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Schneider Electric Expands In Sensing Challenges and OpportunityFort Wayne (U.S.A), May 12th, 2014
CPET 575 – Management of Technology
P r e s e n t e d B y : M o h a m m a d U m a i r J a f r i & A d e y e m o R i c h a r d
Professor Paul I-Hai Lin
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Company History and Background
Case: Questions & Project Schedule
Corporate Vision and Mission
Description of the Group Businesses
Business Model: Products Lines and Services
Innovation and R&D: Serving Growth in Both Markets
Core Technologies and Smart Grids
Smart Grid and Market Potential
Schneider’s Challenge in Smart Grid Business
Table of Contents
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Other Schneider Electric’s Challenges in Smart Grid
Business Challenges and Risks
Core Technologies and Future Growth Trends
Financial Statements
Conclusion
Table of Contents (Cont)
Source: www.schneider-electric.com
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Company Background and Brief History
Been around for over 178 years ( in 2014)
Origin: French Country, started as iron and steel industry
Inception: Adolphe and Eugene (1836 -1870)
– Iron mine Forges and foundry.
Moving to world market (1870-1918)
– Weapon manufacturing
Uncertainty: 1918-1944
– Involvement in Electricity business.
Source: www.schneider-electric.com
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Company Background and Brief History (Cont.)
A New World: 1944-1960 : Reconstruction of France and civilian development.
The Crumbling Empire: 1960-1981: Charles Schneider's sudden death
Rising to New Heights:1981-2000: Electrical Distribution, Automation and
Control Changed name to Schneider Electric
Building a New Electric World: 2000 -2009: Introduction of ‘new” electric
world in 2004, Increase in revenue and size doubling
Make the Most of your Energy: 2009 –Beyond :Global specialist in energy
management; Launch of “ONE” program to enhance the group’s profile across a normal
business cycle
Source: www.schneider-electric.com
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Case Questions & Project Schedule
1) What are SMART GRID and how they are evolving in the Market?
2) How new business modeling in Schneider Electric is adopted to build upon
new ways of reducing electricity consumption and saving cost?
3) How SMART GRID technology can be seen and help in the next 20 years?
4) How can we integrate current SMART GRID technologies to build new,
cloud technologies? i.e. Core Technologies for up coming years.
5) What will be the impact of adopting and strategizing these technologies
on environment and competition amongst various stake holders.
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Question and Project Schedule
Vision and Mission Statement
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“A World where we all can achieve
more while using less of our
common planet.”
“Help people make the most of
their energy, while providing added
value through building services for
energy and security.” - Annual Report 2013
Source: www.schneider-electric.com
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What Jean Pascal has to say:
Source: www.schneider-electric.com
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Description of the Group Businesses
Partner Business Unit (Formerly Power BU).
Energy Business Unit
Industry Business Unit
Information Technology Business Unit
Building Business Unit
Source: www.schneider-electric.com
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Description of the Group Businesses
Source: www.schneider-electric.com
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Business Models: Product Lines and Services
Source: www.schneider-electric.com
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Electrical distribution Safe: Transform and distribute power
safely
Critical Power & cooling
Reliable: Prevent power outages &
quality variance
HVAC control
Lighting control
Energy monitoring & control
Motor control
Access control
Security
Efficient & productive:
• Measure and control energy,
automate, provide relevant
diagnosis
• Manage processes
• Make all the utilities of any
infrastructure more efficient
Renewable energies
Green: Make the connection of
renewable energy sources easy,
reliable and cost-effective
Interoperability and opennessto third party systemsSoftware integration
Business Model
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Innovation and R&D: Serving Growth in Both Markets
Source: Xantrex Acquisition July 08[online] - Schneider Electric
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Smart grid companies at a glance
• ABB
• Accenture
• Alstom
• Cisco
• eMeter
• Current
Group
• Echelon
• Elster
• GE
• GridNet
• IBM
• Itron
• KEMA
• Landis+Gyr
• S&C
• Schneider
• Sensus
• Siemens
• Silver Springs
Network
• Smart Sync
• Structure
• Telvent
• Tropos
• Ventyx
Highly competitive market because of
the potential growth
Schneider’s penetration is low on
Smart meters
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Schneider’s Energy Solutions
• EcoStruxture
• Energy and infrastructure
• Industry
• Buildings
• Data Centers
• Residential
• Smart cities
• Access to energy
• Smart grid
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Energy Management Focus
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Smart generation
Efficient enterprise
Demand Response
Flexible distribution
Efficient home
Smart Grid Solutions Available products Suits
Feeder Automation
Substation Automation system
Network management software
Volt-VAR Optimization
Power and energy monitoring
system
Software
Telemetry and Remote SCADA
system
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Core Technologies in SMART GRID
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SCHNEIDER’S CHALLENGES IN SMART GRID
Slow pilot program: Pilot program in “smart
cities” not completed ontime.
