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Westinghouse final slides Westinghouse final slides Presentation Transcript

  • PROJECT WESTINGHOUSE ELECTRIC COMPANY, LLC GROUP ANDREW BILLING, DAVID MASSEY, ERIC SCHAEFER, JOEL UPTON DATE 4/27/2010 GROUP NO. SEVEN
  • TOPIC AGENDA Introduction and Overview Business Level Strategy Corporate Level Strategy Issues and Recommendations Summary Questions and Discussion The Nuclear Renaissance Starts Here
  • TOPIC WESTINGHOUSE ELECTRIC COMPANY, LLC SECTION INTRODUCTION + OVERVIEW World Headquarters Owns 77% of the Company 50% chance this stack was built by Westinghouse The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC GEORGE WESTINGHOUSE SECTION INTRODUCTION + OVERVIEW Developed a rotary steam engine after he returned home from the Civil War Began the Westinghouse Electric Company in 1886 as a direct competitor to the company owned by Thomas Edison: General Electric (Westinghouse believed his AC current was superior to Edison’s DC current) WEC revolutionized the world’s power and distribution systems George Westinghouse died in 1914 after founding 60 companies and securing over 350 patents during his lifetime The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC TECHNICAL ACHIEVEMENTS SECTION INTRODUCTION + OVERVIEW The turbines used for power generation at Niagara Falls Video Cameras used during the first lunar landing 1st radio 1st nuclear station power 1st radio plant receivers for home use 1st long range 1st long-range power warning ground radar system lines The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC WESTINGHOUSE TODAY SECTION INTRODUCTION + OVERVIEW What happened to George’s Westinghouse? 1995 - WEC acquired CBS and became known as the CBS Corporation in 1997 1998 - CBS Corp creates new subsidiary dubbed the Westinghouse Electric Corporation to control the intellectual property of the Westinghouse brand and oversee licensing agreements CBS begins to license out the Westinghouse name and logo to companies en-masse with little regard for quality standards Many companies jump at the chance to brand themselves with the historic seal of approval The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC WESTINGHOUSE TODAY SECTION INTRODUCTION + OVERVIEW Active Licensees Include: Westinghouse-home.com Sells garage door openers and intercoms using the Westinghouse brand name Licensed to Linear, LLC Westinghouse Heating and Cooling Sells HVAC systems using the Westinghouse brand name Licensed to Nordyne Westinghouse Solar Lights Sells solar lighting under the Westinghouse Brand Name Licensed to the International Development Corporation The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC WESTINGHOUSE TODAY SECTION INTRODUCTION + OVERVIEW Active licensees continued... Westinghouse Digital Electronics Start up company that has been largely successful by producing quality LCD televisions and related products using the Westinghouse brand name Westinghouse Lighting Corporation Currently sells light bulbs, ceiling fans, and lighting fixtures using the Westinghouse name Formerly known as Angelo Brothers Lighting The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC WESTINGHOUSE ELECTRIC COMPANY SECTION INTRODUCTION + OVERVIEW Westinghouse Electric Company (Westinghouse Nuclear) 1999 - CBS Corp sold its nuclear assets to British Nuclear Fuels (BNFL) owned by the British Government--BNFL operates the newly acquired subsidiary as Westinghouse Electric Company In 2006, BNFL sold its Westinghouse subsidiary to the Toshiba Group which retained the logo and brand name Today, Westinghouse Electric Company (aka Westinghouse Nuclear) is majority owned asset of the Toshiba Group (77%) The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC WESTINGHOUSE ELECTRIC COMPANY SECTION INTRODUCTION + OVERVIEW Westinghouse Electric Company is HQ in Cranberry Township, PA The company provides a vast array of services for the nuclear power plant industry: Supplies Maintenance Automation Construction Design Known as a pioneer in the industry: in 1957 it opened the 1st nuclear power plant in Shippingport, PA WEC components can be found in half of the 435 nuclear reactors across the globe Recently won a bid to build 4 new nuclear power plants in China-- the 3rd generation AP1000 reactor model will be the basis The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC AGENDA Introduction and Overview Business Level Strategy Corporate Level Strategy Issues and Recommendations Summary Questions and Discussion The Nuclear Renaissance Starts Here
