Legrand SWOT & PESTLE Analysis

Strength

1. Growing through acquisition and mergers: Legrand has adopted a two strategies, firstly, expansion through innovation in its products which they refer as internal growth and secondly, acquisitions of leading companies targeted for enlarging market share referred as external growth. Both these strategies have worked favorably for Legrand. Over the time, Legrand has mastered the art of pursuing acquisitions. Legrand has acquired 173 companies since 1953. The French electrical solutions baron successfully integrated and acquired 10 leading companies in 6 different countries between 2018 and 2019. Legrand announced acquisition of Focal Point, a US based company which deals in architectural lightning solution for commercial buildings in February 2020. Acquisition history speaks volumes for Legrand’s growth and the commendable increase in market share worldwide.

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Weakness

1. In the era of e-commerce, Legrand needs to shift sales gear: Although Legrand has been successful in recording higher sales every year as compared to previous one, extending its products over e-commerce has not been done. Leading e-commerce websites have products of Legrand’s competitors listed, some even offer discounts. These e-commerce listings comes with multiple benefits like visibility of Legrand products to new customers through search engine optimizations, facilitate location of products quickly, customers can comprehend all its features and offerings before making a purchase and lastly it will reduce distribution cost to a very large extent. Legrand can definitely turn this weakness around into opportunity and then strength. SWOT & PESTLE.com’s research on various e-commerce websites like Amazon.com, Alibaba.com, ebay.com etc. shows that Legrand has fewer product listings as compared to its competitor Schneider Electric.

Opportunity

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Threats

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Political

1. Impact of corruption probe on the company: Legrand along with other three of its competitors were suspected of corruption and cartel pricing as per the French Anti-Corruption Agency and Competition Authority. These bodies submitted report to Paris prosecutor’s office. Following up on these reports investigation was ordered and 12 raid searches were carried out on the office premises of Legrand and other three of its competitors. They were booked for alleged forgery, tax fraud, breach of trust and cartel pricing. After this incident Legrand has launched a guide and also delivers training sessions on best business practices to avoid untoward incidents in future. The guide elaborated all circumstances under which they might be held responsible for direct or indirect corrupt practices. These practices were made punishable with hefty fines, immediate termination and imprisonment as per act. Legrand has established a work environment where each employee can consult their immediate supervisor or chief financial officer regarding any concern they have regarding this.

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Economic

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Social

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Technological

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Legal

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Environmental

1. Reduction of energy footprint and Initiatives to combat climate change: Global warming and climate change are becoming a challenge for the entire world. Changing weather patterns and rising sea levels are a concern for every nation. Considering this, all nations came forward and signed Paris agreement to undertake efforts to combat climate change. Legrand signed a joint corporate appeal on climate change and joined a forum of more than 190 French and other companies to take actions on ecological transitions. This appeal avoids compromise on climate change in the rush of economic recovery. These undertakings under this appeal were already incorporated under the CSR strategy of Legrand.

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