute Products
Development of new products as substitutes was marked low in the chart.
Substitutes are not a big threat to the company. Health and medical industry requires a lot
of innovations and fast technology. There are no particular substitutes for products such

as magnetic resonance, nuclear medicine, and etc. if there were some it is very hard for
them to compete in this kind of industry.
D. Bargaining power of customers
Because of very close competition between Siemens and its competitors,
bargaining power of customers is a big factor. The company should watch closely how a
customer reacts to price changes from other competitors. Hospitals nationwide are the
target customers of the company and its competitors. As of the moment, the said
company still leads the competition gaining top hospitals as their customers.
E. Bargaining power of suppliers
Bargaining power of suppliers is marked low because Siemens has its own supply
from the Siemens AG in Germany. Siemens, according to their Vice President in the
Philippines, are manufacturing what they sell. They also provide the materials for their
manufactured products.
Critical success factors Weight Rating Weighted

score
Opportunities
1. Hospitals nowadays needs advance medical 0.14 4 0.56
equipments.

2. Untapped Markets 0.15 3 0.45
3. Health Industry is a booming economic 0.10 3 0.18
industry.
4. Government supporting health sector reform 0.07 2 0.14

agenda. (Government is now in search for
suppliers of advance medical equipments.)
Threats
5. Growing population of poor people in the 0.09 3 0.21
country.
6. Shortage of qualified engineers 0.11 3 0.26
7. Low pricing of competitors 0.13 4 0.40
8. Perceptions of the Philippines being unsafe and 0.9 3 0.21
unstable.
9. Global Financial Crisis 0.12 3 0.26

TOTAL 1.00 3.07
External Factor Evaluation (EFE matrix)
1= major weakness, 2= minor weakness, 3= minor strength, 4= major strength
External Factor Evaluation or the EFE shows that Siemens is able or is in the
position to face the challenges brought by the threats listed in the matrix. It also shows
the opportunities that can be converted to a competitive advantage in the future. The
highest marked opportunity was the need of hospitals of advance medical solutions; the
said opportunity is exact with what Siemens offer in its medical solutions. The lowest
marked opportunity is the government supporting health sector reform. Government is
just starting to support the health sector recently.
Competitive Profile Matrix (CPM)
Siemens GE Philips

Critical Success Factors Weight Rating Score Rating Score Rating Score
Advertising 0.10 1 0.10 3 0.30 2 0.20
Market Share 0.10 3 0.30 2 0.20 2 0.30
Product Quality 0.30 4 1.20 4 1.20 3 0.90
Price Competitiveness 0.30 4 1.20 3 0.90 2 0.60
Customer Loyalty 0.20 4 0.80 3 0.60 3 0.60
Total 1.00 3.60 3.20 2.60
The following factors such as advertising, market share, product quality, price
competitiveness, customer loyalty are critical factors that affect the company in relation
to its competitors. Siemens is not into a lot of advertisements that’s why it was marked as
major weakness. When it comes to market share, Siemens capture almost 60% of the
health and medical sector market. Product quality is a major strength for the company it
has a very good quality the same as to its competitors. Price competitiveness is a minor
strength, compared to its competitors Siemens price is quite high in the market. Customer
loyalty is a major strength for Siemens. Top hospitals in the Philippines are Siemens
customers.
V. Company Analysis
A. Management
One of the most important factors which provides for any organization's success is
its work force. Siemens believes that each employee, regardless of rank and functions,
directly contributes to our organization's growth and stability. That is why they are

carefully looking for the right person for the right job. The Company’s objectives and
goals are measurable and well communicated to the people; they focus on their products
as well as they focus on their employees. All managers makes their plan effectively, every
manager make sure that their decision was not just based in only one person. They all
have very good communication; they rely on each other on making decisions. The morale
of the employees working on the company is high; the management team makes sure that
the employees are well trained in terms of culture and values. This is to ensure that the
employees’ treatment to the customers and to their co-employees is good. A consumer is
always looking for the good service and treatment of the employees. The Management is
also giving incentives or reward for those employees done a good work at the end of a
project or assignment.
B. Marketing
Healthcare represents a vital business activity of siemens. Siemens Medical
Solutions is today’s largest and most diversified manufacturer and supplier of medical
electronics, familiar with the process of healthcare around the globe. Customers range
from private practice physicians and hospitals to leading university medical schools.
They are professionally supported by expert advisors, a skilled service organization, and
a responsive delivery network for spare parts. Siemens cover the entire spectrum of
diagnostic imaging technologies, leading clinical networking; provide systems for
therapeutic procedures and for electro medicine and have extended product lines for
hearing instruments.

