This action might not be possible to undo. Are you sure you want to continue?
United Technologies Corporation
Mini-Paper 2 United Technologies Corporation
April 22, 2012
Instructor: Dr. Iaquinto
such as aerospace engines/products. United Technologies Corporation (UTC) has numerous competitors. 1 . However. A strategic group mapping of these companies and UTC with 2010 sales of $54 billion is shown below. HVAC units. helicopters. similar UTC international competitors are probably best described as other conglomerate company structures like itself within the aerospace and industrial building systems technology industries. $64 billion (8 business segments) and $150 billion (5 business segments) respectively. though most competitors are specialized to only one business field.Mini-Paper2 United Technologies Corporation Industry Introduction With business units in a number of different industry fields. ThyssenKrupp and GE. elevators. Though there are several companies that could possibly fit this description. a few of the most notable are Boeing. with 2010 sales of $64 billion (5 business segments). and fire/security systems.
Establishment of Good Customer Service and Buyer Relationships Most products are high price long term purchases. Economies of Scale Relative low product quantities at high production costs require seeking greater profit margins through lower per unit costs that can only be gained through economies of scale. followed by a Five Forces Model that generally describes this industry. Aerospace/Industrial Technologies Industry KSF Table 1. This makes R&D critical. It is therefore crucial to capture any potential customer at the earliest opportunity. 5.Mini-Paper2 United Technologies Corporation This industry is a highly competitive and high capital resource industry. Relationship Marketing of Differentiated Products Product differentiation from similar products. Efficient technology and techniques are important for price competition customer satisfaction. or making favorable production and delivery terms for a customer. However. Some of the “Key Success Factors” of the Industry are shown below. competitive advantage is usually gained by product innovation through the latest technology. or adjustments for currency fluctuations. 4. 6. Vision and Capital Resources to Expand Globally With the limited number of government of commercial buyers for most products. therefore securing a sale ensures further customer interaction for many years. globalization is essential for economies of scale and sustained growth within the industry. the organization that secures the contract is generally ensured long-term interaction and often future business follows. 2. as well as experience in building relationships with government officials and company executives is necessary to capture market share and earn higher returns. 2 . Strong Access to the Commercial Paper Market Strong cash positions (at levels usually only afforded to conglomerates) help to insure confidence among lenders and serves as an important tool in making quick strategic acquisitions . If a potential sale is lost to a rival. with after sale services. Extensive Research and Development (R&D) Expenditures In this mature market. it could be as many as ten years before that relationship ends. 3.
the US. the company operates in 180 countries across Latin America. Finally. Africa and the Middle East. Sikorsky (helicopters). they saw large opportunities in emerging markets like India and China. UTC is headquartered in Hartford. Going forward they are going to continue to focus on R&D and expanding their margins bringing added equity to their stockholders. 3 . Geographically. United Technologies (UTC) corporate structure is that of a conglomerate. UTC operations are classified into six principal business unit segments: Otis (elevators units). Although each one of UTC business units companies operate somewhat independently within their specific industries. Carrier (HVAC units). Connecticut. and took action to capitalize. Also. North America. Company Strategic Vision A part of UTC corporate and international strategy has been for each of their subsidiaries to be the top company in their market segments. Europe. Pratt & Whitney (aerospace engines). and Hamilton Sundstrand (aerospace and industrial products). UTC is a global provider of high technology products and services to the building systems and aerospace industries. They have accomplished this by relying on their top name recognition to capture business. UTC Fire & Security (fire and security systems).000 centers in about 71 countries. UTC uses its conglomerate corporate structure for competitive advantage over its single industry competitors. UTC has a presence in 4. Asia Pacific. sizeable amounts of money have been invested in R&D to come up with leading edge technology for their markets.Mini-Paper2 United Technologies Corporation UTC International Strategy Elements Company Description and Corporate Structure Over the last five years (and longer).
Also apart of its international strategy is growth by acquisition. Mexico. political and/or economic risk. at December 31. and longer cycles in its aerospace businesses. Other Key International Strategies To limit the impact of any one industry or the economy of any single country on its consolidated operating results. it's easy to say based on UTC's several acquisitions in 2010 that they are on a rampage in terms of international expansion strategy by acquisition. UTC businesses include both commercial and aerospace operations. Considering the fact that UTC chose to spend more than twice as much as 2008. UTC strategy has been. in 2010. as well as the combination of shorter cycles in its commercial and industrial businesses. particularly Carrier. 2010. As part of its international growth strategy over the last five years. However. India. the maintenance of a balanced and diversified portfolio of businesses. China. Russia. UTC invest in businesses in certain countries that carry high levels of currency. 4 .Mini-Paper2 United Technologies Corporation by using the experience of culture awareness and foreign currency awareness obtained from its other business units that might have previously entered the foreign market. original equipment manufacturing (OEM) and extensive related aftermarket parts and services businesses. and continues to be. such as Argentina. South Africa and countries in the Middle East. Brazil. and about 4 times as much as 2009. UTC customers include companies in the private sector and governments. and our businesses reflect an extensive geographic diversification that has evolved with the continued globalization of world economies. the net assets in any one of these countries did not exceed 7% of consolidated shareowners’ equity.