  • TOPIC COST VS. DIFFERENTIATION SECTION BUSINESS STRATEGY Westinghouse is pursuing more of a differentiation strategy rather than a cost strategy, based on this “five forces” summary: Few competing firms Threat of Substitutes is high, (“green” energy and fossil fuel sources) Buyer power is high (governments, large corporations) Supplier power is high (few suppliers) High barriers of entry (due to high construction/development costs) The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC DIFFERENTIATION SECTION BUSINESS STRATEGY Very little room to compete directly on cost in the nuclear power industry Nuclear power: Is highly regulated Requires quality parts and accessories Needs to be efficient Needs to be safe The perception of a cheaply constructed plant raises specters of Chernobyl and Three Mile Island The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC CORE COMPETENCIES SECTION BUSINESS LEVEL STRATEGY To build into this strategy, WEC has the following core competencies: High level of customer service Excellent level of R&D Improving Marketing Processes, including: Educational outreach on Nuclear Power Corporate Ethics Energy Efficiencies Low Waste The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC DIVERSIFICATION SECTION BUSINESS LEVEL STRATEGY Westinghouse is divided into three main areas: 1) Designing and start-up consulting for nuclear power plants 2) Creation and development of nuclear power plants, components and maintenance 3) R&D operations for innovation improvements in their nuclear power plant technologies WEC technologies and processes are used in over 50% of nuclear power plants worldwide The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC DIVERSIFICATION SECTION BUSINESS LEVEL STRATEGY WECʼs diversification could be considered constrained, as all three business units share product, technological and distribution linkages Economy of Scope is achieved through skill transfer and being dedicated to a single core business WEC is backwardly vertically integrating in order to support their business from without and within The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC VEHICLES SECTION BUSINESS LEVEL STRATEGY Westinghouse has recently acquired UK Springfield Fuel, a supplier of uranium fuel for plants in Europe: 150 year lease on the facility in Lancashire, UK Produces fuel for both AGR and LWR plants, as well as for Westinghouseʼs new AP1000 reactor Backwardly integrating to provide fuel in addition to their other services The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC COOPERATIVE STRATEGIES SECTION BUSINESS LEVEL STRATEGY Westinghouse has entered into several joint ventures with other companies: Entered into a multi-firm collaboration to assist in the regulatory process for the U.S. Dept. of Energy for the refurbishment and development of new nuclear plants (GE, Exelon, Southern Company) Entered into a joint venture with Toshiba Group, forming the “Advanced Uranium Asset Management” company to secure fuel supplies from Kazakhstan for the growing Asian nuclear power market The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC AGENDA Introduction and Overview Business Level Strategy Corporate Level Strategy Issues and Recommendations Summary Questions and Discussion The Nuclear Renaissance Starts Here
  • TOPIC INTERNATIONAL STRATEGY SECTION CORPORATE LEVEL STRATEGY “At Westinghouse, global strength provides greater value.” global multi-domestic Components and technologies are standardized System configurations and applications are tailored to customer needs The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC MODES OF ENTRY SECTION CORPORATE LEVEL STRATEGY Exporting Lower control, risk and return Precision-made components, fuel and services to customers around the world Licensing and Alliances More control, risk and return License technology to global customers: i.e. KEPCO The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC MODES OF ENTRY SECTION CORPORATE LEVEL STRATEGY Subsidiaries and Joint Ventures Provides for the highest control, risk and return Astaer - Paris, Lyon and Marseilles, France - consulting services CS