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Sustain market dominance of

Honeywell Technology

Solutions Lab

Sustain market dominance of Honeywell Technology Solutions Lab 2013

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Table of Contents

Serial Content Page

1 Introduction 04

2 Business Mission 05

3 Financial Review 06

4 Marketing Audit 06

4.1 External Audit 06

4.1.1 Macro environment 06

4.1.2 Micro environment 07

4.2 Internal Audit 07

5 SWOT Analysis 08

6 Critical to Success Factors 09

7 Marketing objectives 09

7.1 Strategic Thrust 09

7.2 Strategic Objectives 10

8 Core Strategy 10

8.1 Target Markets 10

8.1.1 Market characteristics 11

8.1.2 Segmenting the market 11

8.1.3 Targeting each segment in the market 11

8.1.4 Strategies for Target Markets 12

8.1.5 Positioning 12

8.2 Competitor targets 12

8.2.1 Competitor Analysis 12

8.2.2 Competitive Strategy 13

9 Competitive Advantage 13

10 Marketing Mix Decisions 13

10.1 Product 13

10.2 Promotion 14

10.3 Place 14


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Serial Content Page

10.4 Price 14

11 Conclusion 15

Appendix 16

Bibliography 65


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1. Introduction

Honeywell International Inc. is one of the pioneers in innovating and engineering cutting

edge technologies that make people’s everyday life safer and more secure, more comfortable and

energy efficient, more innovative and productive (Ferris, C. R. 20131). Since its being from 1885, it

has evolved itself into a conglomerate company which develops diversified products ranging from

avionics for aircrafts to thermostats for homes (Ferris, C. R. 20132).

The Honeywell portfolio could be classified into four segments namely Aerospace, Automation and

Control, Speciality Materials and Transportation systems which consist of numerous products

(Ferris, C. R. 20132). The Honeywell Technology Solutions Lab (HTSL) is a subsidiary of

Honeywell International Inc which primarily does research and development of products in

Honeywell’s portfolio (Reach Information Portal.2013).

As per Dr. Barr. 20131, financial sales of aerospace product and services grew by 7 percent in 2011

compared to last year due increase sales volume figures. The operating profit has increased by 10

percent in 2011 compared to last year due to increased aftermarket demands, productivity

improvements, research and developments (Dr. Barr. 20131).

HTSL sells its aerospace products and services through Honeywell in four different markets namely

Air Transport Regional, Business General Helicopters, Defence and Space which includes

customers such as Boeing, Bombardier, Cessna, Dassault, EADS/Airbus, Embraer and Gulfstream

(Dr. Barr. 20131) (Dr. Barr. 2013

4). HTSL experiences lively competition in all the products and

services that it provides regardless of the geographic location in which it operates. Companies like

Rolls-Royce, General Electric, The Boeing Company, Thales, Rockwell Collins, Siemens, Bosch

and Goodrich Corp who have products which have considerable competitive technological

capabilities participate aggressively to sell their equivalent aerospace product and services (Dr.

Barr. 20132). Factors such as price, delivery time, performance, innovation play a major role in the

competition between product and services. However, the brand identity and exceptional quality

remains the competitive advantage of HTSL to market and sell its product and services. Operational

excellence that is executed in every segment of its business aids to achieve superiority.


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In order to sustain dominance in a long term against all the major competitive players who improve

their functional competencies and boost their brand image, HTSL could devise a medium term

strategic market plan. This thesis will flow through the strategic market planning process of HTSL’s

Aerospace Business which forms the basis for the development of a medium term strategic plan. An

enhanced version (Appendix A) of David Jobber’s principles and practice of marketing model is

utilized as a framework for performing the strategic market planning process. Further to enrich the

process, a variety of pricing strategies are critically analyzed so that all the perspectives have been

considered in the strategic market planning process to create the appropriate medium term strategic

market plan that could formulate a positive impact for dominance. Similar processes could be

applied to other business sectors of HTSL in order to overcome the market competition and gain

supremacy over the complete portfolio of products.

2. Business Mission

As per Jah, M. 2013, the current Mission statement could be quoted as follows

“Maximize the value and impact on Honeywell businesses and customers by providing Technology

Product and Business Solutions and Services setting standards of world class performance.”

As shown in Appendix B, the HTSL mission statement could be verified to be a Global Mission

Statement which has both the narrow and broad aspects of the internal and external dimensions of

the organization. On testing the mission statement, it could be understood that, the mission

statement does not hang together and does not mention where HTSL needs to compete and who are

the customers. Hence the mission statement could be re-written as follows:

“Maximize the value and impact on Honeywell businesses and customers during their intervention

with technology in their day to day lives, by providing Technology Product and Business Solutions

and Services through setting world class performance standards.”


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3. Financial Review

HTSL finances could be reviewed effectively by the financials of Honeywell International Inc as it

serves as a subsidiary (Dr. Barr. 20133). As seen from income statements in Appendix C, HTSL

Aerospace Business revenues and profits could be assessed to have grown significantly which

depicts the increasing dominance. The increase in the number of discontinued projects and

operations illustrates the organization’s efforts to venture into new products and services to stay

ahead in the market.

4. Marketing Audit

4.1 External Audit

HTSL current marketing strategies could be audited effectively by critically analyzing the external

and internal aspects of its business operations (Jobber, D. 2010).

4.1.1 Macro environment

The following opportunities and threats could be implied about the Macro environment using the

PESTLE tool, as shown in Appendix D:

1. The growth of culture and heritage in different countries which enhances tourism and

development of software product line which increase reusability create extremely favourable

conditions

2. Innovation makes HTSL environment conducive while increase in Gross Domestic Profit

could have a positive impact on the business operations.

3. Changes in the regulations for off shoring and VISA approval policies are to be observed

continuously because they could have negative impact preventing HTSL acquiring business

excellence.


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4. Increase in crude oil prices, usage of outdated and flawed tools for product development

could cause catastrophic conditions that could bring down the operations of HTSL due to

declining profits.

