Title of the project

Energy Transmission Solutions at Siemens Ltd, India

Summer Internship Report

WITH

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Under Guidance of

Mr Rachit Arora (Senior executive marketing) (Company Guide)

Prof. M.k.s Seshasayee (faculty guide) Mr Matruprasad (Alumni Guide)

KIRLOSKAR INSTITUTE OF ADVANCED MANAGEMENT STUDIES, PUNE, MAHARASHTRA 2012-14

Submitted by : Priyanka Kulshrestha 1019 (Pune)

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DECLARATION

I, PRIYANKA KULSHRESTHA, student of PGDM, third trimester, of KIRLOSKAR INSTITUTE OF ADVANCED MANAGEMENT STUDIES, PUNE, BATCH 2012-2014, hereby declare that report entitled ENERGY TRANSMISSION SOLUTION AT SIEMENS is the outcome of my own and genuine workat SIEMENS ltd. Plot- 6A,sec-18 and the same has not been submitted to any other university or institute for the award of any degree or professional diploma.

DATE:

PRIYANKA KULSHRESTHA

PLACE:

(STUDENTS SIGNATURE)

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ACKNOWLEDGEMENT

I wish to acknowledge, with a great sense of gratitude, the guidance, inspirations and encouragement, which I received from my learned guide Mr . Rachit Arora, Siemens Limited in accomplishing this work. I express my deepest gratitude to him for always being there to share his knowledge and clearing my basics. During my training in SIEMENS Ltd. I learnt a lot about the various aspects of power transmission and came to know about the techniques used practically for transmission of electrical energy. My training has been an enriching experience of project marketing and acquiring projects in B to B firm. I have learnt a lot about practical application of my knowledge. I would like to take this opportunity to express my profound sense of gratitude and respect to all those who helped me throughout the duration of my training.I am also thankful toall those who have directly or indirectly helped in making my training a success and making it a great educational experience. Words are inadequate in offering our thanks to the Directors of Our Institution Dr. GopalIyengar and Dr. Janaki Naik for their encouragement and cooperation in carrying out the project work. I also like to express my deep sense of gratitude to my faculty guideMr M.K.S Seshasayee.

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Table of contents

Executive Summary.6 Introduction..7 Objectives of the study..8 Brief description about the company9-12 Methodology followed..13 Brief about the concepts14-20 Tabulation and findings 20-22 Interpretations and conclusions. 23-24 Recommendations.25 . Limitations of the study26 Scope for future improvements. 27 Bibliography..

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Executive summary

The study focused on issues like how marketing takes place in a B to B firm. In the whole duration of 2 months I studied how Siemens captures its customers and market. The project given to me also involves market research of number of projects finalised in particular period of time based on particular technology, their results and an analysis of competitiveness of Siemens in these projects.

As its a project marketing so several t hings are to be kept in mind. Then we also focused on how bidding process takes place and how a company acquires a project. Its necessary to keep track of eligible competitors and accordingly participate in the bidding process. The companies bid according to the market conditions and also keep in mind its customer relations. Then technicalities involved in the bidding process are also taken into consideration. International firm like Siemens already have a well-established market. It emphasized how to focus on customers and grab the opportunities and increase maximum market share , what all things should be kept in mind while interacting with customers , how to hold the customers and fulfil customers requirement by providing highly customized solutions to the customers. Keep track of major competitors and market and plan actions according to market and competitors data and past experiences. How to acquire a project and handle it was also the part of industrial learning.

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Introduction

Role of marketing in Energy transmission and transmission solutions (ETTS). ETTS provides customized solutions to customers. Marketing helps in acquisition of these projects. Market research involves number of projects under taken by Siemens in particular technology in particular time duration and finding out its market share . Role of marketing in Engineering Procurement and Construction business (EPC) at Siemens and maximizing market share. Deals with type of business handled at Siemens. How Siemens uses its core competencies in acquiring the projects and maximizing the profits and market share.