Selling
Siemens attracted hospitals around NCR to acquire their products. The Company
used their being a pioneer and invested their products on top hospitals in the Philippines.
They created relationships with top hospitals in order for the customers to be more loyal.
As of the moment, the Sales Team of Siemens continues to expand its market with the
other regions of the Philippines.
Product
Siemens has products for the following applications: therapy, general X-ray,
oncology care systems, mammography, shock wave lithotripsy, angiography,
interventional procedures, audiology, ultrasound, computed tomography, magnetic
resonance, nuclear medicine, hearing instruments, image processing and networking,
patient monitoring, respiratory care, servo-anesthesia, telemetry, electro cardiology,
intracardial measurement.
Pricing
Siemens pricing is very strategic. Collect, analyze and evaluate data on products,
costs, and markets to support development and present of appropriate price and bid
strategy. Maintain strong price levels while meeting company wide sales quota
objectives. Deliver profitable sales growth by driving local, regional and national

account initiatives, and extensive end user/segment penetration. Evaluate pricing
opportunities and assess where pricing can be increased by market, segment and/or
product.
Distribution
Siemens ties up with top hospitals for selling and distribution of products.
Siemens starts to build up strategic centers for easy product distribution.
Siemens marketing is different with its competitors. Siemens captured 50% of its
market by making top hospitals in the country as their customers. Siemens customers are
the following hospitals, St. Lukes, Manila Doctors, Medical City, Makati Medical, Asian
Hospital, Philippine General Hospital, Medical and a lot more. In addition to that,
Siemens also started as a pioneer in the said industry. On the other hand, due to stiff
competition, major competitors of the company tend to lower there prices and make it
cheaper and affordable for the customers.
C. Finance / Accounting
Liquidity Ratio How Calculated Solution Total

Current Ratio Current 1,566,052,385/ =1.46%
Assets/Current 1,366,811,135
Liabilities

Quick Ratio Current Assets 1,566,052,385- =0.98%
Less 214,198,931/
Inventory/Current 1,366,811,135
Liabilities
Activity Ratio
Fixed Assets Sales/ 2,569,894,466/ =1.30%
Turnover Total Assets 1,976,058,789
Profitability Ratio
Gross Profit Sales Less 2,569,894,466- =0.38%
Margin COGS/Sales 1,592,664,826/2,569
,894,466
Operating Profit Earnings Before 977,229,640/2,569,8 =0.38%
Margin Interest and taxes/ 94,466
Sales
Net Profit Margin Net Income/ 389,782,720/2,569,8 =0.15%
Sales 94,466
Return on total Net Income/Total 389,782,720/1,976,0 =0.19%

assets (ROA) Assets 58,789
Return on Net Income/Total 389,782,720/1,976,0 =0.19%

Stockholders’ Stockholders’ 58,789
Equity (ROE) Equity
Earnings per Share Net 389,782,720/94,998, =4.10%
(EPS) Income/Number of 000
shares of common
stock outstanding
Price-Earnings Market Price per 1000/1410.56 =0.71%
Ratio Share/Earnings per
Share
Growth Ratios 2007 2006 Difference

Sales / Revenues Php. 2,569,894,466 Php. 1,954,265,009 Php. 615,629,457
31.5% ↑
Net Income 123,074,689.5 84,688,235.1 Php. 38,386,454.4

45% ↑

Earnings per Share 4.10% 1.26% 2.84% ↑
Dividends per Php. 1410.56 Php. 1042.12 Php. 368.44 ↑