4.1.2 Micro environment

The following opportunities and threats could be concreted about the Micro environment using the

Porter’s 5 forces tool, as shown in Appendix E:

1. Innovation and creation of futuristic products and services could bring about extremely

favourable conditions for achieving market dominance.

2. Quality products could have a favourable impact on HTSL market share and profits whereas

low price of products even though less probable could have a positive impact. Therefore it is

vital to make an appropriate trade off between quality and price.

3. Inferior quality supplies, lack of customers in the market place and expensive substitutes

with inferior quality are to be observed continuously because they could have negative

impact on HTSL developing quality products which could in turn affect the market share.

4. Existence of only one supplier due to mergers and acquisitions could cause catastrophic

conditions by decreasing the profits.

5. Decrease in the number of customers could cause disappointment due to the reduction of

market size whereas increase in the number of new entrants selling inferior quality products,

even though less likely to occur, could bring down the customers trust on organizations to

deliver quality products on a long term.

4.2 Internal Audit

The following strengths which create cost and differentiation advantages could be inferred from the

internal aspects using the Porter’s Value Chain tool, as shown in Appendix F:


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Cost advantage:

1. Through the knowledge of varied customer expectations, HTSL could link the requirements

and create an efficient product which could exceed customer expectation and as a result

create a significant cost advantage.

2. While performing the maintenance activity, HTSL could gain a competitive cost advantage

due to the increase of service quality with the number of customers using their aerospace

product and services.

Differentiation advantage:

1. The marketing and sales activity could be enhanced from being a conventional activity to an

activity creating a differential advantage by using a product line methodology which allows

the consumers to populate the features that are expected out of the new product.

5. SWOT analysis

The SWOT analysis (Refer Appendix G) could be used to determine the strengths, weakness,

opportunities and threats of HTSL from which the following matching, conversion and creative

strategies could be implied (Kotler et al. 1996).

Matching Strategies:

1. The strategy put forth to create futuristic products could make HTSL possess a competitive

advantage when aerodynamic designs are improved and navigational systems are aligned to

Global Positioning Systems to increase fuel efficiency.

2. The customizable products could facilitate to capture business proposals from rising

markets.

Conversion Strategies:

1. Performance improvement strategies like optimization of algorithms in the embedded

software product could ensure the product is easy to use by overcoming the lag.


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2. Product re-design strategy involving new design to overcome the conventional design and

make the product portable could be implemented to make the product easy to maintain.

3. Increase in crude oil prices and ozone layer depletion could lead to the urge for fuel efficient

flights.

Creative Strategies:

1. Strategies for innovation and sophistication could revolutionize the product to suit customer

demands in the long run.

2. Implementation of Decision Support System could make the product capable to support real

time decision making.

6. Critical to Success factors

The position of HTSL to deliver the Critical to Success factors in its aerospace product and services

could be assessed as per Appendix H (Kotler et al. 1996). It was evaluated that HTSL performance

with its close competitor General Electric could be equivalent if the performance of the products if

HTSL is improved with respect to time taken for producing results.

7. Marketing objectives

7.1 Strategic Thrust

Since the avionics products and services have been marketed for a long period of time, majority of

the products are available in this mature market. Hence, from the Ansoff’s Matrix, as given in

Appendix I, it could be derived that HTSL could implement the Market penetration or expansion


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Product growth Strategy because of existing markets and the products (Baker, M and Hart, S.

1988).

7.2 Strategic Objectives

As per the Mckinsey & Co the Market Attractiveness – Competitive Position Model, the strategic

objectives of four different HTSL aerospace product and services could be arrived by involving the

factors such as market size, market growth rate, beatable rivals, market entry barriers, social,

political and legal factors, market share, distribution capability, service quality, innovation

capability and cost advantage as per Appendix J (Jobber, D. 2010). It could be concluded from

taking the four strategic objectives namely build, hold, harvest and divest into consideration

(Jobber, D. 2010), the hold objective could be implemented to majority of the HTSL aerospace

product and services to dominate the saturated market and ensure profits is generated. For other

negligible products, the appropriate objective except divest could be implemented based on the

market growth and competition.

8. Core Strategy

As per Jobber, D. 2010, the core strategy involves the determination of target markets and

competitor targets.

8.1 Target Markets

As stated by Jobber, D. 2010, the Target Markets for HTSL aerospace product and services could

be derived from the following steps given below:


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8.1.1 Market characteristics

The core requirement of the customers who comprise the HTSL aerospace product and service

market is for solutions to make air transport safe, secure, comfortable, efficient, innovative and

productive (Ferris, C. R. 20131). This requirement could be classified further to relate to unique

products in the portfolio which could be inferred from Appendix K.

8.1.2 Segmenting the market

The market for HTSL aerospace product and services could be divided into consumer and

organizational markets (Jobber, D. 2010) as described in Appendix K. The biggest segment in the

HTSL consumer markets are the consumers who look for benefits and customers who are

trendsetters or conservatives or sophisticated in nature and the smallest segment in the consumer

markets are the middle working consumers. The biggest segment in the HTSL organizational

markets are those big sized business organizations such as Boeing and Airbus where as the smallest

segment in the organizational markets are those small sized business such as Space Dev and DR

technologies (Fichtenbaum, I and Davidson, H. 2009).

8.1.3 Targeting each segment in the market

As stated by Jobber, D. 2010, the targeting of each identified segment could happen based on the

market attractiveness and the company’s capability to compete in the segment. The market

attractiveness of various segments which use HTSL aerospace product and services could be

determined using market, competitive and environmental factors (Jobber, D. 2010) as given in

Appendix K. The factor which creates the most attractiveness is the fact that long term revenue

making opportunities exists whereas the least attractive factor is the stagnant segment growth rate.

HTSL aerospace business competing capabilities in the segment could be due to low cost advantage

by using sophisticated tools and superior technological edge due to customizable, re-usable and

reliable products and services.