Role of marketing in project acquisition Identifying the opportunities Matching competency line with customer requirement Bid /no bid decision Expected competitors, their data and newplayers,Compare with competitors offerings Swot analysis Complete offer and submit to customer Bid opening Win loss analysis Negotiations with customers Handing over of project to execution team

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Objective of the report

To find the competitors under the segment & their share i.e. Market SHARE This involves research of projects existed in the market during the period 2008-2011 and calculating the market share of each company. How Siemens provide customized solutions to its customers based on their requirements. It will help us to understand how we acquire project, capture customers & opportunities, obtain cost, and submit proposals to customers, measure customer satisfaction and take feedbacks from customers. It will help me to understand the role of marketing in acquisition of a project, capture customers & opportunities, identify risks involved, obtain correct cost, and submit proposal to customers, negotiate with customers, measure customer satisfaction and take feedbacks from customers and share the feedback with colleagues for appropriate measures. The company will use the market analysis carried out by me to carry out a generalized competitor SWOT analysis and re-substantiate the market & market share. The analysis of the market will help the company in rechecking its database and anomalies, if any.

The project will teach what Siemens exactly do and how it provides a complete solution to customers requirement. It will give a complete idea to the trainee how project management is done at Siemens.

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Brief description about the company

COMPANYS PROFILE
LOGO:

Values: Responsible, excellent and innovative Vision: Siemens To be a Pioneer, redefining the standards which they have set Strategy: Achieving sustainable profitable Growth in our time tested strategy. Planning to be a market and technology leader in India

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Siemens was founded in Berlin by Werner von Siemens in 1847. As an extraordinary inventor, engineer and entrepreneur, Werner von Siemens made the world's first pointer telegraph and electric dynamo; inventions that helped put the spin in the industrial revolution. He was the man behind one of the most fascinating success stories of all time - by turning a humble little workshop into one of the world's largest enterprises. As Werner had envisioned, the company he started grew from strength to strength in every field of electrical engineering. From constructing the world's first electric railway to laying the first telegraph line linking Britain and India, Siemens was responsible for building much of the modern world's infrastructure. Siemens is today a technology giant in more than 190 countries, employing some 440,000 people worldwide. Our work in the fields of energy, industry, communications, information, transportation, healthcare, components and lighting has become essential parts of everyday life. While Werner was a tireless inventor during his days, Siemens today remains a relentless innovator. With innovations averaging 18 a day, it seems like the revolution Werner started is still going strong.
Siemens was established in India in 1922. However, the story of Siemens association with India began in 1867 when Werner Von Siemens personally supervised the laying of the first telegraph line between Calcutta and London. Making the countrys priorities its own, Siemens has put its experience in the major core sectors namely Power, Industry, Telecommunications, Transportation and Healthcare. In the last three decades, Siemens has played an active role in Indias technological progress and has 12 offices and 5 manufacturing units in the country.

With a presence in more than 190 countries Siemens is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. For over 160 years, Siemens has stood for technical achievements, innovation, quality, reliability ad internationality. Siemens has been synonymous with international focus and worldwide presence for 160 year. Today, Siemens is a global powerhouse with activities in nearly 190 regions. The company has around 400,000 employees (in continuing operations) working to develop and manufacture products ,design and install complex system and projects ,and tailor a wide range of solution for individual requirements . Making the countrys priorities its own, Siemens has put its experience in the major core sectors namely Power, Industry, Telecommunications, Transportation and Healthcare. With a
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presence in more than 190 countries, with its headquarter at Berlin, Munich, Siemens is one of the most internationally acclaimed organizations on earth . Siemens is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. For over 160 years, Siemens has stood for technical achievements, innovation, quality & reliability. On power list 2011 of the most profitable companies, Siemens has been ranked among top 50 companies in the world.

What Siemens does Siemens Pursue?

