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Transcript of PPT 2
Background 2. Market 5. Logistics Organization Schneider Electric By Hunters Group: Yue shen, Rui Guo, Yiran Zhang, Mingfei Liu, Piyush Laddian The Market: power conversion equipment manufacturing
Number of Company: 880
Whole Revenues: $10,666.3 million in 2012 in the US market
Schneider Electric SA earned 559 million dollars
in 2012who owns 5.2% market. 2.1 Size of the Market Company Position Strategy Schneider Electric SA is a challenger in this industry.
What to do next:
Improve its market share to defense threat from companies in the follower place and challenge companies in front of it.
The ultimate goal for Schneider Electric SA should be a challenger or even the leader in this industry. 2.3 Challenges and opportunities associated with the market No direct substitute to power equipment
Some other types of fuels Capital requirements
Economies of scale
Switching cost is high
Patents Cost of materials is the largest industry expense, estimated to represent about 45.0%
Energy crisis has become a huge issue
Price is higher
Cooperating with suppliers in a long-term period Conclusion:
The supplier power in this market tends to be high. Conclusion:
The threat from substitutes is low. Conclusion:
The threat from potential entrants is low. An oligopoly market (five major companies account for 42% of the total sales)
Buyer power weakened, because of suppliers’ monopoly power
Products similar to some extent, bargain
High switching cost Conclusion:
Buyer power can be considered moderate. 880 companies compete, rivalry is intensive
Exit barrier is high. Conclusion:
Tndustry rivalry is high. Largest competitor: GE 4. Key Competitors Threats:mainly come from supplier power and competitors
Challenges: raw material challenge, declining in world economy, and surpass by competitors
Opportunities: Needs in emerging countries, regulation of energy consumption Challenge and Opportunities 3. Market Position 5.2% of power conversion equipment manufacturing market
Sales: 37%*$28.99 billian=$10,725.90 3.1 Market Percentage and Sales No open new markets
Purchasing other companies to strengthen its different business sectors.
Developing in emerging markets
Developing Technology, making energy more efficient and smarter and helping the society develops sustainably 3.2 Development Strategy Acquisition, not build up new branches
Four major acquisitions in 2011 3.2.1 Maintain the Power Four Major Acquisitions in 2011 And Steck Group, a Brazilian in final low voltage products 1.1 Company Origin Energy & Infrasture
Data Center & Networking
Residential 1.2 Lines of Business Two Major Operation Areas
Schneider Electric makes full use of international teams and encourages exchange of knowledge and experience among employees. 1.3 Current Operations Goal: Improve quality of products while decreasing energy consumption and preventing energy supply from interruption
Power management 1.4 Technology Finance
income statements ：revenue $28.99B
balance sheet ：current ratio 1.44
debt ratio ： 43.05%
supervisory board ：audit
management board : make decision 1.5 Performance Measures 3.2.2 Developing in Emerging Markets Worldwide, focusing on emerging markets Such as South and Central Americas, Russia, South East Asia
Need: 40% of population+ most industrial manufacturing factories 5%of our sales devoted to R&D
385new patent applications in 2011
11 000R&D engineers in the world
400Distinguished technical experts in 22 countries
#1 Smart Building energy management which will bring the company’s revenue from $291 million in 2012 to $1.1 billion by 2020 by Pike Research 3.2.3 Technology Focus: The Power Conversion Equipment Manufacturing Industry in US Focus: The Power Conversion Equipment Manufacturing Industry in US 4.1 Major Players and Market Share 6.1 Challenges 6. Potential Opportunities
and Challenges Rising raw material prices.
Foreign exchange risks.
Major presence in Europe and North America.
High monitoring costs after sales. 6.2 Opportunities BRIC and the rising Asian and African countries market.
Significant improvement in awareness of environment issues.
Growing electronic security systems market.
Tightening Government regulations 5.2 REACH 1. Schneider:
a pioneer company and a challenger in the power management market
More focus on using technology to make energy consumption efficiently, and emerging markets
To maintain its market position, the company needs to improve more on its supply chain operations and make them more effective and sustainable. For You 2. a great company to work for:
Nurturing work environment and customized leadership program
for international student: Schneider is willing to have more students who have multi-culture background. 1 Where does Schneider Electric Originally from?
A. India B. China C. France D. United States POP QUIZ 2. Based on today's presentation, what is the role of Schneider Electric in the power component market?
A. Follower B. Leader C. Challenger D. Laggard 3. To develop, what is Schneider Electric's strategy?
A. Open totally new markets B. Acquisition
C. Close non-profitable branches D. Invest 4. How much annual revenue of Schneider is put into R&D?
A. 5% B. 40% C. 45% D. 50% 4.1 Overview of key Competitors Focus on Power Conversion Equipment Manufacturing Industry in US 4.2Major Competitors of Schneider Electric 4.3 Annual Sales(2011) 4.4 Emerging Competitors As a global specialist in power management, Schneider Electric has cooperation with several markets .
oil & gas, etc. 1.6 Types of interaction 3.2.1 Maintain the Power Entered into security business by acquiring Pelco and Ziocom.
To strengthen its position in power sector, purchased Areva’s distribution business and Luminous inverters.
Diversifying its portfolio in such a way that cross selling opportunities are produced.
14.3% increased of revenue by HOOVER As in 2005,
Countries independent and managing both business and operations.
Poor competencies in planning and transportation.
Service rate on lines below 93 %, Cost on logistics 7 % of P & L, 93 days of inventory.
Customer surveys pointing Logistics as a main weakness of Schneider. 5.1Present Logistics Structure 1. The company has 21 facilities across the United States, Mexico and Canada and around 200 facilities through out the globe.
2. Uses third party to assist in the logistics operation.
3. Recently activated Manhattan’s Warehouse Management (WMS) and Supply Chain Intelligence (SCI) to help it become more agile and supports its global logistics objectives.
4. Radio Frequency Identification(RFID) to play a major role in the coming years. Registration, Evaluation, Authorization and Restriction of Chemical Substances.
According to experts, it is the most complex piece of legislation in Europe.
Key features of REACH.
1. With effect from June 2007, It provided phased requirements over an 11 year period with ECHA.
2. To find substitution for “Substances of Very High concern” ( SVHC) materials.
3. Companies required to notify downstream users to notify the presence of SVHC’s in their products and respond to consumer requests within 45 days.
Schneider’s way of dealing with REACH
1. Identify the role in supply chain.
2. Collaborate with Suppliers.
3. Bring Specialists.
4. Manage Data to make it more visible. Reference