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8.1.4 Strategies for Target Markets

As per Jobber, D. 2010, on critical analysis of all the four different strategies namely

Undifferentiated Marketing, Differentiated Marketing, Focused Marketing and Customized

Marketing as given in Appendix K, it could be concluded that HTSL aerospace could adapt to the

differentiated marketing strategy to sell its products and services because of the commonalities

present in the requirement of some customers while other customers have varied requirements.

8.1.5 Positioning

By Spidergram analysis (Refer Appendix K) of HTSL, its competitors General Electric and

Rockwell Collins aerospace products and services, the following could be depicted:

1. HTSL aerospace product and services are positioned to be customizable and quality

oriented.

2. General Electric aerospace product and services are positioned to be performance and

innovation oriented

3. Rockwell Collins aerospace product and services are positioned to be affordable in terms of

costs.

8.2 Competitor targets

As per Jobber, D. 2010, the other aspect for determining the core strategy is to determine the

competitor targets which involve competitor analysis and competitive strategy.

8.2.1 Competitor Analysis

As per Jobber, D. 2010, HTSL aerospace competitors namely General Electric and Rockwell

Collins are analyzed (Refer Appendix L) based on strengths and weaknesses, strategic objective and


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thrust, strategy and response pattern and could be concluded that the three competitors have their

own competitive advantages to stay in the race for market share.

8.2.2 Competitive Strategy

As stated by Jobber, D. 2010, applying each strategic marketing objectives namely build, hold,

harvest, divest and niche to the HTSL aerospace environment as in Appendix L, it could be

concluded that the hold objective could be applied so that the product and services offered could

generate revenues that could be used to enhance quality and in turn sustain market dominance.

9. Competitive Advantage

The competitive advantage of HTSL aerospace product and service which has a broad

differentiation scope could be derived to be the following (Refer Appendix M):

Customizable

Reliable

Numerous Features

10. Marketing Mix Decisions

As per Barton, P.R. 20132, the marketing Mix decision of HTSL aerospace business could be

derived from four facets namely Product, Promotion, Place and Price.

10.1 Product

HTSL in terms of Honeywell has both brand image and corporate identity. However, the corporate

identity of the product is analyzed cause of brand being trivial due to limited products and


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customers. From the analysis of corporate identity as given in Appendix N it could be concluded

that, the conceived corporate identity of exceeding expectations need to match the ideal identity of

meeting customer expectations because development cost could be saved. The product life cycle of

HTSL aerospace reveals that the product sales have been matured and translating into high

revenues.

10.2 Promotion

The promotional aspects of HTSL aerospace products and services could be analyzed as in

Appendix N which reveals that the exhibitions and product placement are the two best promotional

methods that could be applied to maintain market dominance.

10.3 Place

Due to the regulations imposed on marketing by the Directorate General of Civil Aviation on life

critical products, HTSL aerospace products and services could be distributed to the consumers

through the consumer channel by using Producer Direct to Consumer methodology and the

Business consumers through the Business to Business channel using Producer to Business

Consumer methodology (Refer Appendix N).

10.4 Price

It could be inferred from the analysis in Appendix N that Competitor-Orientated Pricing and Market

Orientated Pricing could be effective pricing schemes for HTSL aerospace product and services

while the Cost-Orientated pricing could not be applied as the number of units that could be sold

could not be estimated. As per Nagle, T.T and Holden, K. R. 1987, unbundling related products and

services could also be inferred as an effectual way to enable HTSL to sell products as a bundle at

competitive prices and gain superior market share.


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11. Conclusion

As a result of performing the strategic market planning process, HTSL aerospace could be

currently assessed to be in a dominant position with its competitive advantages being the

“Honeywell” brand image and maintaining exceptional quality in all its products and services.

However, HTSL aerospace faces massive competition from close competitors like General Electric

and Rockwell Collins who have aggressive capabilities in technology as well as have their own

competitive advantages such as affordable prices, low maintenance cost, performance and

innovation to battle for market dominance. In addition to being competitive, the competitors could

increase their brand image and become proficient to deliver quality products and services each

passing day. In order to sustain the market dominance against the vicious competition, HTSL

aerospace could become competent in the facets of performance, pricing and innovativeness so that

it could salvage the competitive advantage of its rivals. Multiple perceptive of the strategic market

planning process including efficient pricing strategies were considered in this thesis that could be

crucial to develop a medium term strategic market plan for HTSL aerospace and hence sustain

supremacy in the challenging years to come.


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Appendix


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Appendix Index

Index Content Page

Appendix A Framework for the strategic market planning process 19

Appendix B Mission Analysis 20

Appendix C Annual Balance Sheet 24

Appendix D External Audit for Macro Environment 29

Appendix E External Audit for Micro Environment 32

Appendix F Internal Audit 35

Appendix G SWOT Analysis 37

Appendix H Critical to Success Factors 38

Appendix I Product Growth Strategy 39

Appendix J Managing Brand and Product Line Portfolios 41

Appendix K Target Markets 44

Appendix L Competitor Targets 51

Appendix M Competitive Advantage 54

Appendix N Marketing Mix Decisions 56


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Appendix A

Enhanced framework for the performing the strategic market planning process of HTSL based on

the David Jobber model for Principles and Practice of Marketing (Jobber, D. 2010):

Figure: Enhanced framework of the strategic market planning process based on the David Jobber

model for Principles and Practice of Marketing (Jobber, D. 2010)

5 year Income

Statement

Micro

environment

Macro

environment

Porter’s 5

forces PESTLE

Financial Review

Marketing Audit

Business Mission

External Audit Internal Audit

SWOT analysis

Marketing objectives

Strategic thrust Strategic objectives

Core Strategy

Competitive advantage

Marketing Mix Decision

Target markets Competitor targets

Critical to Success factors

Competitor

Strategy

Competitor

Analysis

Place Price Promotion Product

Porter’s

value chain

Ansoff’s

Matrix

GE Portfolio

Matrix

Characteristic of Market

Segmentation of Market

Target strategy of Market

Positioning of Market

Spidergram analysis


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Appendix B

Mission Analysis

HTSL Mission Statement

“Maximize the value and impact on Honeywell businesses and customers by providing Technology

Product and Business Solutions and Services setting standards of world class performance.” (Jah,

M. 2013)

Type of Mission Statement

The mission statement covers both the Internal and External Dimensions by the following

(Thwaites, D. 2012):

Internal Dimensions: The phrase, “Set world class performance standards” provides the overall

perspective about how the internal functioning of the business.

