Introduction
Schneider Electric is one of the leading electric firms in the world. The firm was founded in 1836 as an armament firm. The current chairperson of the firm is Henri Lachmann while Jean-Pascal Tricoire is the chief executive officer. It has global market coverage, with its headquarters in Rueil-Malmaison in France and a large operating base at the World Trade Center of Grenoble. The firm’s main products include logic controllers that can be programmed, sensors, uninterrupted power suppliers, variable-frequency drivers, circuit breakers, switchboards, switchgears, and motor controllers. Schneider Electric has managed to expand its operations within the past three decades due to management strategies that are focused on understanding market forces.
Strategic Analysis
When Jean-Pascal Tricoire took over the management position of this firm as the chief executive, he was focused on transforming its performance in order to make it more productive than it was before. The firm moved most of its production activities from France to Hong Kong. The decision to move its production plant was guided by the fact that skilled labor is readily available at relatively cheap costs in Hong Kong. In the year 2012, this firm was able to expand its number of employees across the globe to about 152,384. In the same year, the firm made an attractive profit of about € 1.840 billion. It was able to acquire two firms, M&C Energy Group and SolveIT Software. In the year 2011, this firm acquired eight companies, which is the highest number of firms it had obtained within a year since its foundation. It has also increased its market presence in third world countries, especially in Africa and Asia.
It would be important to understand the factors that could have made this firm very successful over the past decade. The firm has become one of the market leaders in this industry, and given the current trend, it is evident that the company is destined for greater success. As Wall (2010, p. 71) notes, this firm started as a steel, iron, and armaments company. In its early stages, it was known as Schneider-Creusot. During this time, governments around the world were trying to arm themselves, and therefore, the company made good sales. Its products were in huge demand in the local European market and other regional markets. However, this slowly changed, especially after the Second World War. The demand for arms and ammunitions dropped. The sales volume of this firm also reduced significantly. This was worsened by the French government’s move to control the manufacture and sale of weapons. Although the government did not ban its operations, this move reduced the company’s ability to sell its products freely in the market. This firm was almost collapsing, especially when it was forced to operate at losses. The management realized that it had to change its product offerings.
Schneider Electric gambled with various products as a way of identifying some of the most appropriate items it could offer to the market. The management realized that the external environment was very dynamic, and the only way it could remain competitive would be to ensure that it remained dynamic in its operational strategies. The management realized that it had to alter together with the changing environmental factors. Inasmuch as the firm was able to stop the poor trend of negative profitability by the end of the nineteenth century, it was obvious that a lot more still had to be done in order to make it more productive. A positive change was observed in this firm by 2000 when it started acquiring other companies in the electric industry. This trend has continued over the last decade. The firm has been able to acquire over thirty firms within this period. Over the last two years, it has been very productive. It has been keen on adopting emerging technologies, especially since it relocated its production to Hong Kong. The production strategies have also been changed to ensure that it is in line with the prevailing market forces. This has enabled the firm to become innovative in its production strategies, a fact that has improved its productivity.
Schneider Electric’s success in the recent past is directly attributed to the dynamic strategies it has employed. This firm was able to realize that the best way of managing the dynamic environmental factors is to remain flexible to the changing environmental patterns. As Witcher (2010, p. 67) notes, the market forces are so dynamic that it requires firms to find a way of remaining flexible enough to change when a pressing need for modification arises. This is the only way a firm can survive a wave of destruction that is always carried by the force of alterations, especially against firms that are rigid to them. The management must have realized that organizational dynamism is the key to surviving the current market forces.
The recent strategic moves were taken by this firm to identify some of the factors creating dynamism. One such factor is leadership. Since Jean-Pascal Tricoire took over the leadership of this firm, Schneider Electric has been very keen on understanding changing environmental patterns. It has been applying necessary amendments when there is a need for the change. Its production strategies are also demonstrated as creating this dynamism. The firm’s strategies are flexible enough to sustain the changing external factors. The strategies are designed in such a way that they are sensitive to environmental forces. Technology is the third factor identified to be creating change in this organization. This firm has been forced to change its production methods on several occasions because of the changing technological forces. As Wall (2010, p. 78) notes, emerging technologies cannot be ignored by any firm that seeks to remain productive and competitive in the market. This means that firms have to act accordingly in response to changes brought about by emerging technologies. This is what Schneider Electric has demonstrated over the past few years.
Conclusion
Human resource has been identified as the fourth factor creating dynamic organizations. Schneider Electric moved its production plant from France to Hong Kong. This decision was guided by the need to lower the costs of production. The team at Hong Kong has forced this company to change its operational strategies. For instance, although employees in France are more knowledgeable than those in Hong Kong, they were strict with time frames at work and did not tolerate the issues of overtime. However, the employees in Hong Kong are willing to work extra hours as long as they are paid. They are also more willing to learn than French employees are. This firm has to change its human resource management strategies to reflect these changes.
List of References
Wall, S 2010, Strategic Reconfigurations: Building Dynamics Capabilities in Rapid Innovation-based Industries, Edward Elgar Publishers, Cheltenham.
Witcher, B 2010, Strategic management: Principles and practice, Cengage Learning, New York.