About a dozen cities in North America – including Boston, Philadelphia,
New York, Seattle, San Francisco and Toronto – are taking the effort
quite seriously.
Too many stakeholders are involved
Financial problem: Lack of resources and financing
is the biggest challenges to get projects off the ground
- Jon Reifschneider, head of the SmartCity initiative for Telvent.
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STRATEGY GROWTH IN SMARTGRID
Majorly through Acquisition: Example Telvent
Telvent smart grid solution
Acquisition of Invensys
Increased project around Cities “Smart Cities”
Ambassador and Odysseus
Seeking contracts:
Nova Scotia Power Selects Schneider Electric to
Implement Integrated Smart Grid
Introduces its electric Vehicle
Schneider Electric Powers up Electric Vehicles with
EVlink Outdoor Charging Stations
Explore their expertise in automation:
Integrate their existing customer to smart grid
network
SCHNEIDER’S SMARTGRID STRATEGY
Schneider’s vision for smart grid can be
grouped into 5 areas:
• Smart generation:
• Smart industry:
• Smarter homes:
• Demand Management and Demand
Response:
• Flexible distribution
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SCHNEIDER’S CHALLENGES IN SMART GRID
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Other Schneider Electric’s Challenges
Highly Competitive market : Firms with strong reputations are getting
involved
Late market entry: Acquired Telvent September 1, 2011
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SCHNEIDER’S POTENTIAL GROWTH THROUGH SMARTGRID
• Energy demand is expected to double by 2050
• Most cities are expected to increase in population
• Energy demand at the time will be focused on efficiency and green energy
Survey Report “76% of Utilities Plan to Procure Grid Data Analytics Software,
Zpryme and Schneider Electric Reports ” by Zpryme and Schneider electric
Partnership with Abengoa “Abengoa has selected a subsidiary of Schneider Electric, Telvent,
to provide the distributed control system (DCS) and solar field control system for its Mojave Solar
Project in US”
Partnership with Areva “PARIS--French nuclear and wind power engineering company
Areva (AREVA.FR) Wednesday said it has picked Schneider Electric (SU.FR) to supply some
equipment for its offshore wind projects”
Schneider’s partnership with IBM: This is aimed at linking buildings from
individual sensors and controls all the way up to the enterprise and fed to the
Smart grid
Cisco Announces Partnership With Schneider Electric: “Together with Schneider Electric Cisco
announced a Canadian partnership that will create new opportunities in the development of smart
buildings and smart communities across Canada, and have a positive impact on the environment by
improving energy efficiency”
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Potential Transformer Upgrade : Annual market for transformer monitoring hardware in the U.S. is
expected to grow from $113 million in 2012 to more than $755 million in 2020.
China’s adoption of Renewable Energy
Policy to reduce GHG emission in China
Demand foe energy efficiency in China
Global adoption and installation of Smart meter : 800 million electric smart meters to be installed globally
by 2020:
High Interest in ‘Smart Cities’
A number of European & the U.S. municipalities have expressed interest in the “SmartCity” offering
Major focus is on low :
Most of Schneider's competitors -- Siemens, Alstom, ABB, GE-- have deep experience in high voltage and
are migrating concepts to the medium-voltage distribution arena
Schneider’s Smart grid Market Potential
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Market shares are shown for the second quarter of 2012 [4].
