APC 2004 Annual Report Download - page 15

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Business Presentation
Specifiers and consultants
Specifiers and consultants, such as architects and
building designers, represent an indirect customer
base in that they recommend or include functionalities
in their specifications that channel demand towards
Schneider Electric products. They are key partners for
us as they define the performance, safety and comfort
requirements of Electrical Distribution and Automation
& Control installations and devise innovative solutions
that help inspire our future product development.
Global Strategic Accounts
While distributors and other intermediary partners are
critical to our business, we also sell directly to a wide
range of end users and international OEMs. Our ded-
icated Schneider Global Business Development
(SGBD) unit was created to serve these customers,
who represent a key part of our strategy.
At December 31, 2004, we had more than 100 Global
Strategic Accounts. We constantly look for ways to
improve their productivity by leveraging our expertise
in the microelectronics, pharmaceuticals, food & bev-
erage, automobile and other industries. We also use
SGBD as a spearhead for maximizing the Electrical
Distribution and Automation & Control market's poten-
tial around the world.
Our top SGBD accounts are DaimlerChrysler,
Renault, General Motors, Veolia, Bristol-Myers
Squibb, Nestlé, IBM, Motorola, Caterpillar, Emerson,
Areva, Faurecia, Chevron Texaco, Telefonica, Texas
Instruments and Thyssen Krupp.
To ensure that each global account receives the same
quality of service around the world, we have set up an
organization in which our subsidiaries and regional
agencies can cooperate to standardize the design,
production and installation of the products, equip-
ment, projects and services that our customers need.
In most cases, the relationship is formalized in a com-
prehensive Program Alliance that sets out agree-
ments concerning prices and/or services, develop-
ment and product modifications.
Smaller companies–primarily in electrical distribu-
tion–with a more regional presence, including Eaton,
Hager and Legrand.
Geographic balance
Schneider Electric is present worldwide, with nearly
85,000 employees and operations in 130 countries.
We derive 52% of our sales from Europe, 24% from
North America, 17% from Asia-Pacific and 7% from
the rest of the world.
This base ensures a strong presence in almost all of
our main markets, as well as a platform for rapid
expansion, particularly in Asia.
Customer-focused organization
Schneider Electric streamlined its organization in 2003
to simplify flows between products, markets, Country
Organizations and processes. It is now well positioned
for fast growth, rapid execution and greater efficiency.
The corporate Customer & Market and Product &
Technology divisions put the customer at the heart of
the product development process. The Strategic
Deployment division facilitates the integration of acqui-
sitions and the start up of new businesses. And the
Globalization & Industry division leverages the
Company's global presence to optimize purchasing,
supply chain management, production unit specializa-
tion and localization, and information systems. The
four operating divisions–Europe, North America, Asia-
Pacific, and International & Iberia–enhance our ability
to be both global and local, with international teams.
Rounding out the organization are two functional divi-
sions: Finance & Control - Legal Affairs and Human
Resources & Communication.
Product development centers and R&D
Standards, uses, purchasing power, expectations and
esthetic criteria differed widely from one country to
another. Schneider Electric's R&D is organized glob-
ally to handle this diversity and optimize resources
and skills-particularly as demand shifts towards more
electronics and software.
We have set up global development centers to bring
all of our electrotechnical, electronic, electromechani-
cal, software and other technical competencies togeth-
er and to create technology parks in China, the US,
France and Japan.
Global support centers have also been established in
Mexico, India and China to provide the technical parks
with additional skills and development capacity at a
very competitive cost. Located near emerging market
supplier areas, these centers will play a major role in
reducing product expenses.
This global organization is strategically aligned with
Schneider Electric's international business, which
requires the development of product platforms that
can be deployed around the world. It also allows us to
take advantage of business opportunities worldwide,
and in turn maximize sales and reduce exposure to
economic cycles in our local markets.
International scope
Schneider Electric enjoys leading global positions in
the large majority of its businesses. It is the only play-
er in its industry to focus primarily on Electrical
Distribution and Automation & Control. We have many
rivals, but who are often limited in their scope. The
competition breaks down into three broad categories:
Large non-specialist manufacturers with diversified
business bases, such as ABB, General Electric,
Mitsubishi Electric and Siemens.
Multinational specialist manufacturers in automation
and control, such as Omron and Rockwell Automation.
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