Siemens is involved in four major sectors -

1. HEALTHCARE SECTOR. Siemens Healthcare (formerly Siemens Medical Solutions, formerly Siemens Medical Systems, internally within Siemens known as "Med") is a supplier to the healthcare industry, and is headquartered in Erlangen Germany. 2. INFRASTRUCTURE AND CITIES.

Infrastructure & Cities has been formed to provide expertise on sustainable urban development. The new sector rigorously focusses on the important cities customer group, making the portfolio for cities easier to understand and more transparent. The new Sector has been formed by combining the Mobility and Building Technology Divisions from the Industry Sector and the Power Distribution and Smart Grid Applications Divisions from the Energy Sector.

3. INDUSTRY SECTOR The Industry Sector is one of the worlds leading suppliers of innovative, environmentally friendly products and solutions for industry customers. Solid market expertise, technologybased services and software for industrial processes are the levers Siemens use to increase the customers productivity, efficiency and flexibility.

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They consistently rely on integrated technologies and, thanks to their bundled portfolio, they can respond more quickly and flexibly to their customers' wishes. With its globally unmatched offering of automation technology, industrial control and drive technology as well as industrial software. Siemens Industry is able to cut the time needed for the market launch of many products in half with software and automation technology while also significantly reducing energy or wastewater costs for manufacturing companies.

4. ENERGY SECTOR . Siemens Energy is a leading global supplier for the generation and delivery of power and for the extraction, conversion and transport of oil and gas. Energy sector of Siemens basically deals with the engineering, designing and execution of high voltage (HV) substations

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Research methodology design and sample design

Research design includes the framework or blue print for constructing the market research project. Formulation of research objectives Market research is carried out going through the list and no of projects in market in particular period of time by collecting secondary data from internet, newspapers etc. There is an online tool called MOSS (MARKET ORIENTED SIEMENS SYSTEMATIC). Projects are dropped in this online tool and limited people have access to this tool. Projects are entered in this online tool. The tool can also generate various reports. Analysis is also done through research on internet and through various news articles. Thus research can be termed as an exploratory research. And secondary data is used for research which generates pre-established degree of validity and reliability. Data was collected from websites newsletters and different catalogues to cater the needs of the studies.

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Concepts / models introduced in the study

SWOT Analysis
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weakness, Opportunities and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favourable and unfavourable to achieve that objective. To come to this SWOT conclusion, first we need to do a Situational analysis. Situational analysis means knowing about everything that can impact the Victory. Many businesses dont, but should be constantly evaluating their position in the market. It includes internal analysis and external analysis. The internal method uses data and information from within the business. It includes efficiency productivity, costs, strength and weakness. The external method uses data and information from outside the business. It includes Competitors, the market and opportunities and threats.

Strengths The manpower is highly trained Sometimes there are projects which are done earlier also so that experience helps a lot
when the project which involves similar technologies and requirements arrives again. Cash rich company Already has a well-established brand image So it is a brand which customers trust and consider a reliable partner which results into customer loyalty Anti-compliance practices help in winning customers confidence

Weakness High attrition rate Unavailability of few main products in portfolio like power cables

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Opportunities Global engineeringcentre can be set up in India pertaining to the low cost of
manpower Conduct training of manpower well before the start of project to gain crucial time in bid preparation and project execution Constanttly develop new low cost high quality products to lower the costs Familiarize the customer with benefits of Siemens technology to get the bid documents modified for Siemenss benefits

Threats New companies with continuously upgrading their technologies Aggressive pricing by the entrants to enter the market and have a share in the
lucrative power sector Threat for Chinese competitors Threat for ever changing Government policies instability in government plans

Bidding process

Customers issue NIT ( Notice inviting tender ) in newspapers or websites or emails. Bidders purchase the bidding document / tender documents. Bidders study the documents and match competency in line with the customers requirement. Primary decision is taken to bid /no bid. Form a bidding team including marketing engineers and factory externals Send enquiries to sub suppliers /vendors / factories. Check received offers with our/ customers requirement Complete the customers requirement. Collect all offers and prepare the total cost of the project. Management ask for competitors data ( who else is participating in the bidding)

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Management provide the profit figures Complete the offer and submit it to the customer Customer evaluates all offer Customers can also call for post bid discussions, if necessary Customers will amend the docs if necessary. Lowest evaluated bid is being awarded the contract. Bidding team hands over the contract to the project management and execution team. No bid decision Marketing team will keep track of bidding proceedings. .