%
China 73.00
North America 18.00
Europe 6.00
Other 3.00
Smart Meter Deployment
Schneider’s Smart Grid Market Potential
Source:"SmartGrid Deployment Tracker 2Q12
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Schneider’s Smart grid Market Potential
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Schneider’s Smart grid Market Potential
Source: U.S energy information Administration, Annual Electric Power Industry Report
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Schneider’s Smart grid Market Potential
Smart Grid Market Revenue Will Hit $73 Billion Annually By 2020
Source: Navigant Research
S W
T
Strengths
• Worldwide presence with a large customer
base.
• Highly recognize and standardized brand name
and products.
• Widest network of distribution and direct
partner.
• Improving energy efficiency is their key
strategy.
• Built two complementary business model:
Products and Solutions
• Selective consideration of acquisition and, of
investment in companies, joint ventures,
strategic alliance and mergers
Opportunities
• Energy demand is on the increase.
• Prices are rising as demands
• Potential growth in “new economy”. New
economy are the driver of global growth.
Threats
• Exposure to fluctuations in economic growth
cycle
• Strong competitors
• Unforeseen government regulation changes
• Fluctuations in currency
• Price instability
• Unstable interest rate
• Well established competitors
O
Weaknesses
• High numbers of present and future competitors.
• Unpredictable circumstances due to diverse
nature of market and location.
• Unfavorable tax structure.
• High investment in R&D
• Company’s expansion is mainly through
acquisition hence high loan possibility
Strengths and Emerging Challenges
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PESTLE ANALYSIS
Political Factor • Political disturbances
• Risk from social Unrest
• Compliance to different policy (e.g. Waste Electrical and Electronic Equipment
directive (WEEE) )
Economic factor • Presence in mixed global economic environment
• Emergence in new economies
• Fluctuations in economic growth
Social Factor • Social economic and activities are growing due expanding borders
• Promotes cultural diversity
Technological
factor
• Actively contributed to technological development
• Delivers Urban efficiency using technology with trial and tested solutions
Legal factor • Involved in legal proceedings initiated by the European Commission with regard
to an alleged agreement concerning gas insulated switchgears (“GIS”)
• Claim of GBP15M Launch in London High court by Power Networks
• Claims filed against the Group concerning such issues as contractual demands,
counterfeiting, risk of bodily harm linked to asbestos in certain products and
work contracts
Environmental
factor
• Highly dynamic in nature, interaction with both local and international partners
• Work with public organization in charge of electrical and electronic waste
recycling 31
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Stock YTD Prices
Source: finance.yahoo.com
Updated
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Stock Prices 5 Year Retrospective Analysis
Source: finance.yahoo.com
5 Year
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Revenue Retrospective Analysis
Source: www.schneider-electric.com
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EPS Retrospective Analysis
Source: www.schneider-electric.com
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Cash flow Analysis
Source: www.schneider-electric.com
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Organic Growth vs. Reported Growth
Source: www.schneider-electric.com
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Income Statement by Business
Source: www.schneider-electric.com
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Shedd Aquarium
Yale University
Héma-Québec
Golden Gate Bridge
Rockefeller Center
Trusted by Customers World Wide Americas
Source: www.schneider-electric.com 39
Petronas Towers
Sydney Opera House
Two International
Finance Centre
Westin Resort
Kuala Lumpur Airport
Trusted by Customers World Wide Asia Pacific
Source: www.schneider-electric.com 40
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Eiffel Tower
The Kremlin
Byblos Bank
Harrods
Sanoma House
Trusted by Customers World Wide Europe
Source: www.schneider-electric.com 41
ROCKEFELLER CENTER
Petronas Towers
Trusted by Customers & Companies World Wide
Source: www.schneider-electric.com 42
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THANK YOU
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