External Dimensions: The phrase, “Provide Technology Product and Business Solutions and

Services that will maximize the value and impact on Honeywell customers” gives the generic

standpoint on the external business aspects.

Hence, this Mission statement could be termed to be a Global Mission statement as both the

internal and external dimensions are covered (Thwaites, D. 2012).

Type of Dimensions/ Is

covered or not

External Dimensions Covered External Dimensions not

covered

Internal Dimensions Covered

Global Mission Organizational Mission

Internal Dimensions not

Covered

Market Mission No Mission

Figure: Mission statement Dimensions (Thwaites, D. 2012)


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Mission Statement detailed analysis

The Mission statement of HTSL could be considered to have the expected Broad and Narrow

orientation of the Internal and External Dimensions which could be depicted from the

Organizational Philosophy, Product-Market Domain, Organizational Key Values and Critical

Success Factors as shown below (Thwaites, D. 2012):

Figure: Mission statement Scopes and Orientations (Thwaites, D. 2012)

Testing Mission Statement

Criteria expected in Mission Statement, inference and resolutions (if any) Score 0 –

10 (high)

1 Does the Mission Statement make it clear what the organization stands for and

why it exists? (Thwaites, D. 2012)

Inferences from Mission Statement: Yes. The organization stands for

8

Mission

Statement

External Internal

Internal External

Broad

Narrow Narrow

Broad

Product-Market Domain

Honeywell Businesses and

Customers - irrespective of their

geographical location

Critical Success Factors

“Provide Technology Product

and Business Solutions and

services”

Organizational Key Values

“Set world class performance

standards”

Organizational Philosophy

Maximize the value and create

an impact


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Maximizing value and making an impact.

2 Does the Mission Statement make it clear where we have to compete and who

are our customers? (Thwaites, D. 2012)

Inference from Mission Statement: No. It doesn’t mention neither explicitly,

but technology oriented areas could be considered as a place where Honeywell

needs to compete.

Resolution: In order to mention where Honeywell has to compete and who are

Honeywell’s customers, the mission statement could be re-phrased by adding

“during their intervention with technology in their day to day lives”. From this

phrase, it could be inferred that Honeywell needs to compete wherever

technology exists which could be used by everyone in their day to day lives.

2

3 Does the mission statement tell us the values we should adhere to in working for

this organization? (Thwaites, D. 2012)

Inference from Mission Statement: Yes. Values could adhere to the world

class performance standards

9

4 Does the Mission statement make it clear what we have to be good at to survive

and prosper? (Thwaites, D. 2012)

Inference from Mission Statement: Yes. In order to survive and prosper,

Technology product and Business solutions and services could be provided that

will maximize value and make an impact.

8

5 Do the different parts of the mission statement hang together – does it make

sense? (Thwaites, D. 2012)

Inference from Mission Statement: No, the different parts of the mission

statement do not hang together as the second phrase is not connected to the

statement properly.

Resolution: The second phrase of the mission statement could be reworded as

“through setting world class performance standards” so that it makes perfect

sense and could be recalled easily.

4

6 Is the mission statement short enough so that people can understand it?

(Thwaites, D. 2012)

9


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Inference from Mission Statement: Yes. The mission statement is short and

understandable.

7 Is the Mission Statement well-written so that people will remember it?

(Thwaites, D. 2012)

Inference from Mission Statement: No, as the mission statement is not

finished properly, it is difficult to recall the same.

6

8 Is the mission statement believable as a view of what this organization is all

about? (Thwaites, D. 2012)

Inference from Mission Statement: Yes, it depicts the overall view of the

organization

9

9 Is the mission statement challenging and exciting – will it motivate us?

(Thwaites, D. 2012)

Inference from Mission Statement: Yes, as the mission statement talks about

making an impact for the customers by setting world class performance

standards, it could be considered to be providing motivation.

9

10 Does the mission statement tell us what we should be doing and what we should

not be doing? (Thwaites, D. 2012)

Inference from Mission Statement: The mission statement mentions that the

employees should be setting world class performance standards. However, the

aspects that are not to be done are not mentioned explicitly but could be

implicitly understood that the employees shouldn’t do anything which ranks

them below the world class standards in performance.

8

Total score 72

Conclusion and implications

In order to mention where Honeywell has to compete and who are Honeywell’s

customers, the mission statement could be re-phrased by adding “during their

intervention with technology in their day to day lives”.

In order to make the mission statement hang together, the second phrase of the

mission statement could be reworded as “through setting world class

performance standards” so that it makes perfect sense and could be recalled.


