Siemens in the Energy Market, Essay Example

In recent years, European electronics giant Siemens has moved much of its marketing resources, resources, research, as well as development into the concept of green energy, as well as green energy alternatives. Due its brilliant long-term investment into more sustainable energy, as well as its diversification of overall goods and services, Siemens has continued to grow at a staggering rate over the last few years. It has now become the model for many other corporations attempting to turn their businesses around all over the world.

Involved in a number of industries, including communications, automation, lighting, medicine, transportation, as well as power. It has concentrated on more energy-efficient ways in all of its sectors of business, ensuring its increased growth overall as a company. The company has recently pioneered the industry of eco-friendly high-speed trains, combining both its expertise in energy as well as transportation (Siemens’s Emerging Market Strategy, 2010).

Siemens even operates from an ecological perspective. They are leading the international market in wind power, and come second in the United States. In addition to investing 2 billion Euros annually in green research and development, it also employs a staggering 30,000 environmentally friendly patents (Siemens’s Emerging Market Strategy, 2010). Siemens continues to compete, and adapt with the fluctuating and rising oil prices by reducing the overall need for it. Throughout Sweden, Denmark, the Netherlands, and Germany, Siemens uses thousand of wind turbines to further generate eco-friendly energy (greenbook.org, 2013). This eco-friendly energy approach will certainly prove, and is proving, to be key in economic growth of the country overall.

The oil market in and of itself is definitely a monopoly. Though there is more than one company around the globe harvesting oil in various ways, by the time the product reaches its consumer, it is essentially a monopoly. In addition to government regulated prices, government contracts and permits are given selectively. The government works closely enough with the oil industry to maximize profits–it would be unfair to call it anything other than a monopoly.

There are many ways that the oil industry uses price to maximize profits. For instance, because of the turmoil currently going on in the Middle East, which happens to be where large deposits are located, the trade with these potentially volatile countries constantly has an effect on the price oil companies charge. These select government-contract based companies are able to regulate the price based on the accessibility of the oil at the time. The only people who truly know this information is the company themselves.

As another example, oil can be thought of just the same as any other commodity. The price fluctuation depends directly on supply–if it is perceived that the supply will decrease due to foreign policy issues, the price of oil goes up. This means that every time the government increases the threat level for the country, oil goes up. Every time the government imposes another foreign policy regulation, the price of oil goes up. On the contrary, when times are perceptually improving and stabilizing, the price of oil goes down. Because of Washington DC lobbyist groups, as well as how intertwined the government is in the oil industry, it remains in the government’s, as well as Big Business’, best interest to keep the price of oil high. This also means keeping the country on a constant state of alert.

The reason a company like Siemens was able to survive a decrease in profits, and then a recovery to make it stronger than it ever was, is due to its diversification in products, as well its efficiency. This is a way the government could promote clean energy, in essence put a cap on energy, as well as become more efficient itself. If the government were to use the money it uses to promote the oil market on green energy, it would not only stabilize the oil market, but decrease greenhouse gases in the process.

In essence, the government would be putting an efficient cap on energy if it took the model Siemens used, and applied it on a larger scale. Sure Siemens lost money initially, it eventually became profitable through overall efficiency. When the supply for energy continues to grow at the rate it has been, and the supply of oil begins to deplete, it will be companies like Siemens that will become the foremost leader in energy.