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    Aditya Jain
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    Honeywell was considering divesting its defense-oriented business segment. It had previously transferred knowledge between its home/building controls, industrial automation, and space/aviation segments. This allowed it to improve products, reduce costs through client feedback, and take advantage of related market conditions. Honeywell also partnered with other firms and managed to obtain multi-segment projects utilizing expertise across divisions. However, marketing approaches needed to differ based on whether serving industrial or commercial customers due to differences in customization needs, product attributes, and standards.

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    Honeywell was considering divesting its defense-oriented business segment. It had previously transferred knowledge between its home/building controls, industrial automation, and space/aviation segments. This allowed it to improve products, reduce costs through client feedback, and take advantage of related market conditions. Honeywell also partnered with other firms and managed to obtain multi-segment projects utilizing expertise across divisions. However, marketing approaches needed to differ based on whether serving industrial or commercial customers due to differences in customization needs, product attributes, and standards.

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    37 views13 pages

    Case Study

    Uploaded by

    Aditya Jain
    Honeywell was considering divesting its defense-oriented business segment. It had previously transferred knowledge between its home/building controls, industrial automation, and space/aviation segments. This allowed it to improve products, reduce costs through client feedback, and take advantage of related market conditions. Honeywell also partnered with other firms and managed to obtain multi-segment projects utilizing expertise across divisions. However, marketing approaches needed to differ based on whether serving industrial or commercial customers due to differences in customization needs, product attributes, and standards.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 13

    Case Study

    Agenda

    Honeywell business segmentation Knowledge transfer Divesting defence oriented segment

    Business Segmentation
    Sales in 1991

    Home & Building Control (50%) Industrial Automation & Control Supplies (50%) Space & Aviation (40%) Others

    Economic & Financial Indicators for Honeywell


    Year Sales (mil $) Net Income (mil $) Cap Spendin g (mil $) R&D (mil $) ROE (%) ROI (%)

    1991 1990 1989

    6193 6309 6059

    331 372 550

    270 252 268

    301 280 284

    19.2 20.6 33.5

    15.4 17.4 23.2

    Major Divisional Data for Honeywell


    1989 Sales by Line of Business Home & Building Industrial Space & Avionics All Other Operating Profits by Line of Business Home & Building 225 237 229 2077 1491 2004 486 2197 1653 2071 388 2249 1627 2132 185 1990 1991

    Industrial Space & Avionics


    All Other Sales by Geographic Area United States Europe Other Areas Duplications/Eliminations

    137 111
    21 4568 1171 587 (267)

    220 200
    19 4512 1423 631 (256)

    224 226
    (3) 4333 1455 683 (278)

    Agenda

    Honeywell business segmentation Knowledge transfer Divesting defence oriented segment

    Knowledge transfer
    Honey well instruments were used in Avionics industry in both civil and military aircrafts. Sustenance was possible when they transferred knowledge within the business segments from one application to other.

    Further improvement
    Client feedback Implementation new methods of installation as per client recommendation. This enabled them to reduce cost of manufacturing and installation. Developed R&D outside the lab with the help of market conditions

    Strategies for further growth


    Honeywell managed to get multiple projects which required expertise from different segments Strategic alliance with firms like

    Becthel construction
    DuPont Chemicals Digital equipments Computers

    Transferring marketing know how

    It is possible to some extent


    When products segments are related
    Product attributes have something in common Eg selling climate control products HVAC

    Honeywell product range consists of surveillance control systems and biometric systems
    The above systems are similar attributes so

    transferring marketing know how is not a problem

    When serving different segments

    Industrial segment
    Requires more

    customization as per requirement Industrial products has to be of higher ratings Eg temperature control over 4 ton capacity machines are more of refrigeration than air-conditioning

    Comm. Segment Standardized products Products has to be easy to install eg AC machines less than 4 tonns

    Can it be same?
    Cannot be same as requirements are different and product attributes are different If you know the product then only you can market the product If marketing well, then selling is not an issue

    Agenda

    Honeywell business segmentation Knowledge transfer Divesting defence oriented segment

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