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Appendix C

Income Statement (as per Doom, E. 2013)

Period Ended 12/31/11 12/31/10 12/31/09 12/31/08 12/31/07

Update Restated Restated Restated Reclassified

04/02/2012 04/02/2012 04/02/2012 02/20/12 02/20/12

In millions of USD

(except for per share items)

Net Sales 36,529.00 32,350.00 29,951.00 36,556.00 34,589.00

Revenue 36,529.00 32,350.00 29,951.00 36,556.00 34,589.00

Total Revenue 36,529.00 32,350.00 29,951.00 36,556.00 34,589.00

Cost of Revenue 28,556.00 24,721.00 23,260.00 31,118.00 26,300.00

Cost of Revenue, Total 28,556.00 24,721.00 23,260.00 31,118.00 26,300.00

Gross Profit 7,973.00 7,629.00 6,691.00 5,438.00 8,289.00

Selling / General /

Administrative Expense

5,399.00 4,618.00 4,323.00 5,130.00 4,565.00

Selling / General /

Administrative Expenses, Total

5,399.00 4,618.00 4,323.00 5,130.00 4,565.00

Interest Expense - Operating 389 402 473 482 478

Interest Capitalized - Operating -13 -16 -15 -26 -22

Interest Expense, Net -

Operating

376 386 458 456 456

Interest Income - Operating -58 -39 -33 -102 -81

Investment Income - Operating -1 -16 19 -11 24

Interest / Investment Income -

Operating

-59 -55 -14 -113 -57

Interest Expense (Income), Net-

Operating, Total

317 331 444 343 399

Loss(Gain) on Sale of Assets -

Operating

-61 0 -87 -635 -19

Unusual Expense (Income) -61 0 -87 -635 -19

Other, Net 36 -42 47 0 7

Other Operating Expenses,

Total

36 -42 47 0 7

Total Operating Expense 34,247.00 29,628.00 27,987.00 35,956.00 31,252.00


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Operating Income 2,282.00 2,722.00 1,964.00 600 3,337.00

