1. PROJECT
WESTINGHOUSE ELECTRIC COMPANY, LLC
GROUP ANDREW BILLING, DAVID MASSEY, ERIC SCHAEFER, JOEL UPTON
DATE 4/27/2010 GROUP NO. SEVEN

2. TOPIC
AGENDA
Introduction and Overview
Business Level Strategy
Corporate Level Strategy
Issues and Recommendations
Summary
Questions and Discussion
The Nuclear Renaissance Starts Here

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. TOPIC
AGENDA
Introduction and Overview
Business Level Strategy
Corporate Level Strategy
Issues and Recommendations
Summary
Questions and Discussion
The Nuclear Renaissance Starts Here

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. TOPIC
AGENDA
Introduction and Overview
Business Level Strategy
Corporate Level Strategy
Issues and Recommendations
Summary
Questions and Discussion
The Nuclear Renaissance Starts Here

20. 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

21. 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

22. 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

23. TOPIC
AGENDA
Introduction and Overview
Business Level Strategy
Corporate Level Strategy
Issues and Recommendations
Summary
Questions and Discussion
The Nuclear Renaissance Starts Here

24. 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

25. 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

26. 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

27. 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

28. 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

29. 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

30. 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

31. 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

32. 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

33. 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

34. 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

35. 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

36. 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

37. 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

38. 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

39. 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

40. 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

41. TOPIC
AGENDA
Introduction and Overview
Business Level Strategy
Corporate Level Strategy
Issues and Recommendations
Summary
Questions and Discussion
The Nuclear Renaissance Starts Here

42. 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

43. TOPIC
AGENDA
Introduction and Overview
Business Level Strategy
Corporate Level Strategy
Issues and Recommendations
Summary
Questions and Discussion
The Nuclear Renaissance Starts Here

44. 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