Share
↑ = Increase
The table above shows that Siemens Company has grown to about 31.5% or 32%
in sales and in net income from the year 2006 to 2007. Compared to its competitors,
Siemens was able to dominate the health and medical industry in 2006 & 2007. Siemens
went up from 30%-50%, in terms of market share this year. Siemens’ increase is due to
acquiring some hospitals not only in NCR but also in the Mindanao region. Siemens,
once again, was the first company to introduce medical innovation in the Southern Part of
the Philippines.
D. Production and Operation
Siemens has its own supplier of materials in Germany. Siemens is not engaged in
any suppliers in the Philippines. Their supplies came mainly from Siemens AG in
Germany. The supplies of materials are regularly monitored by Siemens Philippines and
Siemens AG. The company observes on time delivery of supply materials so that no
problems can interfere. Siemens uses the just-in-time process in their production. Modern
industrial processes have become so complex, a totally integrated solutions approach is a
way to maximize efficiency and ensure the profitability of our clients in the
manufacturing, processing, and construction sectors. The company makes sure that
customers are able to streamline and optimize their operations by providing totally

integrated, innovative and resourceful industrial solutions for every aspect of the
manufacturing process.
E. Research and Development
Research and Development is an important part of a company. In these
department innovations, new products, ideas are born, tested and implemented before it
goes out for manufacturing and selling in the market. Siemens has a very good research
and development department. Siemens generates an astonishing 38 inventions and 23
patent applications around the world every workday and our investments in R & D are
the prerequisite for successful innovation and sustainable business success. Siemens’
innovations lead to new applications and help our customers introduce products that are
more efficient to the market, opening up more business areas and reducing costs.
The foundation of this innovative culture was laid in the past. Siemens was
founded in Berlin by Werner von Siemens in 1847. An extraordinary inventor, engineer
and entrepreneur, Werner von Siemens helped spin industrial revolution. From the
world's first pointer telegraph and electric dynamo to the development of the first cardio
pace maker, few companies have done as much as Siemens to shape our world.
The global challenges facing society, our customers and shareholders today
require innovative R&D. Siemens is committed to innovative R&D. The company aspires
to 'shape the future' by developing technologies with a high-growth potential, recognizing
technological breakthroughs, identifying customer needs, and creating new business

opportunities, products and solutions. The company accurately identifies promising
prospective trends and needs well in advance, enabling us to lead the way and indeed
shape the future.
All Siemens technology based solutions are reviewed for their possible safety
hazards to our customers and end users prior to introduction to the market. New
solutions are developed in accordance with Siemens environmental policies and are
designed for long service life, ease of disassembly and recyclability.
Internal Factor Evaluation (IFE Matrix)

Critical success factors Weight Rating Weighted
score
Strengths
1. Siemens customers are prominent hospitals in 0.20 4 0.80
the Philippines.
2. Siemens is a market leader in the health 0.10 3 0.30

industry.
3. Pioneer among competitors in the health sector 0.073 3 0.219
area.
4. Maintenance coverage of new installed base 0.074 3 0.222
5. First to gain orders of CT systems from 0.070 4 0.28
different places in Mindanao.
6. Siemens med tech is going international. 0.15 4 0.60
7. Siemens earnings were up by 50% this year 0.093 4 0.372

than last year.
Weakness
8. Siemens have less media advertisements. 0.065 2 0.13
9. Leading competitor has a well established 0.10 2 0.20
brand name.
10. Compared to its competitors, Siemens 0.075 1 0.075
currently has a limited number of branches for
customers to go to for assistance.
TOTAL 1.00 3.198
Internal Factor Evaluation (IFE) identifies major strengths and weakness of the
company. As of the moment, the key issues inside the firm that must be address are the
following, Siemens media advertisements, continue to establish brand name, and put up
branches for easy product distributions.

The strengths listed above shows the superiority of the company in its selected
industry. Siemens major strength was achieved by gaining an edge against its
competitors. Siemens quickly dominated the market because of its tie ups with prominent
hospitals across the nation. Another factor that must be considered was their being able to
expand their market not only in Luzon, but also in Mindandao. Although facing
difficulties from threat of low pricing by competitors, Siemens aims to still be the market
leader in the Health Industry.

VI. Strategy Formulation
Strengths, Weaknesses, Opportunities, Threats (SWOT)
Strengths Weakness
1. Siemens customers are 1. Siemens have less media

