The business environment is overly competitive. The implication is that businesses haveto come up with various strategies that seek to ensure that they succeed. Adoption of appropriatestrategies calls for businesses to undertake strategic planning. Strategic planning involves relyingon the available data to formulate plans on how to achieve the objectives of the business. It callson […]
To start, you canThe business environment is overly competitive. The implication is that businesses have
to come up with various strategies that seek to ensure that they succeed. Adoption of appropriate
strategies calls for businesses to undertake strategic planning. Strategic planning involves relying
on the available data to formulate plans on how to achieve the objectives of the business. It calls
on the management to align shareholders as well as employees with the goals of the organization.
The goals have to be grounded on data as well as sound reasoning. Strategic competitiveness in
any industry can only be achieved through strategic planning. An effective strategic plan ensures
that the business is able to allocate the resources in a manner that fosters growth. The paper
analyzes the business-level strategies and corporate-level strategies that should be implemented
by Schneider Electric U.S. in order to achieve its goals.
Business-Level Strategies
Business-level strategies are strategies adopted by a business with the goal of creating a
difference between the company and its competitors (Ireland, Hoskisson, & Hitt, 2012).
Schneider Electric U.S. is a company that offers electrical solutions in the United States and
globally. The company is founded on the ideals that businesses can only be powered through
energy. Electricity and energy are therefore important for economic growth. The industry is
highly competitive, and this means that Schneider Electric U.S. needs to embrace business-level
strategies that aim to ensure that it outdoes its competitors. In developing a strong business-level
strategy, a company needs to define whether it wants to undertake activities differently or
undertake different activities.
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Schneider Electric U.S. has embraced the strategy of doing activities differently. The company
has embraced sustainability and efficiency as its core goal. The company offers tailor-made
solutions that seek to meet every consumer’s needs. The aim is to ensure that every consumer
has access to decarbonized and decentralized electric energy. In the world today, electricity has
become an important part of life (Schneider Electric Global, 2018). Devices in the modern world
use electricity, and this means that the demand for electricity has gone up. The demand for
electricity has also introduced a new problem relating to sustainability. There is a need to
conserve the environment and ensure that more consumers switch to renewable sources of
energy. Schneider Electric U.S. has stepped up by offering energy-efficient solutions to
consumers. It offers energy management solutions that ensure that consumers conserve energy
while switching to environmentally friendly solutions.
Evidently, Schneider Electric U.S. has adopted a differentiation strategy. Differentiation
is a strategy that involves producing products and services that will be perceived as different by
the consumers. Unlike cost leadership, differentiation seeks to serve the needs of the consumers
by creating products that differ from those produced in the market (Schneider Electric Global,
2018). Differentiation introduces products that are valued by consumers owing to the importance
attached by the consumers to certain needs (Woo et al., 2014). Consumers tend to be loyal to
certain products based on the perceived value they get from these products. Schneider Electric
U.S. has focused on ensuring that its products are differentiated and, in so doing, ensuring that it
achieves customer loyalty. Differentiation strategy aims to ensure that the company can charge a
premium price. Unique products are priced higher than ordinary products.
In the recent past, most consumers have become increasingly aware of the adverse effects
that various activities have on the environment. Research indicated that consumers are willing to
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pay a higher price for products that they perceive to be environmentally friendly. From a
consumers perspective, electricity must have certain important characteristics. The
characteristics include power quality, reliability, and environmental impact. A differentiated
product in the electricity industry can be defined by its non-price attributes. A company that
seeks to survive in the electricity industry in the wake of recent developments must ensure that it
supplies products that are differentiated and cost-effective. The strategy adopted by Schneider
Electric U.S. will therefore guarantee success in the long run. The integration of renewable-
energy development coupled with the reduction of greenhouse gas emissions will help Schneider
Electric U.S. attract new consumers as well as ensure that it achieves high levels of customer
loyalty.
Corporate Strategy
A corporate strategy is a strategy adopted by a player in the market in order to cooperate
with other firms and achieve certain shared goals (Ireland, Hoskisson, & Hitt, 2012). When a
firm cooperates with other players, it is able to lower the prices while at the same time ensuring
that it creates value for the shareholders. Schneider Electric U.S has adopted strategic alliance as
its primary corporate strategy . A strategic alliance is defined as a situation where companies
combine their resources with a view of achieving a competitive advantage. When firms engage
in strategic alliances, they are able to share and exchange resources. Strategic alliances enable
firms to partner with other firms and, in so doing, develop additional resources and capabilities.
Many firms in the business world rely on strategic alliances in order to achieve success. The
cooperative strategy ensures that companies gain a collaborative or relational advantage.
