Schneilder Electric and the Power Backup Market In India Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Schneilder Electric and the Power Backup Market In India Case Study Solution

Implementation

It is recommended to Schneider Electric to adopt the third alternative, which is to acquire a local company. India is a developing country and carries the huge potential market. (See exhibit 2 for UPS usage in India). In India, the electric breakdown and the voltage fluctuation are common issues that the citizens face on daily basis. It is a great opportunity for Schneider to save its market share, because the economy is in its growing phase. Schneider Electric can implement this alternative by going through the full process of acquisition. Firstly, by analyzing the target companies by evaluating their financial statements and ratios. Negotiating with the targeted segment companies on the basis of some grounds and offering them appropriately. Choosing the company with better financials, which would eventually lead the company to enhance its speed of growth. After signing the contract, the process of asset evaluation and labor evaluation begins, which helps in choosing the skilled labor who work for the shared goals. (David Ernst and James Bamford, 2005)

In this case, it is further discussed that Schneider Electric wishes to enter into acquisition with luminous local firm. Luminous firm is engaged in many business and has planned to seek an entrance in all type of businesses related to the energy management system. Not only does Luminous have a strong market share in the inverter market, but it also carries a better goodwill. Luminous has a strong supply chain system and skilled labor.

Schneider Electric, to save its market share in the inverter market, must consider this type of opportunity for the purpose of having a boosted up growth. This would not only share both of the companies ‘market interest, but would also provide them control over the Indian inverter market segment. Hence, it is recommended for the company to apply the third alternative for speedy growth in the inverter market. This alternative will prohibit the company from compromising its global product standards, along with maintaining the cost cutting strategy.

Appendices

Appendix-1: Pros and Cons of Suggested Alternatives

Alternatives	Pros	Cons
No Change	Ø No need of further investment Ø Core competency Ø Maintaining global standards Ø Remain top in market- avoid competition	Ø Potential Indian market loss Ø Costly for customers
Develop Low Cost Product	Ø Attracting potential Indian market Ø Capture growing market	Ø Loss of technology Ø Further investment Ø High threat competition Ø Global standards lost
Acquire or Ally a Local Firm	Ø Experienced staff- knowing needs of local customers Ø Faster growth Ø Capturing local firm’s customer	Ø Huge investment require Ø Sharing technology Ø Communication problems