Strategy & targets
Positioning as a diversified industrial group
Our positioning as a diversified industrial group is linked to the ambition to generate strong and stable earnings, cash flow and value added. We diversify our businesses in several ways: through our presence in numerous markets worldwide, a customer base spanning a range of sectors with different cycles, and the different business models of our business areas. Diversification enables us to seize diverse growth opportunities and at the same time increase the stability of our company in a volatile environment.
To significantly improve our earnings strength we are applying two levers: implementing clearly defined measures to systematically increase the earning power of the business areas and secure profitable growth while consistently and systematically leveraging synergies within the Group through targeted, cross-business initiatives. In the process we are increasingly focusing thyssenkrupp on profitable capital goods and service businesses in global growth regions and sectors.
Business opportunities are resulting for thyssenkrupp from global market trends that require more and better solutions: Demographic change, urbanization, the rapid growth of mega cities, and globalization mean that global demand is rising (“more”). At the same time the requirements to be met by the solutions offered are increasing (“better”): We need to use resources efficiently, reduce the environmental impact of producing consumer and capital goods, and build more sustainable infrastructure; moreover, increasing digital connectedness around the world requires intelligent products and solutions.
We are customer-focused. We use our engineering expertise to develop tailored technological and business solutions to meet the current and future requirements of our customers and markets and to satisfy the demand for “more” in a “better” way. We do this in many areas with our technologies, materials, industrial processes and services, both in industrialized countries and in emerging markets. This creates value for – and with – our customers and gives us a clear competitive edge.
Successful implementation of the Strategic Way Forward
Our program for positioning thyssenkrupp as a diversified industrial group is the Strategic Way Forward, which we have been implementing rigorously since May 2011:
The four action areas of our Strategic Way Forward:
- Culture change: We work in a matrix structure and have set ourselves high standards in our mission statement. Alongside a strong focus on customers and performance, our interactions are based on a clear set of values, transparency, openness and mutual respect. Reliability, honesty, consistency, integrity, and full compliance with the law and internal policies define everything we do.
- HR strategy: Our HR work is aimed at strengthening cooperation and trust, training, and talent development. We practice a culture that strengthens our employees’ personal responsibility and gives them room for personal development. Integrity is at the heart of all our business activities.
- Performance orientation: For all our businesses we have defined clear targets based on peer benchmarks for earnings, cash flow and value added. The initiatives and measures to achieve them are combined in our Groupwide efficiency program “impact”. The methods and systems of “impact” are a firmly established part of our performance culture.
- Customers and markets: Our aim is to grow with our markets and advance our customers by providing competitive tailored technological solutions that create value for them. To this end we knowingly and systematically use the strength of the integrated Group. A key role in this is played by the initiative to strengthen our brand and our brand promise. This is summarized in our new slogan: engineering.tomorrow.together.
By systematically addressing these four strategic action areas we are steadily improving the financial situation of the Group. That in turn will provide freedom for strategic investments and research and development, and thus for future growth. In the coming years we aim to continue to expand profitably in the emerging growth regions and in the industrialized countries.
Source: Annual Report 2015/2016, p. 35-37