prominent hospitals in the advertisements.
Philippines.
2. Siemens is the market 2. Leading competitor has a
leader in the health industry well established brand
3. Pioneer among name.
competitors in the health
sector area. 3. Compared to its
4. First to gain orders of CT competitors, Siemens
systems from different currently has a limited
places in Mindanao. number of branches for
5. Maintenance coverage of customers to go to for
newly installed base. assistance
6. Siemens earnings were up
by 50% this year than last
year.
7. Siemens healthcare
Philippines is going
international.
Opportunities SO Strategies WO Strategies
1. Fast changing technology. 1. As their earnings grows; 1. The company should use
they should expand more fast changing technology to
2. Untapped Markets and tap those untapped release advertisements about
markets. (S6, S7, O2) their product. (O1, W1)
3. Health Industry is a
booming economic industry. 2. The company should 2. By tapping untapped
continue opening up and markets, the company would
4. Government supporting gain orders from other have a very strong brand
health sector reform agenda. regions across the nations. name. (O2, W2)
(Government is now in (S2, S4, S7, O3, O4)
search for suppliers of 3. The company must open
advance medical 3. Continue to be number 1 up more branches that are
equipments.) in the market. (S2, S1, S7 accessible to hospitals and
O1, O3) its customers. (O4, W3)

Threats ST Strategies WT Strategies
1. Growing population of 1. Monitor the price 1. Siemens should have

poor people in the country. changes of competitors. advertisements on
(S2, S6, O3) newspapers including the
2. Shortage of qualified need of qualified engineers
engineers. 2. Use their being a market for the company and other
leader to put foundations for job openings. (W1, T1, T2)
3. Low pricing of the poor. (S2, T1)
competitors. 2. Establish a better brand
3. Continue to gain orders name by having a strategic
4. Perceptions of the across the country. (S3, S4, price, and more qualified
Philippines being unsafe S7, O4) workers. (W2, T2, T3)
and unstable.
4. Sustain their being no. 1
5. Global Financial Crisis in the market. (S2, S7, O5)
5. Being a market leader,

pull investors from outside
to invest on them. (S2, T5)

Strategic Position and Action Evaluation (SPACE) Matrix
FINANCIAL STRENGTH RATINGS

Current ratio is high with a percentage score of 1.46% 4
Quick ratio is high with a percentage of 0.98% 3
Net Sales of Siemens Healthcare is Php. 2,569,894,466 4
11
INDUSTRY STRENGTH
Market share of Siemens in the industry 5
Growth potential of 50% every year and 12.5% per quarter. 4
Product Innovations by the company’s R&D is an –
important factor in the Health Industry. 3
12
ENVIRONMENTAL STABILITY
Fast development of technology -1
Competitive Pressure -2
Inflation Rates -3
Price range of competing pressure -4
-10
COMPETITIVE ADVANTAGE
Market Share -1
Product Quality -2
Control over suppliers -1
Customer Loyalty -3
-7
Conclusion
ES average is -6/4 = -1.5 IS average is 12/3 = 4

CA average is -7/4 = -1.75 FS average is 11/3 = 3.67
Directional Vector coordinates: x-axis: -1.75 + (+4) = 2.25

y-axis: -2.5 + (+3.67) = 1.17

The directional vector is located at the aggressive quadrant of the SPACE Matrix.
It means that the organization is in an excellent position to use its internal strength. The

company could avoid the external strength while taking advantage of external
opportunities. Siemens can rely fully on its internal strengths.
Boston Consulting Group (BCG) matrix
High (1.0) Medium(.50) Low(0.0)
High +20
Medium 0
Low -20
Relative market share position per annum in 2007: 2.5B / 1.9B = 1.3 or 1

In the year 2007, there was an increase of 10% in the revenues for Siemens compared to
2006. Siemens Healthcare belongs in the STARS quadrant. Market penetration, market
development and product development are appropriate strategies for the company to
consider.
The Internal – External Matrix
Strong (3.0-4.0) Average (2.0-2.99) Weak(1.0-1.99)
I II III
Siemens
IV V VI
VII VIII IX
Siemens IFE (3.198) and EFE (3.07) scores landed the company to cell I. The
prescription for Siemens can be described as grow and build. Intensive strategies are most

appropriate for the company. Siemens can continue to be superior in the market and at the
same time expand and be able to tap untapped markets.
Grand Strategy Matrix

Siemens Healthcare falls into the first quadrant. It has a strong competitive
position and at the same time the industry it belongs has a very rapid growth market. As
stated earlier in the EFE, Health Industry is a booming economic industry. Market
Development, Market Penetration, and Product Development are three strategies Siemens
could use in order for them to continuously dominate the market.
Quantitative Strategic Planning Matrix (QSPM)
Key factors Product Market