Innovations - Scottsdale, AZ - digital safety systems upgrades Fauske & Associates - Burr Ridge, IL - testing and consulting services Westinghouse Electric - South Africa - engineering solutions PaR Nuclear - St. Paul, MN - fuel handling systems Westron - Ukraine - total performance capabilities of systems, manufacturing and implementation The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC AGENDA Introduction and Overview Business Level Strategy Corporate Level Strategy Issues and Recommendations Summary Questions and Discussion The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 1 GROWING NEEDS IN DOMESTIC POWER CONSUMPTION SECTION KEY ISSUES + RECOMMENDATIONS KEY ISSUE Growing needs in domestic power consumption Not a single nuclear power plant has been built in the United States since the Three Mile Island incident in the 1970s and America’s demand for power is rising rapidly NUCLEAR POWER CAN HELP FILL DEMAND & WESTINGHOUSE SHOULD BE READY TO PROVIDE IT The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 1 GROWING NEEDS IN DOMESTIC POWER CONSUMPTION SECTION KEY ISSUES + RECOMMENDATIONS WHY IT’S IMPORTANT--External Analysis Political and legal environment has improved Economic: can take advantage of Stimulus Package Porter’s Five Forces: 1 Threat of new entrants Low 2 Threat of Substitutes High 3 Supplier Power High 4 Buyer Power High 5 Rivalry Low The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 1 GROWING NEEDS IN DOMESTIC POWER CONSUMPTION SECTION KEY ISSUES + RECOMMENDATIONS WHY IT’S IMPORTANT--Internal Analysis Sustainable competitive advantage Valuable: more efficient form of energy Rare: not many nuclear power plants relatively speaking Difficult to imitate: very costly to imitate Non-substitutable: many substitutes, but less efficient and produce greater carbon emissions The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 1 GROWING NEEDS IN DOMESTIC POWER CONSUMPTION SECTION KEY ISSUES + RECOMMENDATIONS CORE COMPETENCIES Excellent customer service: “culture of continuous improvement” Implementation of the “Customer 1st” program Strong R&D focus Multiple services offered under “one roof” The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 1 GROWING NEEDS IN DOMESTIC POWER CONSUMPTION SECTION KEY ISSUES + RECOMMENDATIONS RECOMMENDATION Develop domestic nuclear construction opportunities with money provided by American Recovery and Reinvestment Act The President recently announced an award of $8.3B to add 2 new nuclear reactors to Plant Vogtle in Waynesboro, Georgia The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 2 HIGH COST OF CONSTRUCTION SECTION KEY ISSUES + RECOMMENDATIONS KEY ISSUE Nuclear power plant construction is extremely expensive The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 2 HIGH COST OF CONSTRUCTION SECTION KEY ISSUES + RECOMMENDATIONS WHY IT’S IMPORTANT--Corporate Level Strategy Corporate level strategy: Diversification moderate and related-constrained Achieve Economy of Scope: transfer of skills Backward, vertical integration of product lines Modes of entry: licensing to focus on R&D and export of key components The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 2 HIGH COST OF CONSTRUCTION SECTION KEY ISSUES + RECOMMENDATIONS RECOMMENDATION (A) Pursue countries with strong economies and growing population centers China Westinghouse is building 4 nuclear plants now in China The country is projecting 40mKw by 2020 China wants 100 reactors from WEC (“nuclear renaissance”) The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 2 HIGH COST OF CONSTRUCTION SECTION KEY ISSUES + RECOMMENDATIONS India WEC is not present in India India aims to have 25% of its electricity come from nuclear generated power by 2050 It has the vision of being the world leader in nuclear power generation Brazil WEC is not present in Brazil Right now, it only has 2 reactors generating about 3% of the nation’s energy Brazil is largely dependent on hydro which has climatic vulnerability The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 2 HIGH COST OF CONSTRUCTION SECTION KEY ISSUES + RECOMMENDATIONS POWER CONSUMPTION BY COUNTRY (TOP 10) 1 United States 3.873 trillion kWh 2 China 2.859 trillion kWh 3 Russia 985.2 billion kWh 4 Japan 982.5 billion kWh 5 Germany 549.1 billion kWh 6 Canada 530 billion kWh 7 India 517.2 billion kWh 8 France 