0 showing they have a solid cash position. they have remained stable through an uncertain economy. Non U. UTC is showing a 22. UTC international strategy has produced a strong portfolio of diversified sales across its business segments.33 to an industry of 1.S. international sales of over 60% of company sales in 2010. especially those that face intense competition. and its foreign regions as shown in the charts below. Although their margins have historically been below the industry and S&P averages. On that revenue UTC was able to garner an 8% net profit margin and generate about $6B in operating cash flow. In 2010 UTC had revenues of approximately $54B which was up from 2009 by about $2B. For 2010 UTC has a current ratio of 1.4% ROA which is considered very healthy.2% ROE and an 8. and it grew from 5 .Mini-Paper2 United Technologies Corporation UTC Strategy Effectiveness and Five Year Financial Summary An effective strategy is a precursor for success for firms.
” Five Year Financial Summary Financial resource fit is important in a diversified company in order to make sure there is sufficient cash flow to fund the daily capital requirements. UTC has paid a dividend on its common stock for 75 consecutive years. The S&P gives UTC a risk assessment rating of low with a quality rating of A+. From the 2010 annual report “For the period from Dec 31. inventory. and meet debt obligations. The company’s cash flow to net income ratio being above 1. UTC has delivered total shareowner return of 140%. Return on Equity and Return on Assets indicate a healthy company that gives solid value to its investors. and asset turnover is in line with the industry average which indicates management is effectively utilizing the company’s resources. through Dec 31.Mini-Paper2 United Technologies Corporation 2009 which is another excellent sign. The overall financial health of the company is very strong even in a week domestic economy and uncertain foreign markets. This is further indicated by the last five years financial summary chart below: 6 . The evaluation of United Technologies Company indicates that it is a solidly managed company with stable earnings and average growth for the sub-industry. 2010. The company’s strategy of growth by disciplined acquisition and capital redeployment.3 for the recent years indicates that earnings (net income) are being economically produced and not just produced by accounting methods. along with its focus on research and development that capitalizes on the trend toward energy efficient products seems to have it well positioned for stability and continued industry growth. pay dividends. 2000. Receivable.
Mini-Paper2 United Technologies Corporation Conclusions and Recommendations United Technologies Corporation (UTC) growth strategy falls under three quadrants: growth through key acquisitions. combined with continued key acquisition of foreign companies with that have a clear strategic fit with its current business segment and products lines. (2010). as has been demonstrated by the success of UTC over the years. Hartford Connecticut 7 . http://investors. Using the old adage “if it ain’t broke don’t fix it”. and product innovation.com/Investor+Relations United Technologies Corporation. References United Technologies Corporation.utc. UTC should continued use name recognition competitive advantage. UTC should continue using its existing strategy over the next 5 years. increase international market share of through promotion of the long history its business segment brands names. (2010) Hartford Connecticut United Technologies Corporation. Annual Report. Many of its business segment companies have industry recognition and track records extending 75 to 100 years. The first two have huge potentials. Form 10-K.
Charles.com/2011/02/16/can-us-sidestep-growing-global-inflation/ Competitors.utrc.html 2010 Annual Report.utc. “Can the U. Retrieved from http://www. Retrieved from http://www. The Boeing Corporation.com/symbol/utx/competitors Investors link provided within UTC Website: http://www. Retrieved from http://www. James.nasdaq. DailyFinance. “United Technologies Raises Full-Year Forecast After Profit Tops Estimates” July 20. Bloomberg. United Technologies Corporation. Retrieved from http://www.com.com/Investor+Relations/Dividends http://utc. February 16.com.Mini-Paper2 United Technologies Corporation Gale. 2006 Investigation of Aerospace Industry.dailyfinance.utc.pdf Wallace. Rachel.4+Perce nt 8 .uk/409/1/JamesGale-InternationalBusinessDissertation.ac.bloomberg.pdf 2010 Annual Report. 2011. Retrieved from http://www. 2011.com/news/2011-07-20/united-technologies-boosts-forecasts-after-profitgains-19-1-.com/visits/presentations/UT_2010_Full-Report.com/News/Archive/2010/UTC+Board+of+Directors+Increases+Dividend+10. Retrieved from: http://edissertations.S.nottingham.envisionreports.pdf Layne. United Technologies. NASDAQ. Sidestep Growing Global Inflation?”.com/ba/2011/20707FE11E/d2e2b5ec9432426e825952329f64083a/B oeing_AR_3-23-11_SECURED.
since you are looking at a specific company (there really was no need to mention the other companies in that industry). But if you were going to include these tools you should have done something more than to simply plop them in the middle of your paper. to a VP of operations OR is there one person in charge of Europe and another who is in charge of other areas? You did do a nice job of addressing points 3 and 4. your paper should have done the following: 1) Describe the way your company has been organized internationally during the last five years. you stated that the company operates in many contries. As for addressing point one. and 4) Provide recommendations for the firm to become a market leader in the next five years This assignment was different than the case studies. 2) Assess the structure and modus operandi of the firm in relationship to its objectives to exploit global (or regional) advantages yet remaining responsive to local conditions. You should have at least intergated any conclusions you reached by using those tools into the text of the paper. There was less need to do a five forces model or KSFs. In other words.Mini-Paper2 United Technologies Corporation ****************************************************************************** The professor’s comment about the mini-paper: Based on the instructions in the video in the week 1 weekly outline. 9 . who reports to whom? Who controls or coordinates their international operations? Do all international operations report directly to the president. but you really didn't discuss how those operations are structured. 3) Does the firm have the resources to compete internationally.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.