Schneider Electric Expands In Sensing Challenges and …lin/PresentationsMS-TechnologyCo… · · 2014-05-13Schneider Electric Expands In Sensing Challenges and Opportunity

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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.


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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


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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


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What Jean Pascal has to say:


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Partner Business Unit (Formerly Power BU).

Energy Business Unit

Industry Business Unit

Information Technology Business Unit

Building Business Unit


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Business Models: Product Lines and Services


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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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Source: U.S energy information Administration, Annual Electric Power Industry Report

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Smart Grid Market Revenue Will Hit $73 Billion Annually By 2020

Source: Navigant Research

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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

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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


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EPS Retrospective Analysis


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Cash flow Analysis


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Organic Growth vs. Reported Growth


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Income Statement by Business


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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


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Eiffel Tower

The Kremlin

Byblos Bank

Harrods

Sanoma House

Trusted by Customers World Wide Europe


ROCKEFELLER CENTER

Petronas Towers

Trusted by Customers & Companies World Wide


http://www.digitalrealtytrust.com/default.asp

http://www.thebreakers.com/

http://en.wikipedia.org/wiki/Image:LIU_logo.png

http://www.aalborgsygehus.rn.dk/

http://www.meei.harvard.edu/

http://www.fourseasons.com/hongkong/

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THANK YOU

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Schneider Electric Expands In Sensing Challenges and …lin/PresentationsMS-TechnologyCo… · · 2014-05-13Schneider Electric Expands In Sensing Challenges and Opportunity