447.2 billion kWh 9 Brazil 402.2 billion kWh 10 South Korea 368.6 billion kWh The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 2 HIGH COST OF CONSTRUCTION SECTION KEY ISSUES + RECOMMENDATIONS RECOMMENDATION (B) Continue to invest in R&D to reduce cost of plant construction Development of the AP1000 has significantly reduced construction costs AP1000 allows for plant to be build modularly and shipped Less equipment and wiring = less cost Small size = less construction time The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 2 HIGH COST OF CONSTRUCTION SECTION KEY ISSUES + RECOMMENDATIONS The development of future generations of reactors can continue to make nuclear power generation more economically feasible Size difference between the AP600 (Generation II model) and AP1000 (Generation III model): Size of the new AP1000 Size of the old AP600 The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 3 NEGATIVE OPINION OF NUCLEAR POWER SECTION KEY ISSUES + RECOMMENDATIONS KEY ISSUE Public has a negative perception of nuclear energy production--many feel that it is unsafe and unclean-- environmental groups have been able to effectively spread this fear Groups such as Greenpeace and the Sierra Club have spent substantial sums of money to show nuclear energy production as a health and safety risk: The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 3 NEGATIVE OPINION OF NUCLEAR POWER SECTION KEY ISSUES + RECOMMENDATIONS WHY IT’S IMPORTANT Westinghouse must sustain its competitive edge The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 3 NEGATIVE OPINION OF NUCLEAR POWER SECTION KEY ISSUES + RECOMMENDATIONS RECOMMENDATION Invest more in programs to educate the public and government that nuclear energy is safe and environmentally friendly Uranium-235: holds 10 million times more energy than an equivalent mass of coal International Atomic Energy Agency (IAEA): relative to coal mining, nuclear accidents are minor and use of nuclear power is extremely safe The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 3 NEGATIVE OPINION OF NUCLEAR POWER SECTION KEY ISSUES + RECOMMENDATIONS Westinghouse should continue to produce television and print ads directed at the American population to counter the negativity such as this television ad that was released last summer: The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC ISSUE NO. 3 NEGATIVE OPINION OF NUCLEAR POWER SECTION KEY ISSUES + RECOMMENDATIONS Market more aggressively--the stats are powerful IAEA: all of the annual spent fuel can be contained in a soccer field, 1.5 meter deep Nuclear power production in the US avoids almost 700 million metric tons of CO2 each year--this is almost equal to the amount of CO2 that is produced by the total of US automobiles in any given year A pilot and cabin crew regularly flying the Tokyo-New York route is exposed to significantly more radiation than an employee working at a nuclear power plant. Uranium is the only fuel which, when burnt, generates more fuel through reprocessing The Nuclear Renaissance Starts Here The Nuclear Renaissance Starts Here
  • TOPIC AGENDA Introduction and Overview Business Level Strategy Corporate Level Strategy Issues and Recommendations Summary Questions and Discussion The Nuclear Renaissance Starts Here
  • TOPIC SUMMARY + CONCLUSION WEC should pursue the US market and take advantage of the Stimulus Act WEC should continue pursuing China WEC should begin consulting for growth into Brazil and India WEC should continue large investment in R&D WEC needs to invest more heavily into public education programs (domestic and international) WEC should market more aggressively and take advantage of the “green movement” The Nuclear Renaissance Starts Here
  • TOPIC AGENDA Introduction and Overview Business Level Strategy Corporate Level Strategy Issues and Recommendations Summary Questions and Discussion The Nuclear Renaissance Starts Here
  • TOPIC QUESTIONS + DISCUSSION "If some day, they say of me that, in my work I have contributed something to the welfare and happiness of my fellow men, I shall be satisfied.” - George Westinghouse “He was one of the world's true noblemen, of whom America may well be proud and to whom humanity owes an immense debt of gratitude." - 1914, Nikola Tesla, former rival as quoted after Westinghouse’s death The Nuclear Renaissance Starts Here