APC 2015 Annual Report Download - page 19

2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 17
OVERVIEW OF THE GROUP’S STRATEGY, MARKETS AND BUSINESSES
1
GROUP STRATEGY ANDMARKETOPPORTUNITIES
continuous innovation, Schneider Electric engineers products and
solutions that help them unlock this potential.
Schneider Electric builds native connectivity into its product
offerings, delivers a full range of digital services to help customers’
extract value from their data and provides and the best customer
experience to its customers and partners.
Leveraging the opportunity from new
economies
Countries in Asia (excluding Japan), Latin America (including
Mexico), the Middle East, Africa and Eastern Europe (including
Russia), which we refer to collectively as « new economies »
will continue to experience accelerated development in the
medium- term as they catch up with more mature economies.
As a result of the industrialization, urbanization, digitization and
development processes that these countries are experiencing, we
expect these markets of their economies to continue to have a
medium- term need for the products and solutions that we
provide. Our goal is to leverage this opportunity by expanding
our geographical coverage in these markets, by increasing our
presence in new cities, and further penetrating these markets, with
mid-market segment offerings that are supported by strong brands
with wide local coverage. We have made a long-term commitment
to, and investment in, these economies.
As of December 31, 2015 , the Group had over 92,338 employees
in new economies and, during 2015, our new economies-based
purchasing and manufacturing costs accounted for approximately
54% of our industrial costs. Schneider Electric is well positioned to
support the medium term needs of new economies in Asia, Africa,
the Middle East, Latin America, Eastern Europe and Russia. The
decision to split our Executive Committee into three management
hubs, a pioneering management decision, allows us to be close to
our customers in all markets – remaining local while being global.
Our long-term commitment helps us build an intimate knowledge
of these markets and we believe that the strength of our brands,
our competitive local supply chain and the development of local
marketing and R&D capabilities are our competitive advantages in
these economies.
Building two complementary business models:
Products, and Solutions
Products and, solutions are different and complementary business
models and we aim to deliver profi table growth in both.
Products allow the Group us to continue to achieve scale and pricing
power. In order to reinforce our leadership position and continue to
grow, we leverage technology to offer connected, market leading
products and to create new opportunities for distributors and direct
partners in a win-win relationship.
Solutions and Services allow us to generate additional growth and
profi ts, lower capital intensity and help reduce cyclicality. They
provide signifi cant opportunities to develop greater customer
intimacy and stickiness through dialogue with fi nal end users, which
in turn helps inform our quest for continuous innovation. The Group
has developed reference architectures for solutions in targeted end-
markets in order to facilitate the smooth integration of our products
and speed up project design and we have a unique software suite
to optimize enterprise performance, StruxureWareTM, providing
our customers with full but simple control and management of their
operations. Schneider Electric also supports the productivity and
peace of mind of our customers with an extensive range of digital
services and maintenance services delivered by a network of over
10, 000 qualifi ed technicians .
Investing in profitable and responsible growth
while driving efficiency
We believe in the high long-term growth potential of our business
and Schneider Electric continuously invests to drive that growth.
This investment is focused on sustained spending on research and
development, as well as on growing our commercial presence and
skills, especially in the fi elds of high value-added technologies and
services.
In addition to our commitment to organic growth, the Group has
invested in, companies, joint ventures, strategic alliances and
mergers that have reinforced our global leadership, provided
skills in geared towards energy management and automation, or
related to local businesses in new economies. Certain of our recent
acquisitions have been of signifi cant size and scope, such as our
purchase of Invensys in 2014, Telvent in2011 or Areva’sDistribution
division in 2010, while other acquisition targets have been more
modest.
In addition to the investments we make to foster growth, driving
effi ciency at all levels of our Company is an equally important focus
for the Group. We continuously seek to generate savings from
purchasing and manufacturing and through improving operational
effi ciency by reducing selling, general and administrative expenses,
while maintaining best-in-class standards in environmental
sustainability and social responsibility.