Businessmodel of Schneider Electric

Customer Segments

Schneider Electric has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at consumers and businesses.

Value Proposition

Schneider Electric offers three primary value propositions: accessibility, innovation, and brand/status.

The company creates accessibility by providing a wide variety of options. It has acquired several firms since its founding, including Telvent, Triconex, Summit Energy, TAC, and M&C Energy Group. This strategy has enabled it to expand its capabilities and diversify its portfolio.

The company embraces innovation as a part of its culture. Its innovative efforts include the following:

Connected Products – The company incorporates smart, connected technology into all of its device (UPS, drives, energy storage, MV switchgerar, LV panels, circuit breakers, and remote terminal units) so they are able to digitally transmit data.

Edge Control – The company overlays connected products with software and hardware to make real-time control and automation decisions at the local, operational level.

Apps, Analytics & Services – The company‘s enterprise-level software, analytics, and applications take the data aggregated from the levels described above and transform it into operational intelligence.

The company has established a strong brand due to its success. It has over 170,000 employees and generated revenues of €25 billion in 2016. It serves customers in more than 100 countries. Lastly, it has won many honors, including the following:

• Ranking at #5 in Gartner’s list of Top European Supply Chain Organizations (2016)
• Recognition as one of America’s Best Large Employers by Forbes (2016)
• Recognition as one of the World’s Most Ethical Companies by Ethisphere (2016)
• Recognition as one of the World’s Most Admired Companies by Fortune (2015)
• Ranking in the Brand Finance Global 500 (2015) ### Channels

Schneider Electric’s main channel is its direct sales team. It also sells its products through a network of electrical equipment distributors with a collective 15,000 sales outlets.

These distributors account for 50% of its overall sales and 70% of catalogue product sales. The company promotes its offerings through its website, social media pages, and participation in trade shows and conferences.

Customer Relationships

Schneider Electric’s customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:

Support Services – The company offers phone and e-mail customer service.

Training Services – The company offers customized training programs on its offerings for customers. The courses combine onsite training with hands-on sessions, 3D training, and eLearning. The company also enables clients to obtain certifications as demonstration of their knowledge – specifically Data Center Certified Associate (DCCA) and Professional Energy Manager (PEM).

Despite this orientation, there is a self-service component. Schneider Electric operates Energy University, an eLearning program that offers over 200 training modules on a self-paced basis.

The company’s website also provides a number of useful resources, including white papers, infographics, videos, product documentation, a BIM library, and a product substitution tool. Lastly, the site provides answers to frequently asked questions and access to an e-mail newsletter.

Key Activities

Schneider Electric’s business model entails designing and developing its energy management and automation products for customers and delivering related services.

Key Partners

Schneider Electric’s key partners are the electrical equipment distributors that participate in selling its products through over 15,000 sales outlets. The company also has the following partners:

• General Partners – The company collaborates with various types of firms to complement its energy management and automation solutions. Specific partners include IBM, Microsoft, Cisco, and ESRI.
• Panel Builders – The company works with panel builders that use its components and services to design, build, test, and sell Low Voltage switchboards and Medium Voltage cubicles.
• Contractors – The company works with contractors, electricians, and installers that utilize its products for their customers.
• System Integrators – The company works with service providers that promote its products to their customers.
• Original Equipment Manufacturers – The company works with manufacturers that incorporate its components and products into their offerings to enhance them. Partner benefits include training, special promotions, rewards, and invitations to industry events.

Key Resources

Schneider Electric’s main resources are its human resources, namely the engineering employees that design and develop its solutions, the sales employees that promote them, and the training employees that provide instruction.

It places a strong emphasis on intellectual property, with 20,000 issued and pending patents worldwide.

Cost Structure

Schneider Electric has a value-driven cost structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is likely cost of goods sold, a variable expense.

Other major drivers are in the areas of sales/marketing, a fixed cost, and cost of services, a variable expense.

Revenue Streams

Schneider Electric has one revenue stream: revenues it generates from the sale of its products to customers.