Schneider Case Study Competition
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Imperium 2010 presents Schneider Case Study Competition Imperium 2010 About the company From 1836 to today, Schneider Electric has transformed itself into the global specialist in energy management. Starting from its roots in the iron and steel industry, heavy machinery, and ship building, it moved into electricity and automation management. After 170 years of history, Schneider Electric has become today the solution provider that will help you make the most of your energy. As a global specialist in energy management with operations in more than 100 countries, Schneider Electric offers integrated solutions across multiple market segments, including leadership positions in energy and infrastructure, industrial processes, building automation, and data centres/networks, as well as a broad presence in residential applications. Focused on making energy safe, reliable, and efficient, the company's 100,000+ employees achieved sales of more than 15.8 billion euros in 2009, through an active commitment to help individuals and organisations “Make the most of their energy”. Schneider Electric India Pvt. Ltd (SEI) is a 100% subsidiary of Schneider Electric Industries SAS, a global specialist in energy management. With a strong force of over 8400 employees, the company is well known for its unique vision, progressive management and above all, its exemplary Quality. (See Exhibit A) Energy and climate change The energy dilemma: Achieving more while reducing carbon emissions and using fewer resources The fact is, we have to cut the world’s CO2 emissions in half by 2050. However, energy demand – a major source of CO2 emissions – will double by that date. Renewable energy sources are mandatory but not enough to change the energy mix today. Energy demand by 2050, Electricity demand by 2030, (Source IEA 2009) CO2 emissions to avoid dramatic climate changes by 2050 (Source IPCC) To find out, let’s take a look at the world in 2030 8 billion inhabitants, 60% will live in cities 2 billion will join the middle class Demand for electricity will be 76% higher than in 2007 China and India alone will represent over 50% of incremental energy demand 1.3 billion people will not have access to electricity, mostly in Africa and India Electric vehicles will represent 60% of world share in passenger vehicle sales Renewable energies will have a 22% share in the global energy mix (Sources Robert Garner - Trends compendium -2008, World Energy Outlook 2009 - AIE / OCDE) Imperium 2010 Access to Energy is a pre-requisite for growth and human well-being. Access to Energy not only improves quality of life in terms of education and family well-being, but also facilitates better access to economic development. Energy has a determinant influence on Human Development Index (HDI) as its goals rely on Energy for their fulfilment. 1.6 billion people the world over are classified as Energy Poor*. Out of these, 500 (31%) million people live in India alone. (UNDP Report) Schneider Electric’s unique position as the global specialist in Energy Management provides the opportunity to influence and consequently improve the lives of these millions by providing them access to Safe, Reliable and Green energy. *energy poverty is a term for lack of access to electricity, heat or other forms of Power Schneider Electric’s BipBop Program Schneider Electric launched a global initiative in 2008 to provide access to Safe, Reliable and Clean electricity to the Energy Poor. This initiative builds upon a sustainable and responsible vision called BIPBOP, an acronym for Business, Innovation and People at the Base of the Pyramid. With a strong commitment to involve and empower local communities and stake holders in each country, BIPBOP addresses the three key challenges which are major barriers for access to energy: Challenge Solution Access to financial resources for entrepreneurs Funding Appropriate products & services Innovative products and services Skills and expertise Technical and business trainings BIPBOP aims to create a brighter future by increasing income levels, reducing health concerns and promote usage of renewable energy. Imperium 2010 BIPBOP – A Market based approach to provide safe, reliable and clean electricity to BOP Business: Schneider Electric has created a global, socially responsible venture capital fund called Schneider Electric Energy Access, with an initial capital of €3 million. The fund’s mission is to support the development of entrepreneurial initiatives worldwide with a goal to help people obtain Access to Energy. Created with the backing of Crédit oopératif, Schneider Electric Energy Access will finance projects designed to: - help jobless individuals create businesses in electrical space - promote the