ThyssenKrupp AG SWOT & PESTLE Analysis

Strength

1. Healthy balance sheet with strong financials: Though the financial indicators show a year on year decline, Thyssenkrupp has managed to remain stable in a tumultuous global economy. Its revenues for 9 months ending on June 30, 2019 stood at € 30.69 billion which is a 2% YOY growth. This decline can be attributed to rebranding costs and increased R&D investments. The EBIT has also incurred a YOY decline of 13 percent.

2. Innovation and technical expertise: Owing to its technical prowess, the company has emerged as one of the largest steel producers in the world. Thyssenkrupp has been the major innovator in the Elevator Industry. The company is currently working on integrating Microsoft’s HoloLens technology in its elevator services operations worldwide.

3. Existing distribution and Sales network: ThyssenKrupp has sales & distribution network in more than 80 countries. It has a diversified global presence with the majority of its 2,200 production sites & offices located outside Germany.

4. Comprehensive business portfolio: ThyssenKrupp has a highly diversified business portfolio and offers carbon steel products like tubes, pipes, heavy plate, tinplate, hot strip, the automotive and construction machinery industries, wind turbines, the automotive and construction machinery industries, domestic and freight elevators, operators of submarines and surface naval vessels, potential operators of chemical plants, refineries, and other industrial plants.

Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

1. Strong R&D network for continuous technology innovation: ThyssenKrupp spent approx. €778 million euros on research and development in FY16 and employs 3,500 associates in R&D across 100 locations globally. Though these upfront investments have placed a burden, it will help in growth of the group in the coming years and give it the competitive edge in technology and innovation. The company’s patent portfolio contains more than 18,000 patents and utility models with 2,000 intellectual property rights (IPR) registered in FY16.

2. Technology collaborations for accelerating innovation: Technology collaborations and partnerships with leading industry players are a key factor which help in accelerating innovation. ThyssenKrupp has entered into strategic partnership with Microsoft relating to MAX, its predictive maintenance solution for elevators. The company uses Microsoft HoloLens, the self-contained, holographic computer which helps the technicians during the maintenance cycle.

Legal

1. Restructuring of compliance systems following violations: Compliance systems need to be updated and in place so that a strong framework is established and potential violations or risks are identified at an early stage. The Bremen public prosecutor office had launched an investigation into Thyssenkrupp’s Atlas Elektronik GmbH for bribery of foreign official and tax evasion connected to naval projects in several countries. In June 2017, the German court ordered ThyssenKrupp to pay a fine of about €48 million with regards to the above violations. Thus ThyssenKrupp needs to strengthen its risks and compliance systems to prevent future occurrences of similar incidents.

Environmental

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