Net Income Before Taxes 2,282.00 2,722.00 1,964.00 600 3,337.00

Provision for Income Taxes 417 765 436 -226 877

Net Income After Taxes 1,865.00 1,957.00 1,528.00 826 2,460.00

Minority Interest -7 -13 -36 -20 -16

Net Income Before

Extraordinary Items

1,858.00 1,944.00 1,492.00 806 2,444.00

Discontinued Operations 209 78 56 -- --

Total Extraordinary Items 209 78 56 -- --

Net Income 2,067.00 2,022.00 1,548.00 806 2,444.00

Income Available to Common

Excluding Extraordinary Items

1,858.00 1,944.00 1,492.00 806 2,444.00

Income Available to Common

Stocks Including Extraordinary

Items

2,067.00 2,022.00 1,548.00 806 2,444.00

Basic Weighted Average Shares 780.8 773.5 752.6 736.8 764.54

Basic EPS Excluding

Extraordinary Items

2.38 2.51 1.98 1.09 3.2

Basic EPS Including

Extraordinary Items

2.65 2.61 2.06 1.09 3.2

Dilution Adjustment 0 0 0 0 0

Diluted Net Income 2,067.00 2,022.00 1,548.00 806 2,444.00

Diluted Weighted Average

Shares

791.6 780.9 755.7 743.6 774.23

Diluted EPS Excluding

Extraordinary Items

2.35 2.49 1.97 1.08 3.16


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Diluted EPS Including

Extraordinary Items

2.61 2.59 2.05 1.08 3.16

DPS - Common Stock Primary

Issue

1.37 1.21 1.21 1.1 1

Gross Dividends - Common

Stock

1,081.00 948 916 815 767

Stock-Based Compensation,

Supplemental

168 164 118 128 112

Interest Expense, Supplemental 376 386 458 456 456

Interest Capitalized,

Supplemental

-13 -16 -15 -26 -22

Depreciation, Supplemental 699 707 686 702 675

Impairment-Assets Held for

Use, Supplemental

86 21 6 78 23

Litigation Charge,

Supplemental

149 175 155 125 100

Other Unusual Expense

(Income), Supplemental

508 402 306 809 420

Non-Recurring Items, Total 743 598 467 1,012.00 543

Total Special Items 682 598 380 377 524

Normalized Income Before

Taxes

2,964.00 3,320.00 2,344.00 977 3,861.00

Effect of Special Items on

Income Taxes

124.63 168.06 84.36 131.95 137.71

Income Taxes Excluding Impact

of Special Items

541.63 933.06 520.36 -94.05 1,014.71

Normalized Income After Taxes 2,422.38 2,386.94 1,823.64 1,071.05 2,846.29

Normalized Income Available to

Common

2,415.38 2,373.94 1,787.64 1,051.05 2,830.29

Basic Normalized EPS 3.09 3.07 2.38 1.43 3.7

Diluted Normalized EPS 3.05 3.04 2.37 1.41 3.66

Amortization of Intangibles,

Supplemental

249 263 250 201 162

Rental Expense, Supplemental 386 369 366 383 365

Equity in Affiliates,

Supplemental

51 28 26 63 10

Minority Interest, Supplemental -7 -13 -36 -- -16

Research & Development 1,799.00 1,450.00 1,321.00 1,543.00 1,459.00


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Expense, Supplemental

Audit Fees 20.4 19.7 -- -- --

Audit-Related Fees 6.4 6.3 -- -- --

Tax Fees 2.7 2.3 -- -- --

All Other Fees 0 0 -- -- --

Gross Margin 21.83 23.58 22.34 14.88 23.96

Operating Margin 6.25 8.41 6.56 1.64 9.65

Pretax Margin 6.25 8.41 6.56 1.64 9.65

Effective Tax Rate 18.27 28.1 22.2 -37.67 26.28

Net Profit Margin 5.09 6.01 4.98 2.2 7.07

Normalized EBIT 3,281.00 3,651.00 2,788.00 1,320.00 4,260.00

Normalized EBITDA 4,229.00 4,621.00 3,724.00 2,223.00 5,097.00

Current Tax - Domestic 171 -501 -47 493 249

Current Tax - Foreign 564 385 417 331 232

Current Tax - Local 13 3 19 70 64

Current Tax - Total 748 -113 389 894 545

Deferred Tax - Domestic -185 784 283 -939 225

Deferred Tax - Foreign -150 22 -253 -36 103

Deferred Tax - Local 4 72 17 -145 4

Deferred Tax - Total -331 878 47 -1,120.00 332

Income Tax - Total 417 765 436 -226 877

Domestic Tax 3 358 272 -521 542

Foreign Tax 414 407 164 295 335

Income Tax by Region - Total 417 765 436 -226 877

Interest Cost - Domestic 761 768 785 765 960

Service Cost - Domestic 232 221 183 198 264

Prior Service Cost - Domestic 33 32 26 30 26

Expected Return on Assets -

Domestic

-1,014.00 -902 -767 -1,140.00 -1,347.00

Actuarial Gains and Losses -

Domestic

1,568.00 182 447 3,192.00 210

Curtailments & Settlements -

Domestic

24 0 0 0 35

Transition Costs - Domestic 0 0 0 0 0

Domestic Pension Plan Expense 1,604.00 301 674 3,045.00 148

Interest Cost - Foreign 239 228 208 244 --

Service Cost - Foreign 59 51 41 57 --

Prior Service Cost - Foreign -2 -1 -1 -1 --

Expected Return on Assets -

Foreign

-284 -248 -221 -301 --


Foreign

234 289 308 112 --


Page | 27



Foreign

1 4 0 18 --

Transition Costs - Foreign 2 1 1 1 --

Foreign Pension Plan Expense 249 324 336 130 --

Interest Cost - Post-Retirement 69 81 104 122 128

Service Cost - Post-Retirement 1 2 6 13 15

Prior Service Cost - Post-

Retirement

-34 -44 -44 -43 -37


Post-Retirement

38 34 13 33 46


Post-Retirement

-167 -47 -98 0 0

Post-Retirement Plan Expense -93 26 -19 125 152

Defined Contribution Expense -

Domestic

138 105 158 220 199

Total Pension Expense 1,898.00 756 1,149.00 3,520.00 499

Discount Rate - Domestic 5.25 5.75 6.95 6.5 6

Discount Rate - Foreign 5.4 5.71 6.21 5.68 --

Discount Rate - Post-Retirement 4.7 5.25 6 5.9 5.7

Expected Rate of Return -

Domestic

8 9 9 9 9

Expected Rate of Return -

Foreign

7.06 7.51 7.52 7.65 --

Compensation Rate - Domestic 4.5 4.5 4.5 4.5 4

Compensation Rate - Foreign 3.79 3.87 3.33 3.84 --

Total Plan Interest Cost 1,069.00 1,077.00 1,097.00 1,131.00 1,088.00

Total Plan Service Cost 292 274 230 268 279

Total Plan Expected Return -1,298.00 -1,150.00 -988 -1,441.00 -1,347.00


Page | 28


Appendix D

External Audit for Macro Environment

As per Jobber, D. 2010, the external audit for Macro Environment of HTSL could be assessed using

PESTLE for 3 years as shown below:

The Political/Legal Environment

Event

Label

Major Events Description Specific Impacts of the Events

on the Business

Impact

Score

Event

Probability

(0-100)

P1 Changes to prevent off shoring

software products and services

Increase in Production Cost 6 20

P2 Change in working regulations

which permits only 8 hours/day

Delays in product or services

delivery

5 40

P3 Changes in regulating

technological know – how

Decrease in acquiring Business

proposals from outside India

5 15

P4 VISA not issued for engineers to

go to USA due to restrictions by

the enforced by the law

Flaws in the system due to lack

of knowledge and expertise

6 30

P5 Law to avoid recruiting new

professional from other states

Decrease in the quality of the

deliverables

5 40

P6 Stringent rules for pilot

recruitment

Decrease in Customer demands 5 70

P7 Increase in Value Added Taxes Decrease in profit for

customers due to decrease in

flights

6 60

The Economic Environment

Event

Label


on the Business

Impact

Score

Event

Probability

(0-100)

E1 Increase in Crude Oil Prices Business doesn’t happen 6 100

E2 Recession Decrease in profit for


flights

5 60

E3 High Inflation Decrease in profit for


flights

5 65

E4 Increase in GDP Increase in profit for customers

due to increase in flights

1 70

E5 Decrease in Per Capita income Increase in profit for customers

due to increase in flights

6 63


Page | 29


The Social/Cultural Environment

Event

Label


on the Business

Impact

Score

Event

Probability

(0-100)

S1 Social events at HTSL Increase in cost due to decrease

in productivity

4 100

S2 Organizational culture doesn’t

exists

Increase in cost due to decrease

in productivity

5 10

S3 Racism Decrease in profit for

customers due to decrease in air

travel

5 20

S4 Cultural and heritage growth Increase in profit for customers

due to increase in air travel

1 100

S5 Cultural shocks Decrease in profit due to

decrease in productivity

5 65

The Technological Environment

Event

Label


on the Business

Impact

Score

Event

Probability

(0-100)

T1 Outdated technology for

development

Decrease in profit due to


6 100

T2 Technology innovation Increase in profits due to

innovative features

2 100

T3 Making the developed product

re-usable

Increase in Profits 1 100

T4 Competing for License Decrease in profit due to


5 100

T5 Development tool flaws Decrease in profit due to


6 100


Page | 30


The Green Environment

Event

Label


on the Business

Impact

Score

Event

Probability

(0-100)

GE1 Global warming No business due to drastic

weather conditions

5 100

GE2 Increase in pollution Decrease in Business profits

due to decrease in air travel

5 100

GE3 Lack of water to run

hydroelectric power stations



6 85

GE4 Lack of non renewable fuel

resources


increase in oil prices

7 90

GE5 Reducing Energy consumption Increase in profit due to

decrease in operating expense

2 100

Figure: Analysing the Marketing Environment by PESTLE (Jobber, D. 2010)

Probability

of events

occurring

Excellent Medium Disastrous

Effect of Events on our Business

High

Medium

Low

100

70

50

30

0

1 2 3 4 5 6 7

UTOPIA CATASTROPHE

NEUTRAL

DISAPPOINTMENT TO BE WATCHED

P1

P2/P5

P4

P3

P7

E1/T1/T5

P6

E2

S1

E3/S5

E4

E5

S2

S3

S4/T3 T2/G5

\T5/GE1/GE2

GE3

GE4


Page | 31


Appendix E

External Audit for Micro Environment

As per Jobber, D. 2010, the external audit for Micro Environment of HTSL could be assessed using

