1.Strategy Final PaperMBA 580 1

2. Company BackgroundRevenues Schneider Electric is a 177 year old multinational company with annualrevenue of 24 billion Euros.PeopleSchneider Electrics has offices worldwide with more than 140,000employeesCoreBusinessSchneider Electrics core business units are Power, Infrastructure,Industry, IT, and BuildingsSchneider Electric 2 3. Company History Roots Schneider Electric started in the iron and steel industry, heavy machinery,and shipbuilding.Transition The company gradually moved into electricity and automationmanagement.Since 1836 to today, Schneider Electric has transformed itself into theglobal specialist in energy management.Company MissionAfter 170 years of history, Schneider Electric has become today thesolution provider that will help you make the most of your energy.Schneider Electric3 4. Energy DilemmaWhat the International Energy Agency says With good energy efficiency programs implemented between 2012 and2035, the need for 230 gigawatts of energy from coal-fired power plants andanother 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 energydemand 1.3 billion people will not have access to electricity, mostly in Africa andIndia Electric vehicles will represent 60% of world share in passenger vehiclesales 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 4 5. Current StrategyGlobal Outreach The company strives to be the global specialist in energy management. Presence of the companys products is currently not in every corner of theworld.Growing Economies Targeting growing economies such as Brazil, Russia, India and China(BRIC) Deliver electricity to communities that have no or low access to powerSecuring Raw Material Increasing operations in countries that mine metals such as gold,platinum, copper, nickel etc.Schneider Electric 5 6. Current StrategyPower Reliability Investment in Smart Grid technologies by making components enhancingpower reliabilityEnergySolutions Providing solutions to customers to improve their energy efficiency such as Ford saving up to 30% on energy consumption based onSchneider Electric products and servicesAcquisitions Ongoing acquisitions of different services and products that complete thecompanys energy solutions packagesSchneider Electric6 7. ChallengesCompetition Highly competitive market with ABB, Honeywell, GE, Johnston Controls,Eaton, Rockwell Automation, and Siemens all having cutting edgeDiverseOperations With so many recent acquisitions, Schneider Electric needs to consolidateits companiesEnergyDilemma Schneider Electric is operating constantly in a highly challengingenvironment with growing energy demandSchneider Electric7 8. Strategy Recommendations SwitchtoMatrix Structure Currently, the company is at life cycle stage of elaboration that matcheswith the structure proposed (Matrix) and responses to the challenges andthreats of current times. A matrix structure will allow the integration of different regions of the worldmore efficiently with each key department of the organization.Dual Mechanistic and Organic StructureBy introducing more horizontal structures, the company will encouragedecentralization of power, and consequently decision making is delegated tomiddle and lower level managers. With a dual mechanistic and organic type structural strategies, thecompany can deal better with structural changes in a smoother fashion.Schneider Electric8 9. Strategy RecommendationsDrive RegulationsSchneider Electric should participate in driving policy in Washington DC sothat the market is regulated by greenhouse gas reduction mandates.Schneider Electric will get opportunities to sell more of its services andsolutions.Penetrate the India and China market The company is currently not penetrating into this growing economicsector as much as the market in this region is growing.Schneider Electric 9 10. 2013 Schneider Electric Organization Chart President & CEO Jean-Pascal TricoireGlobal functionsSupply chainBusinesses OperationsGlobalSmart Finance, Control,SupplyInfrastructure Global Legal affairsChainOperations Emmanuel Babeau Cities Energy BusinessJulio RodriguezAnnette ClaytonEnd User Professional Human LaurentServices Resources BusinessVernerey Karen FergusonGroupBuildings Laurent VernereyIndustry Business Information, Process Clemens Blum &Organisation Herve Coureil IT Business Daniel Doimo North America StrategyOperationsPartner Partner Projects Michel CrochonBusinessChris Curtis RetailPhilippeDelorme EcoBusinessChina Global MarketingOperations Aaron DavisCSTEric PilaudZhu HaiSchneider Electric 10