Strategy Final Paper

MBA 580

Company Background
Revenues
Schneider Electric is a 177 year old multinational company with annual revenue of 24 billion Euros.

People Schneider Electrics has offices worldwide with more than 140,000
employees

Core Business
Schneider Electrics core business units are Power, Infrastructure, Industry, IT, and Buildings

Schneider Electric

Company History
Roots
Schneider Electric started in the iron and steel industry, heavy machinery, and shipbuilding.

Transition
The company gradually moved into electricity and automation management. Since 1836 to today, Schneider Electric has transformed itself into the global specialist in energy management.

Company Mission
After 170 years of history, Schneider Electric has become today the solution provider that will help you make the most of your energy.

Schneider Electric

Energy Dilemma
What the International Energy Agency says
With good energy efficiency programs implemented between 2012 and 2035, the need for 230 gigawatts of energy from coal-fired power plants and another 120 gigawatts from gas-fired plants will be eliminated.

The world in 2030

8 billion inhabitants, 60% will live in cities 2 billion will join the middle class Demand for electricity will be 76% higher than in 2007 China and India alone will represent over 50% of incremental energy demand 1.3 billion people will not have access to electricity, mostly in Africa and India Electric vehicles will represent 60% of world share in passenger vehicle sales Renewable energies will have a 22% share in the global energy mix
(Sources Robert Garner - Trends compendium -2008, World Energy Outlook 2009 - AIE / OCDE)

Schneider Electric

Current Strategy
Global Outreach The company strives to be the global specialist in energy management. Presence of the companys products is currently not in every corner of the world.

Growing Economies Targeting growing economies such as Brazil, Russia, India and China (BRIC) Deliver electricity to communities that have no or low access to power

Securing Raw Material Increasing operations in countries that mine metals such as gold, platinum, copper, nickel etc.

Schneider Electric

Current Strategy
Power Reliability
Investment in Smart Grid technologies by making components enhancing power reliability

Energy Solutions
Providing solutions to customers to improve their energy efficiency such as Ford saving up to 30% on energy consumption based on Schneider Electric products and services

Acquisitions
Ongoing acquisitions of different services and products that complete the companys energy solutions packages

Schneider Electric

Challenges
Competition
Highly competitive market with ABB, Honeywell, GE, Johnston Controls, Eaton, Rockwell Automation, and Siemens all having cutting edge

Diverse Operations
With so many recent acquisitions, Schneider Electric needs to consolidate its companies

Energy Dilemma
Schneider Electric is operating constantly in a highly challenging environment with growing energy demand

Schneider Electric

Strategy Recommendations
Switch to Matrix Structure
Currently, the company is at life cycle stage of elaboration that matches with the structure proposed (Matrix) and responses to the challenges and threats of current times. A matrix structure will allow the integration of different regions of the world more efficiently with each key department of the organization.

Dual Mechanistic and Organic Structure

By introducing more horizontal structures, the company will encourage decentralization of power, and consequently decision making is delegated to middle and lower level managers. With a dual mechanistic and organic type structural strategies, the company can deal better with structural changes in a smoother fashion.

Schneider Electric

Strategy Recommendations
Drive Regulations
Schneider Electric should participate in driving policy in Washington DC so that the market is regulated by greenhouse gas reduction mandates. Schneider Electric will get opportunities to sell more of its services and solutions.

Penetrate the India and China market

The company is currently not penetrating into this growing economic sector as much as the market in this region is growing.

Schneider Electric

2013 Schneider Electric Organization Chart

President & CEO Jean-Pascal Tricoire

Global functions
Finance, Control, Legal affairs
Emmanuel Babeau

Supply chain
Global Supply Chain
Annette Clayton
End User Business Group Laurent Vernerey

Businesses
Smart Infrastructure

Operations
Global Operations Julio Rodriguez
Professional Services

Cities Business Laurent Vernerey

Energy

Human Resources
Karen Ferguson

Buildings

Information, Process & Organisation

Herve Coureil

Industry Business Clemens Blum IT Business Daniel Doimo

Strategy
Michel Crochon

Partner Business Philippe Delorme

CST Eric Pilaud

Partner Projects Retail EcoBusiness

North America Operations Chris Curtis China Operations Zhu Hai

10

Global Marketing
Aaron Davis

Schneider Electric