Porter’s 5 forces as shown below:

Bargaining Power of Suppliers

Event

Label


on the Business

Impact

Score

Event

Probability

(0-100)

BS1 All suppliers price their supplies

at equivalent prices

Increase in cost of deliverables 5 25

BS2 Only one supplier exists – due to

acquisitions or supplier being

monopoly

Decrease in profits due to

increase in supply costs

6 75

BS3 Only one suppliers provides

quality supplies

Increase in costs of products

depending upon supplier price

2 50

BS4 All the suppliers provide inferior

quality supplies

Decrease in quality of the

delivered product for business

6 10

BS5 Suppliers demand extra price

due to operational inefficiencies

Budget exceeds decreasing

profits

5 15

Threat of New Entrants

Event

Label


on the Business

Impact

Score

Event

Probability

(0-100)

NE1 Many new entrants with inferior

quality products

Increase in profits and market

share of business

2 25

NE2 Only one new entrant with high

quality products

Negotiable decrease in profits 5 75

NE3 Fierce competition among new

entrants

Decrease in product and service

price and quality

4 80

NE4 One entrant having equivalent

product and services


NE5 Entrant selling value for money

products and services by

improving production efficiency

Considerable decrease in

profits

4 35


Page | 32


Bargaining Powers of Buyers

Event

Label


on the Business

Impact

Score

Event

Probability

(0-100)

BB1 Only one Buyer exists Decrease in profits depending

on Buyers capability to pay the

price

5 25

BB2 Of all the buyers, only one buyer

demands the product at high

price

Increasing in profits 2 20

BB3 Many buyers exists with variable

price demand

Increase in profits and market

share of the business

3 40

BB4 No buyers exists No market for the business

exists

7 1

Threat of Substitute Products and Services

Event

Label


on the Business

Impact

Score

Event

Probability

(0-100)

SP1 Inexpensive substitutes with

inferior quality


SP2 Expensive substitutes with

superior quality

Increase in business market

share and profits

2 60

SP3 Expensive substitutes with

inferior quality

Immense increase in business

market share and profits

6 30

SP4 Inexpensive substitutes with

superior quality

Decrease in business market

share and profits

1 50

SP5 Product and service duplication Negotiable decrease in profits 5 15

Rivalry among Existing firms

Event

Label


on the Business

Impact

Score

Event

Probability

(0-100)

R1 Low price than rivals Increase in business market

share and profits

1 75

R2 Provide Maximum Quality Increase in business market

share and profits

2 80

R3 Damage to Brand identity Decrease in business market

share and profits

5 40

R4 Sell the most futuristic products Increase in business market

share and profits

1 85


Page | 33


R5 Product and service duplication Negotiable decrease in profits 5 15

Figure: Analysing the Marketing Environment by Porter’s 5 Forces (Jobber, D. 2010)

Probability

of events

occurring

Excellent Medium Disastrous

Effect of Events on our Business

High

Medium

Low

100

70

50

30

0

1 2 3 4 5 6 7

UTOPIA CATASTROPHE

NEUTRAL

DISAPPOINTMENT TO BE WATCHED

BS1/BB1

BS4

BS3

BS5/SP5/R5

BS2

NE1

NE5

NE4

NE3 NE2

BB2

BB3

BB4

SP2

SP3

SP4

R1

R2

R3

R4

SP1


Page | 34


Appendix F

Internal Audit

The internal audit of HTSL could be assessed using Porter’s Value Chain with differentiation

advantage (Barton, P.R. 20131)

Figure: Porter’s Value Chain (Barton, P.R. 20131)

The Michael Porter’s Generic Value Chain Model could be utilized in order to split the firm’s

business processes into value generating activities which could be used to deduce the competitive

advantage through its activities and create value to its shareholders (Barton, P.R. 20131). The

competitive advantage determined from each of the activities could be either a Cost advantage or a

differentiation advantage (Barton, P.R. 20131). As per Porter, differentiation stems from uniqueness

of performing a particular activity better than the competitors so that it could serve as an advantage

to an organization. The drivers of uniqueness which provide the cost and differentiation advantage

in each of the operations in HTSL are given below:

Inbound logistics

In HTSL, the raw materials for developing Aerospace product and services could be the customer

requirements or the expectations of the product. As there are several such products and services

Inbound

Logistics

Operations

Outbound

logistics

Marketing

and sales

Service

Infrastructure

HR Management

Technology

Procurement

M

a

r

g

i

n


Page | 35


made for each Original Equipment Manufacturer, HTSL creates linkage among these activities to

deliver the best functional product which exceeds the customer expectations to experience a

significant cost advantage.

Operations

The HTSL Operations comprises of the activities that could involve making customer requirements

into tangible product and services. Integration of several requirements which perform unique

functions into a complete product could be termed as an Differentiation advantage.

Outbound Logistics

The timing involved in sharing the product and service which matches or exceeds customer

requirements could be considered as another uniqueness of HTSL that causes a Differentiation

advantage during the Outbound Logistics.

Marketing and Sales

The Marketing and Sales activity of HTSL could involve the customer requirement collection and

sales generation of its product and services. Through learning from experience, HTSL perform this

activity using a Product Line methodology where the customers pick the features they require and

make it as a part of their new product. This could be considered as one of the main competition

uniqueness among other differentiation advantages.

Service

HTSL could bring about the scale uniqueness as a part of making a competitive advantage in its

maintenance operations. The competitive cost advantage lies with the service quality increasing

with the number of customers using the aerospace product and services.


Page | 36


As per Barton, P.R. 20131, the above mentioned activities are supported by Infrastructure, HR

Management, Technology and procurement activities to create a margin.

Appendix G

SWOT Analysis

The SWOT analysis for HTSL Aerospace products and services could be based out of Kotler et al.