Development Penetration
Opportunities Weight AS TAS AS TAS
1. Hospitals nowadays needs advance .15 4 .60 3 .45
medical equipments.
2. Untapped Markets .10 3 .30 3 .30

3. Health Industry is a booming 4 .40 3 .40
economic industry. .10
4. Government supporting health sector 4 .40 3 .40
reform agenda. (Government is now in .10
search for suppliers of advance medical
equipments.)
Threats
1. Global recession 3 .30 3 .30

.10
2. Growing population of poor people in 3 .30 3 .30
the country. .10
3. Shortage of qualified engineers 2 .10 2 .10

.05
4. Low pricing of competitors 3 .30 3 .30
.10
5. Perceptions of the Philippines being 1 .05 1 .05
unsafe and unstable. .05
Strengths
1. Siemens customers are prominent .15 4 .60 4 .60

hospitals in the Philippines.
2. Siemens is a market leader in the .15 4 .60 4 .60

health industry.
3. Pioneer among competitors in the 3 .30 3 .30
health sector area. .10
4. Maintenance coverage of new 4 .40 3 .30
installed base .10
5. First to gain orders of CT systems 4 .40 4 .40
from different places in Mindanao .10
6. Siemens med tech is going 4 .60 3 .60
international. .15
7. Siemens earnings were up by 50% this 4 .40 4 .40
year than last year. .10
Weakness

1. Siemens have less media 1 .10 2 .20
advertisements. .10
2. Leading competitor has a well 2 .10 3 .10
established brand name. .05
3. Compared to its competitors, Siemens 2 .20 3 .30

currently has a limited number of .10
branches for customers to go to for
assistance.
TOTAL 6.45 6.40
The QSPM matrix shows that Product Development is more attainable than
Market Penetration. Product Development’s 6.45 is up by .05 points compared to Market
Penetration’s 6.40 total attractiveness. Market Penetration and Product Development has
a very low difference in the QSPM’s matrix results. Therefore, Market Penetration and
Product Development must go together in order to attain success in the future. Siemens
has already penetrated the market by acquiring top hospitals, in order for them to sustain
the market leadership they must continuously develop innovations for their product.
VII. Objectives and Recommended Strategies.
A. Strategic Objectives

- Maintain its market leadership.
- Penetrate not only big hospitals, but also small hospitals across the nation.
- Continue to expand its market share.
- Be known for its Corporate Social Responsibility.
- Sustain its being top in innovations.
- Develop products that are successfully marketed.
- Maintain Customer Loyalty.
- Minimize the threat of decreasing qualified engineers.
A.1 Financial Objectives
- Increase 30% Revenues in the year 2013
- Increase in Net Income for at least 40% for the next years.
- Increase Total Assets, Liabilities and Stock Holder’s Equity by at least 10-15%.
B. Recommended Strategies
Marketing Division
- Advertise. Use below the Line (BTL) or above the Line (ATL)
advertisements.
- Start tapping untapped markets.
- Penetrate even small hospitals and other clinics which are users of advance
medical equipments.
- Carefully monitor on price adjustments by competitors.
Research and Development

- Continue to research and innovate new products.
- From 38 innovations a day, increase it to 45.
- Must be able to counter act any innovations release by the competitors in the
market.
- Make sure innovated products are sold easily in the market.
Distribution Division
- Add distribution channels and maintenance centers that are accessible to
hospitals, clinics and other customers that are using the product.
Financial Division
- Identify and maintain key financial factors that contribute to Siemens market
leadership.
- Make sure all division / departments have their respective allocated resources.
- Monitor the increase of sales / revenues each year.
Management
- Open up foundations helping the less fortunate people. For example, grant
scholarships, support NGOs.
- Get the employees to have a sense of corporate social responsibility.
- Make sure all departments are doing their respective jobs and projects and
goals are done strictly on time.
- Tie up with engineering schools
Financial Projection
Income Statement

The table above is a projection of Siemens Income Statement. Siemens strategy is
to increase its Net Income between 30%-40% in the year 2009. The increase in expenses
Siemens Statement of Income
For the Year Ended 2007 and 2013 is
As of 2007 Projection on 2013