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Energy sector has various sub sectors which will be stated in the contents. The sub sector with which I am working is the power transmission sector. This sector basically deals with the transmission of electricity through the use of substations and transmission lines.For providing this solution tenders are issued (following the whole tender process) and the company with lowest tender value wins the bid .

Energy transmission transmission solution (ETTS) :Transferring power form generation centre to load centre via transmission lines. An electrical substation is a subsidiary station of electricity generation, transmission and distribution system where voltage is transformed from high to low or the reverse using transformers.Substations transform voltage from high to low, or the reverse, or perform any of several other important functions like controlling the amount of power flowing through a line, protecting the end consumers against high/ low voltages etc.. Between the generating station and consumer, electric power may flow through several substations at different voltage levels. Substations may be owned and operated by an electrical utility, or may be owned by a large industrial or commercial customer

The power can either be transferred in AC or DC thus differentiating the different technologies used. The substation based on AC are known as HVAC (High Voltage AC) Substation and the substations based on DC technology are known as HVDC () Substations or HVDC Converter Stations. Sometimes there is also a requirement of improving the quality of power flowing between two existing substations by modifying a few parameters of these substations. This requirement is met by various technologies which form part of the FACTS (Flexible AC Transmission System).

The equipments in a substation are placed in a specific manner with some minimum distance between them due to the high voltages and current involved. Decreasing this distance could result in sparking between the equipments. The insulation for this
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purpose is provided by air and hence these are placed at some minimum distance between them. The substations based on this technology/ insulation are known as AIS.

Similarly GIS

Solutions for Both types of substations i.e. AC or DC substations are provided by Siemens. But DC substations are comparatively costlier than ac substation but there are much less energy losses in DC substation than on AC substation. Depending upon the investment, budget , recovery decisions are taken whether to opt for AC substation or DC substation.

Tenders are issued for both kinds of substations. Bidding takes place for both kind of substations . And here my domain starts, my projects deals with TS 2 project handling and providing customized solutions to customers. Moreover project also covers market research of projectsin market at particular duration of time and market share.

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In TS 5 there are many companies which are present in market and provide AIS and GIS solutions but for TS 2 i.e. HVDC and FACTS there are only 3-4 companies present in market Siemens, ABB,Alstom,and Xian which uses Siemens technology only .

So it gives a major competition to other companies in HVDC and FACTS projects.

Todays challenges in power transmission ask for flexible and effective technical solutions. Siemens well proven High Voltage DC (HVDC) technology is the adequate solution for economic power transmission over very long distances and also a trusted method to connect asynchronous grids orgrids of different frequencies. Therewith HVDC power transmission is the only realistic

alternative to AC technology. Flexible AC Transmission Systems (FACTS) Increase the reliability of AC grids and reduce power delivery costs. They improve transmission quality and efficiency of power transmission by supplying inductive or reactive power to the grid. Siemens, as a leading manufacturer of all kind of Flexible AC Transmission Systems is executing projects, and supplies proven and highly reliable technology all over the world.

Depending upon the purpose served, substations are classified into: Step-up sub-station Primary grid sub-station Secondary sub-station Distribution sub-station

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Power Generation Power Transmission Power Distribution

Tabulation and Findings

Competitive analysis of Siemens

This involves number of hvdc and factsprojects acquired by Siemens during 2008-11. The projects won by Siemens and the projects lost by Siemens were taken into consideration and a WIN LOSS analysis of these projects to have learning from projects .To resubstantiate Siemenss core competency and find out the weakness /shortcomings and negate the same in the upcoming projects .