There are three types of strategic alliances. They include joint ventures, equity strategic
alliances, and nonequity strategic alliances. Joint ventures involve firms creating a legally
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independent company (Ireland, Hoskisson, & Hitt, 2012). Equity strategic alliances are formed
by two or more firms that own different shares of the new company formed. Nonequity strategic
alliances involve sharing a set of unique resources. In the case of Schneider Electric U.S, the
company has formed a joint venture. Schneider Electric U.S has entered into a joint venture with
SUEZ. The two companies entered into a joint venture with the aim of offering joint innovative
digital solutions. The two formed a company that offers innovative solutions in the management
of the water cycle. The joint venture develops and sells unique software solutions to municipal
water management agencies.
The joint venture has various advantages. Schneider Electric U.S will gain access to new
markets as well as new distribution channels. The company will also benefit from increased
capacity. SUEZ specializes in water management and therefore brings on board various key
advantages. On the other hand, Schneider Electric U.S offers software and energy management
solutions. Through the joint venture, the two companies will form a resilient partnership that is
focused on sustainability. The new venture will help in improving the footprint of water systems
while at the same time ensuring that Schneider Electric U.S achieves the core business goal of
offering sustainable solutions.
The long-term success of Schneider Electric U.S is founded on increasing profitability
and being a leader in the design of sustainable energy solutions. As a result, a joint venture is
beneficial and will help the company achieve its goals in the short run and in the long run. A
joint venture will help in the creation of shared investment. Both Schneider Electric U.S and
SUEZ have contributed a certain amount of capital that has been committed to the new project.
To this end, the financial burden has significantly been reduced. Each company is able to benefit
from the other company’s contribution. Another implication of the joint venture is shared
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expenses. The two companies have contributed to a common pool of resources. The costs
associated with the new project are footed by the new pool of resources. Costs have thus been
brought down significantly. The two companies bring technical expertise and know-how. Then
two companies have specialized in different businesses. The joint venture brings each company’s
expertise on board (Ireland, Hoskisson, & Hitt, 2012). The joint venture is thus likely to be a
success, and in so doing, help Schneider Electric U.S achieve its long-term goals.
Competitive Environment
The main competitor of Schneider Electric U.S is General Electric (GE). GE offers
equipment and energy solutions and competes in the U.S. market and the global market. At the
business level, GE has embraced cost leadership (General Electric, 2020). The company offers
cheap energy solutions to consumers. The company also focuses on ensuring that it embraces
sustainability in the provision of energy solutions. At the corporate level, GE has engaged in a
number of joint ventures. The company has partnered with companies in different nations,
including Russia and the United States. The company has partnered with companies such as
Nycomed and Microsoft. (General Electric, 2020) The partnership with Nycomed is meant to
facilitate the sale of medical diagnostic equipment. The company’s joint venture with Microsoft
resulted in the creation of an independent company Caradigm. Evidently, a comparison of the
two companies reveals that GE is likely to be successful in the long term. The company has
embraced both cost leadership and differentiation at the business level. The company thus offers
low-cost solutions to the consumers, and this makes it to be more attractive compared to
Schneider Electric U.S. On its part, Schneider Electric U.S has solely focused on differentiation,
and this means that consumers pay more for its products. GE has been involved in a number of
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joint ventures with leading companies such as Microsoft. The implication is that GE is likely to
benefit from the strengths of Microsoft.
Market Cycles
In a slow-cycle market, a company benefits since its competitive advantages are not
imitated. In contrast, in fast- cycle market, there is a high degree of instability. The market is
thus complex and highly unpredictable (Ireland, Hoskisson, & Hitt, 2012). Evidently, the
company that would be successful in fast- cycle market may substantially differ from the
company that would emerge successful in slow- cycle market. In a slow cycle market, the
competitive advantage of the company cannot be imitated. As a result, both GE and Schneider
Electric will enjoy their relative competitive advantages. Since GE has a higher competitive
advantage, it is likely to be more successful. In contrast, in a fast-cycle market, the companies
can copy each other’s competitive advantages. Other players can also imitate their strategies. As
a result, it might not be clear which company is likely to be successful in such a scenario.
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References
General Electric. (2020). GE, Microsoft share plans for new joint venture, Caradigm | GE news.
GE | Building a world that works | General Electric. https://www.ge.com/news/press-
releases/ge-microsoft-share-plans-new-joint-venture-caradigm
Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2012). Understanding business strategy concepts
plus. Cengage Learning.
Schneider Electric Global. (2017). Schneider Electric Global | Global Specialist in Energy
Management and Automation. https://www.se.com/ww/en/about-
us/newsroom/news/press-releases/suez-and-schneider-electric-join-forces-to-create-a-
joint-venture-to-strengthen-their-major-role-in-the-development-of-innovative-digital-
solutions-in-the-field-of-water-605c2fe4100183197c339a2a
Schneider Electric Global. (2018). Schneider Electric Global | Global Specialist in Energy
Management and
Automation. https://www.se.com/ww/en/assets/564/document/76308/integrated-report-
2017.pdf
Woo, C. K., Sreedharan, P., Hargreaves, J., Kahrl, F., Wang, J., & Horowitz, I. (2014). A review
of electricity product differentiation. Applied Energy, 114, 262-272.
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