Revenues P 2,569,894,466 P 3,340,862,806
Direct Costs P 1,592,664,826 P 2,150,097,515
Gross Profit P 977,229,640 P 1,190,765,291
Less: Operating Expense
Salaries P 482,607,075 P 627,389,197.5
Depreciation and amortization P 76,835,657 P 88,361,005.55
Communications P 71,589,319 P 78,748,250.9
Marketing and Representation P 27,262,567 P 40,893,850.5
Utilities P 23,187,500 P 25,506,250
Repairs and Maintenance P 31,427,405 P 37,712,886
Transportation and Travel P 49,979,958 P 59,975,949.6
Freight P 17,087,789 P 18,796,567.9
Rent P 45,711,055 P 51,196,381.6
Insurance P 2,707,274 P 3,248,728.8
Outside Services P 2,556,140 P 3,325,982
Tax and Licenses P 17,473,414 P 19,220,755.4
Training and Professional Fees P 20,972,464 P 24,118,333.6
Miscellaneous P 50,542,790 P 55,597,069
P 925,767,478 P 1,074,140,519
Income (loss) from Operations P 51,462,162 P 116,624,772
Other Income - Net P 124,358,823 P 136,794,705.3
Income before Income Tax P 175,820,985 P 253,419,477.3
Less: Income Tax (30%) P 52,746,295.5 P 76,025,843.19
Net Income after Income Tax P 123,074,689.5 P 177,393,634.1
projected carefully with how the economy grows and becomes more stable and recovered
from the Global Financial Crisis we’re facing today.
Balance Sheet
Siemens Balance Sheet

For the Year Ended 2007 and 2013

Assets
2007 2013
Current Assets P 1,566,052,385 P 1,712,657,624
Non Current Assets P 410,006,404 P 533,008,325.2
Total Assets P 1,976,058,789 P 2,245,665,949
Liabilities and Stock Holder's Equity

Current Liabilities P 1,366,811,135 P 1,503,492,249
Non Current Liabilities P 3,017,768 P 3,168,656.4
Total Liabilities P 1,369,828,903 P 1,506,660,905
Total Stock Holder's Equity P 606,229,886 P 788,098,851.8

Total Liabilities and Stock Holder's Equity P 1,1976,058,789 P 2,294,759,757
The table above shows the increase in assets by 13.6% in the year 2013. The total
stockholder’s equity is also increased by 30%.
VIII. Action Plans and Departmental Programs
ACTIVITIES TIMETABLE EXPECTED PERSON/UNIT

OUTPUT RESPONSIBLE

Make advertisements Every 6 Increase in market Marketing
on news paper or months share / sales
television.
Penetrate small Monthly Increase sales / retain Marketing
hospitals market leadership
Evaluation Meetings Monthly Minimize hanging Management

projects and company
activities.
Scouting and hiring of Annually Increase in work Human Resource
qualified engineers. productivity
Development of Monthly Increase in sales / Management /
innovative products to market share Research and Dev’t
be sold in the market.
Easier customer Quarterly Increase in customer Distribution
support and satisfaction
maintenance of
products.
Invest on Corporate Quarterly Increase market Management /
Social Activities. leadership / establish a Financial
more strong company
image.
IX. Strategy Evaluation / Monitoring and Control

Strategies recommend in all the aspects of the business should be closely
monitored in order to achieve success. Every division / departments in the company
would submit a monthly report regarding the status of their activities. The management
also would conduct monthly evaluation meetings to fully monitor if there is a problem or
activities that are left behind and not done on the designated schedule.
The distribution department would be monitoring on the number of branches that
they have established and should submit a report to the management about the newly
established branches’ efficiency.
Balance Score Card
CUSTOMERS
GOALS MEASURES TARGETS
1. Customer loyalty Rate of return of the Increase of sales by 30%
customers in the year 2013
2. Excellent product Advertise through Penetration of small
advertisements. ATL and BTL kind of hospitals by year 2013 /
advertising. More demand across the
nation.
3. Expansion of Maintenance Increase of number of By 2013 maintenance
Outlets and Stores nationwide stores and outlets should be visible
maintenance outlets within the market area.
per region.
4. Market leadership Monthly market share Increase of market share.
performance
evaluation.
5. High customer satisfaction Customer feedback Avoid loss of customer
forms on each and decrease in sales.
maintenance outlets.
FINANCIAL PERSPECTIVE

1. Increase its market share. Return on Assets and Increase in Revenue and
Equity Net Income.
2. Maintain high profitability Increase in Revenue Increase in profits and
by 30% in the next 5 market share
years.
3. Maintain Financial Stability Increase in Stock Maintained Market
and Good reputation through Holder’s Equity Leadership.
investors.
HUMAN RESOURCE / MANAGEMENT