Pie chart is representing number of HVDC projects handled by Siemens and other companies during 2008-11 and their market share ( in percentage)
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HVDC Market Share

siemens 28% abb 72% 0%

PIECHART 1

Pie chart is representing Number of FACTS projects handled by Siemens and other companies during 2008-2011 and market share

FACTS Market Share

alstom 18% 0% 0%
abb 30% 0% siemens 52%

PIECHART 2

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Pie chart representing total number of projects acquired by Siemens and other companies in same technology i.e TS 2 market during the period 200811 and market share

TS 2 market
Alstom 1% siemens 29%

ABB 70%

PIECHART 3

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Interpretations andConclusions

As we can depict from the pie chart 1 shown above ABB is giving tough competition to Siemens in HVDC as Siemens total market share is only 28 % while that of ABB is 72%. So ABB is dominating SIEMENS in the HVDC market and Alstom has not been able to win a single HVDC project in the said project. Pie chart 2 depicts that ALSTOM with 18% and ABB with 30% market share are not the dominant players in the market. SIEMENS,with a market share of 52% as visible in the chart, has occupied more than half of the market. So SIEMENS has dominated ABB and ALSTOM in the FACTS market in the said period.

Now pie chart 3 represents that ABB has total market share of 70% ( both hvdc and facts) ALSTOM has only 1% and SIEMENS has 29% market share. This indicates that ABB had a tight hold on market during the period 2008-11.

Win loss (based on assumptions stated below)

Why Siemens won or lost the particular project Most of the customers are government identities and hence, the project is awarded to the bidder with the lowest evaluated price. Most of the projects are lost due to quoting of high prices of the bid. Sometimes other companies have competitive advantages of location therefore, they could save on the transportation costs and reduce their total delivery time. Some companies manufacture some equipments by its own so costs are saved which was otherwise spent in outsourcing.

Onshore/off shore critical equipment Some companies could offer the same equipment from within India (on-shore equipment) while others could be importing the same equipment from their own factories abroad or from other manufacturers abroad (off-shore 26 | P a g e

equipment). This results in significant differences in transportation costs, taxation & delivery times.

Same type of projects done earlier these may result in savings in the training costs for manpower and reduces the engineering time for the current project as the designs are readily available form the past projects.

If company has done same kind of project s earlier which are already type tested then that company saves the cost of type testing (type tests are valid for a particular period of time and valid for all the products with same design, manufacturing process, workmanship, raw material and manufacturing location) and hence becomes more competitive for current project and may have won the bid

Assumptions in Win-Loss analysis

Equipment are of same dimensions and weight and transporter is same Apart from critical equipments company offers its own equipment and compare prices Lowest prices quoted by other companies are 100% correct

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Recommendations

The company can reduce the prices of quoting the bids by doing tie up with different vendors , by doing this it can increase the possibility of winning the bid for particular project High tech solution manpower retaining is a challenge, so retaining manpower and continuously providing them with the required training should be taken into consideration.

Explain the customers about the technical advantages of Siemens technology. Conducting regular meetings with customers to understand their requirement and be updated with customers future plans Conducting customer satisfaction surveys so that regular feedbacks can be taken from customers and take measures accordingly

Maintaining customer relations

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Limitations of the study

No direct interaction with the customers as most of the customers were government customers and due to their immense pressure caused by the shortage of manpower, they prefer to meet the employees only. Since it is B to B marketing, the regular principles of product marketing do not apply For win loss analysis we dont have correct market price of many projects as many companies dont reveal correct prices (in case of projects from industrial clients). Access to limited data i.e most of the data and strategies of bidding of the company are not revealed as it is highly confidential. Duration of 2 months was a time constraint. Latest data cant be given because strategies are linked up.

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Bibliography

1. www.wikipedia.org 2. www.siemens.com/answers 3. www.google.com 4. www.powergridindia.com 5. www.abb.co.in 6. www.alstom.co.in

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