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Strategy Final PaperMBA 580

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Schneider Electric#Company BackgroundRevenues 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 BusinessSchneider 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 MissionAfter 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 DilemmaWhat 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 StrategyPower 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#ChallengesCompetition 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 StructureBy 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#Schneider Electric is a functional-departmental with geographic diversification. We believe that SE should evolve sooner than later in a Matrix structure, each geographic region, should have their own divisions and department, reporting to the CEO-CFO independently, instead of doing it in this interfaced mode. We understand that that will imply more labor cost and reorganizations, but at the end will allow recognitions of weaknesses and stings more easily. Because, Schneider Electric is becoming global and geographic division is important the use of a matrix is more useful that the ones available.

Currently, Schneider Electric has a vertical organization approach, with a top down management chain.This will promote a bottoms approach or in other words a more organic structural approachStrategy RecommendationsDrive RegulationsSchneider 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#Schneider Electric is a functional-departmental with geographic diversification.

Currently, Schneider Electric has a vertical organization approach, with a top down management chain.This will promote a bottoms approach or in other words a more organic structural approach2013 Schneider Electric Organization ChartHumanResourcesKaren FergusonStrategyMichel CrochonInformation, Process & OrganisationHerve CoureilFinance, Control,Legal affairsEmmanuel BabeauChinaOperations

Zhu HaiGlobalOperations

Julio Rodriguez

Global functionsOperationsBusinesses GlobalSupplyChain

Annette Clayton

Supply chain President & CEOJean-Pascal TricoireNorth AmericaOperations

Chris Curtis

Industry BusinessClemens Blum Professional ServicesBuildingsGlobal MarketingAaron Davis IT BusinessDaniel Doimo Partner ProjectsRetail

EcoBusinessSmart InfrastructureEnergy

CitiesBusiness

LaurentVernereyPartner Business

Philippe DelormeEndUserBusiness Group

LaurentVernereyCSTEric Pilaud

Schneider Electric#This will promote a bottoms approach or in other words a more organic structural approach