by the 323 team
Magdalena Kulik
Michał Bachryj
Aleksander Gajdus

Agenda
1. Background of both companies
2. The merger
3. The outcome
4. Final analysis (what went wrong?)

QUESTION
What do YOU know about SIEMENS?

1.Background SIEMENS
Siemens is one of the world’s largest and most respected companies in the field of electrical engineering and electronics.

1.Background SIEMENS
Its more than 470,000 employees in
150 countries, develop and manufacture products, design and create systems and plants, and provide customized services.

1.Background SIEMENS
In fiscal 2006, Siemens generated sales of more than €87 billion and net income of over €3 billion in its six business areas:

1.Background SIEMENS
Information and Communications,
Automation and Control, Power,
Transportation, Medical, and Lighting.

QUESTION
What do YOU know about BenQ?

1.Background BenQ
BenQ, a worldwide company designing, marketing and manufacturing of IT lifestyle devices that comprise multimedia displays, storage devices, imaging and communication products.

1.Background BenQ
BenQ’s revenue:
Taiwan-based parent company and
BenQ's 100 percent-owned subsidiaries whose major lines of business are the manufacture and sale of BenQ products.
Profits from subsidiaries not 100 percent owned are booked under nonoperating items.

1.Background BenQ
The company changed its name in
December 2001 from Acer
Communications & Multimedia Inc. to
BenQ Corporation.
They produced phones for such companies as Nokia and Motorola.

QUESTION
When was the first time
You have heard about
BenQ Siemens phones?

1.Background BenQ
Not many know tht BenQ stands for:

1.Background BenQ
Not many know tht BenQ stands for:
"Bringing Enjoyment and Quality to Life"

2.The merger
“We have found solid perspectives for our loss-bringing cell-phone department. BenQ & Siemens complement each other perfectly”
Siemens CEO Klaus Kleinfeld

2.The merger
In 2005, after months of difficult negotiations, two companies have agreed to join their forces.
A horizontal merger was set up.
They had different reasons…

2.The merger
Benq – it was an opportunity to become widespread on to the european market.
Siemens – it was a way to deal with a loss producing Siemens Mobile department, by selling it to the ambitious Taiwan company.

2.The merger
Selling Siemens Mobile was a part of
Klaus Kleinfelds restructurisation programme. The mobile phone section of the company hasn’t been producing income for some time.

2.The merger
Siemens wanted to get rid of its mobile production so bad, that they`ve paid
300mln euro to Benq for taking it over.

2.The merger
Despite the bad situation in
SiemensMobile, Benq was optimistic. It promissed first profits in june 2006.

QUESTION
Which football club did BenQ Siemens sponsor?

A symbol of their ambitions and optimism was depicted in sponsoring a great football club – Real
Madrid.
2.The merger

2.The merger
Unfotunatly, reality kicked in. Inspite of introducing new phone models under a new brand – Benq Siemens – sales were miserable.

QUESTION
How many of You have ever seen a BenQ
Siemens mobile phone?

Such products as:

Business phones

„The Flower Phone”

„The Butterfly Phone”

„The Rich B***h Phone”

„The White Power Phone”

And the absolute favourite….

„The Hello Kitty Phone”

3. The outcome
Results soon apeared: a decline in market share from 6 to 3 percent, putting it behind its main competitiors
– Nokia, Samsung, Motorola, Sony
Ericsson and LG

3.The outcome
That could mean only one thing: failure

3.The outcome
In September 2006, BenQ decided to declare insolvency of its new company, leaving european employees and subsidiaries on their own.

3.The outcome
• 3000 Germans and 400 Poles loose their job in Benq Mobile

3.The outcome
• 2 factories in Germany closed
• software development center closed in
Wroclaw

3.The outcome
• a 35 mln euro found created by
Siemens to calm down angry employees

4.Final analysis
What went wrong?
What do YOU think?
(Was it the „Hello Kitty Phone”?)

4.Final analysis
Currently the key to success and domination on the market is not simple.

4.Final analysis
It consists of things like megapixels, bits, optical zooms, and breathtaking designs.

4.Final analysis
For example Samsung has just introduced a phone with a
10 megapixel camera…

4.Final analysis
The main problem was the phones were too simple…

4.Final analysis
Not enough megapixels
Not enough bytes
Not enough functions
+ questionable marketing

4.Final analysis
All phone manufacturers need a breakthrough model.

4.Final analysis
Motorolla has its “RAZR” – pioneer design helped the company reach third place in market share.

4.Final analysis
Nokias` 3310 model was sold in a massive number of 130mln.

4.Final analysis
Not to mention designer 7 series, business E series and powerful multimedia N series

4.Final analysis
Benq simply missed out in that field, having nothing special to offer…

THANK YOU