development of businesses that provide access to energy in rural or suburban areas, support the deployment of innovative solutions that use renewable sources in order to increase access to energy for the Base of the Pyramid The Product of innovation Schneider Electric India launched In-Diya; a highly energy-efficient LED based Home Lighting System, to provide access to light for people living without reliable electricity supply in India. In-Diya operates on grid/solar supply, and provides backup ranging from 8 – 15 hours. In-Diya is available in nine variants, starting with a basic 45 LED light which can be powered by an externally charged battery to an independent 90 LED Solar Home Lighting System compatible with grid. Priced in the range of INR 550 to INR 4,500, In-Diya LED based Home Lighting System is set to be available on retail counters. (See Exhibit B) In-Diya can also be accessed in a pay-per-use variant. Customers can buy the basic variant for INR 550 and rent a battery at a nominal charge from an entrepreneur who manages a Battery Charging Station. (See Exhibit D) The battery charging model creates employment opportunity for unemployed youth in rural areas and slums. Schneider Electric has completed pilot projects for Battery Charging Station in Orissa and West Bengal and has successfully improved the lives of 200 families so far. Schneider Electric has enabled the children to continue their education and adults to remain economically productive after sunset Schneider Electric In-Diya is helping people shift from Kerosene Lamps to Electric Lights at reduced operating costs thus benefitting the health of the people and the environment To further improve reach to the rural market, Schneider Electric is following an innovative business model that involves partnering with NGOs, microfinance institutions and local entrepreneurs. For the People By 2012, Schneider Electric India aims to provide vocational electrician training to 4,000 young unemployed school and college dropouts, and support 300 new entrepreneurs from “The base of the Pyramid” to start their own business in electrical market. (See Exhibit C) This initiative is aimed at developing the people at the Base of Pyramid by providing them the opportunity to be self-reliant. It also resolves the issue of availability of skilled manpower in the electrical market. Imperium 2010 In 2009, Schneider Electric India Foundation trained 300 unemployed youth in 11 training centres spread across six states in India i.e TamilNadu, Karnataka, Andhra Pradesh, Orissa, Bihar and Delhi. Schneider Electric India foundation will start 10 new training centres during 2010. The duration of the training program is four months and it is provided free of cost to school and college dropout students from poor families. Apart from technical training, the candidates are also trained on entrepreneurship to start their business in providing access to electricity to Bop. Schneider Electric provides all necessary support to the trained candidates to start their business Problem Statement Analysing the above mentioned scenario and product, develop a Go-to-Market Strategy and distribution channel structure for the product In-Diya. The solution should concentrate on the Place, Promotion, Channel, and Communication. Exhibits Exhibit A The history of Schneider Electric in India 2010 - Acquisition of Zicom's electronic security systems integration business 2009 - Launch of Bip Bop Sustainable Development Programme Acquisition of Conzerv (leader in Metering & Energy audits) Acquisition of Meher Capacitors (leader in Power Factor Correction) 2007 - Introduction of APC and Pelco 2006 - Establishing Projects and Services, For turnkey solution, Hyderabad factory 2005 - Introduction of TAC and VDI 2004 - Integration of Clipsal business 2003 - Inauguration of Baroda factory, SISC / GTCI, entering into residential market with UT offer 2002 - Establishment of Solution and Application Centre for Automation Projects 2000 - S & S Switchgear & CGLV acquisition 1995 - Schneider Electric : 100% subsidiary 1984 - J V With TMC 1963 - J V With Tata MG Imperium 2010 Exhibit B Product: In-diya Features Benefits • 8 Hours backup with 5AH •No need of candle or Battery kerosene lamp • Light output is more than •Free from darkness due to 11W CFL power cut • Consumes 50% of power • No need of emergency compared to 11 Watt CFL lamp • Can illuminate a room of • No requirement of inverter 12’ x 12’ for all normal for lighting activity •Saving in electricity bill • Can operate on very low •Same brightness at lower voltage -90V-250 Volt AC voltages • 50000Hrs of LED life •Lower cost compared to •Can operate on AC and/or CFL based solar home Solar lighting system •Light powered by AC can be upgraded to a solar powered or vice versa Application: Home