Restructuring / Turnaround Strategies Case Study

Siemens' Troubled Mobile Phone Business: Options and Strategies

Abstract:
The mobile phone division of Siemens AG, the German electronics major, is the fourth largest producer of mobile handsets in the world. But since 2001 it has been constantly reporting losses quarter after quarter. The company's efforts to revive the division's fortunes failed to yield any substantial result and the division has grown to be the 'Achilles heel' for the European giant. With the appointment of the new Chief Executive Officer (CEO), Klaus Kleinfeld, a decision on the mobile division has become the top priority. The troubled unit poses four possible options for the new CEO – sale, closure, joint venture or a turnaround.

Pedagogical Objectives:

• To understand the growth of Siemens' mobile phone division, the factors responsible for its decline and the strategies adopted during the troubled times
• To discuss the various options available for the CEO to make a decision on the future of the loss-making mobile unit.

Keywords : Siemens Information and Communications; Corporate Strategies Case Study; Mobile electronics products and services; Information and Communication Mobile (ICM); Turnaround and survival strategies; Restructuring plan, cost-cutting efforts; Heinrich von Pierer and Klaus Kleinfeld; Siemens Communications Group; Siemens AG mobile division; Loss-making division; EU economic recession, overcapacity; Nokia; Sony Ericsson; Motorola; BenQ; Revival options and strategies; Telecom equipment and services; Turnaround specialist; Divestments and spin-offs