1. Additional Career Fair Tie up with Minimize threat of less
Activities in Schools. engineering schools. qualified engineers.
2. CSR orientation of Promote CSR CSR oriented employees.
employees. activities in the whole
company.
3. Continue being the preferred Incentives every High inflow of
employer. month, Team employees.
buildings every
quarter.
Bibliography

http://www.census.gov.ph
http://www.indexmundi.com/philippines/economy_profile.html
http://www.philippines.hvu.nl/facts2.htm
http://www.siemens.com.ph/jobs-careers.htm
http://www.GE.com.ph/financial.htm
http://www.Philips.com.ph
http://www.doh.gov.ph/news/2008.htm
http://en.wikipedia.org/
https://www.cia.gov/library/publications/the-world-factbook/geos/rp.html
http://www.bsp.gov.ph/statistics/spei/tab31.htm
Manila Standard Today -- 12% VAT in effect today; Palace warns profiteers --
feb01_2006
http://www.census.gov.ph/data/nationalaccounts/index.html
http://www.google.com.ph/firefox?client=firefox-a&rls=org.mozilla:en-US:official
Interview
Ms. Jean Irene Janobas – Vice President / Financial Controller Siemens Philippines


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I.

employees in the country.

Siemens’ businesses are as follows, Automation and Control, Industrial Solutions,

Information Technology Products and Solutions, Medical Solutions, Power Generation,

focusing more on the Medical Sector.

Automation and Control

Because modern industrial processes have become so complex, a totally

of our clients in the manufacturing, processing, and construction sectors.

Siemens Corporation Philippines

Siemens IT Solutions and Services

Siemens IT Solutions and Services is an internationally leading provider of IT

consulting to system integration, right through to the management of IT infrastructures.

Philippines is known to be as one of the most populated archipelago. As people

depend upon safe and fast public transportation.

Siemens is committed to quality patient health care as a provider of

technologically advanced medical solutions to hospitals and medical clinics throughout

assist physicians in the early diagnosis and treatment of diseases.

Siemens Corporation Philippines

back 1847. He was an extraordinary inventor, engineer and entrepreneur. In fact, he

business under Reigner Company in 1910.

energy, industry, communications, information, transportation, healthcare, and other

excel in their business performance.

Siemens Corporation Philippines

products and reagents; hematology systems; automated immunoassay platforms to

provide medical information to clinicians; and molecular testing products, including a

line of molecular diagnostics instrumentation and software, as well as assays for

diagnosis and monitoring of HIV and hepatitis.

The company also provides urinalysis product portfolio to laboratory personnel,

In addition, Siemens Medical Solutions Diagnostics offers lab consulting services;

service and support. It serves laboratories, clinicians, and patients.

Siemens Corporation Philippines

an interview with the Vice President / Financial Controller of the company.

external and internal environment.

entrants in the industry and last is the threat of substitute products.

2007, the whole year.

Siemens Corporation Philippines

”To sustain growth by enhancing local value added competencies”

”To be the preferred employer through an effective people management system“

”A learning organization with dynamic integrated business processes.”

“We are Siemens.”

”Customer Satisfaction is our aim.”

”We provide best-in-class electrical and electronic engineering

solutions, products and services.”

”We are the preferred employer.”

Siemens Corporation Philippines

5. Concern for survival and •

8. Concern for public image •

9. Concern for employees •

Customers- (Who are the firm’s customers?)

Products- (What are the firm’s major product and services?)

Siemens Medical solutions offers state of the art machines to be used in

Mammography, Ultra Sound, Molecular Imaging and other more.

Siemens Corporation Philippines

Siemens is a worldwide company. Their emphasis of competition is within the

Philippine market, namely, Luzon, Visayas, Mindanao. Although a worldwide company,

Technology- (Is the firm technologically current?)

”A learning organization with dynamic integrated business processes.”

Self-concept- (What is the firm’s major competitive advantage?)

”We provide best-in-class electrical and electronic engineering

hospitals in the Philippines to be its primary customers.

Siemens Corporation Philippines

Concern for employees- (Are employees a valuable asset of the firm?)

”To be the preferred employer through an effective people management system“

Recommended Vision Statement