Playing to Our Strengths
Playing to our strengths means making deliberate and explicit choices that align with where we excel. Our strengths fall within four main categories:
Products and Offerings
- Technical products that enable follow-on and value-added services
- Technology leader in our core businesses
- Sustainable operations and offerings
- Relatively long and stable product cycles
- Innovation-embedded capabilities
Manufacturing
- A manufacturing and supply chain company
- Sustainable operations and offerings
- Continuous and relentless improvement culture
Business Models
- Businesses with scale
- Applied engineering and technologies
- Good, trusted and capable partner
Customers and Brands
- Strategic customer relationships
- Expanding channels
- Superior brands
Johnson Controls Operating System (JCOS)
JCOS is enabling us to achieve our vision to become the most operationally capable organization in the world – with standardized approaches across the enterprise, and by establishing and leveraging best practices and consistent, repeatable processes to increase our speed and agility. It is our culture of continuous improvement, clear accountability and focus on results. It is our Johnson Controls Way.
Balanced Portfolio
We have made a lot of changes to our portfolio, with a lens toward delivering the most value to our customers and shareholders. Playing to our strengths and the core competencies we have developed by implementing the Johnson Controls Operating System help us determine the optimal balance of our portfolio as well as our planned capital allocation for our future growth.
Natural Businesses
A natural business unit (NBU) means a natural market; we assess and do business at this level, as it is the level at which we truly compete. We use a data-based method of assessing our portfolio at this level.
1) First, we measure value in terms of growth, ROIC and free cash flow to tell us where we are creating value and generating market cap growth.
2) Next we assess the attractiveness of the NBU’s market (growth, profitability, size, etc.).
3) Then we check for fit with our Enterprise Plan: does it play to our strengths and leverage the Johnson Controls Operations System?
4) Finally, we assess the strength of our strategy and the confidence level in our success.
This disciplined approach drives ongoing focus and maximizes our ability for market leadership.
Asia Pacific (China First)
Asia-Pacific holds the vast majority of the growth opportunity available over the near term and for decades to come. Our addressable market today is over $50B in size. As these markets grow, and we take advantage of new segments, our addressable market will triple in size to approximately $150B. We will take a China-first approach, as it is the largest car market, HVAC market, and by 2020 will become the largest battery market. We must win in China- first.
Growth Platforms
Focusing on the Energy and Buildings growth platforms is important to our plan to win. We define growth platforms as businesses that are in attractive markets informed by positive mega trends and have high fit with our strengths, have the potential to be large and highly profitable and where we can be the leader. These businesses will generate profitable growth now and through the years to come. We will resource each of these businesses for success and play to win.