Wood siding rests on concrete pad. What are the alternatives?

If the height of the door to the bottom of the siding is any clue as to how high the floor slab is above the outside concrete, The siding could have been kept above the concrete perhaps 1" and still would cover the floor slab for weathering.

This will be an over-simplification, but to fix it, I would carefully cut the siding 4 1/2" above the concrete, add flashing, and insert a piece of 1 1/2" X 3 1/2" PVC material as a "frieze board" to replace the rotted siding. If you re in a temperate climate, like the new england area the PVC will move a lot so it may be best to use a wood product that is primed on all sides, including all cuts. Installed so when it is raised to meet the flashing, it provides a 1" gap to the concrete.