1996 SWOT analysis as shown below:

Figure: HTSL SWOT Analysis (based on Kotler et al. 1996 SWOT analysis)

Creative Strategies

Innovation

Sophistication

Decision Support Systems

Strengths

Easy to use

Accurate

Reliable

Customizable

Futuristic

Easy to maintain

Feature-packed

Weaknesses

Not portable

Expensive

Conventional design

Slow

Opportunities

Rising market available in

India and China

Growing needs for fuel and

cost efficient flights

Successful outcomes of

Global Positioning Systems

Emerging Aerodynamic

designs for future aircrafts

Threats

Maturing aviation

business in

developed countries

Increasing Air

Turbine Fuel Prices

Ozone Layer

Depletion

Conversion

strategies

Conversion

strategies

Matching

strategies

Source

Internal

(controllable)

External

(uncontrollable)


Page | 37


Appendix H

Critical to Success Factors

The Critical to Success factors of avionics products and services could be arrived using the

following table which evaluates Competitors and Critical Success Factors as per Kotler et al. 1996:

Competitors/

Critical

Success

Factors

Weighing

Factor

Honeywell

Technology

Solutions Lab

Rockwell

Collins

General

Electric

Thales

Quality 60 9 (540) 8 (480) 9 (540) 7 (420)

Speed 20 5 (100) 6 (120) 7 (140) 6 (120)

Reuse 15 9 (135) 6 (90) 7 (105) 5 (75)

Innovation 5 7 (35) 8 (40) 7 (35) 6 (30)

Total

Weighted

Score

100 810 730 820 645

As assessed from the ratings for critical success factors based on inferences from Aerospace

employees over a period 4 years, HTSL could be rated below its major competitor General Electric

due to the sluggishness of its avionics products and services to provide results. This has also been

mentioned as a weakness in the SWOT analysis.


Page | 38


Appendix I

Product Growth Strategy using Ansoff’s Matrix

The Avionics Products and services have been present since four decades and the markets in which

they were sold have been available for a considerable duration of time. Hence, from the Ansoff’s

Matrix, it could be concluded that the HTSL Product Growth Strategy for existing markets and

products is to perform Market penetration or expansion (Baker, M and Hart, S. 1988).

Existing Products New Products

Existing Markets Market Penetration or

expansion

Product Development

New Markets Market Development Diversification

Figure: HTSL Product Growth Strategy Matrix (Baker, M and Hart, S. 1988 Ansoff’s Matrix)

As per Jobber, D. 2010, to boost the sales volume, the following strategies could be considered:

Increase

Sales Volume

Market

Expansion

Market

Penetration

Increase

Usage Rate

Convert non-

users

Discourage

Competitive

Entry

Buy

Competitors

Win

Competitor’s

Customers


Page | 39


Figure: HTSL Product Growth Strategies (based on Jobber, D. 2010)

Increase Usage Rate

By acquiring business proposals for new aircrafts, HTSL could increase its usage rate of its avionics

products and services.

Convert Non Users

HTSL could approach the non users to demonstrate the advantages of using its avionics products

and services and convert them.

Discourage Competitive Entry

By creating cost advantages in terms of economies of scale and by differentiating products, HTSL

could protect its market penetration by putting in place barriers to discourage competitive entry.

Buy Competitors

HTSL could request Honeywell to buy underperforming competitors to increase its market share.

Win Competitor’s Customers

In order to increase sales volume through market penetration, HTSL could insist Honeywell to win

contracts that are succeeded by its competitors.


Page | 40


Appendix J

Managing Brand and Product Line Portfolios using General Electric

Market Attractiveness – Competitive Position Model

Mckinsey & Co developed the Market Attractiveness – Competitive Position Model which helps to

manage the Product Line Portfolios by setting the Market Attractiveness and Competitive Strength

Criterions (Jobber, D. 2010). Only the criterions that are applicable to the products are selected and

weights are provided to the individual criteria based on their importance (Jobber, D. 2010). The

following table assesses the market attractiveness criteria that are applicable for HTSL aerospace

products and services. The ratings for market factors are based on inferences from Aerospace

employees over a period 4 years.

A – Flight Management Systems

B - Enhanced Ground Proximity Warning Systems

C - Flight data and cockpit voice recorders

D - Mission management systems

Market Factors Relative

importance

weightings (10

points shared)

Factor ratings (scale

1-10)

Factor Scores (weightings

x ratings)

A B C D A B C D

Market Size

3.0 9 9 10 4 27 27 30 12

Market Growth

Rate

2.5 8 5 3 3 20 12.5 7.5 7.5

Beatable rivals

2.0 4 7 1 3 8 14 2 6

Market entry

barriers

1.0 1 2 1 7 1 2 1 7


Page | 41


Social, Political

and legal factors

1.5 2 1 1 4 3 1.5 1.5 6

59% 57% 42% 38.5%

The following table assesses the competitive strength criteria that are applicable for HTSL

Aerospace products and services. The ratings for strength factors are based on inferences from

Aerospace employees over a period 4 years.

Strengths needed

for success

Relative

importance

weightings (10

points shared)

Factor ratings (scale

1-10)

Factor Scores (weightings x

ratings)

A B C D A B C D

Market Share

2.0 8 7 10 4 16 14 20 8

Distribution

Capability

1.0 9 9 10 6 9 9 10 6

Service Quality

3.0 9 9 10 3 27 27 30 9

Innovation

capability

1.5 8 4 3 4 12 6 4.5 6

Cost advantages

2.5 4 5 7 3 10 12.5 17.5 7.5

74% 68.5% 82% 36.5%

As per the General Electric Market Attractiveness – Competitive Position Model, given by

Jobber, D. 2010, it could be seen that the products Flight Management Systems, Enhanced Ground

Proximity Warning Systems and Flight data and cockpit voice recorders are in Zone 2 (Hold) whose

profits could be managed consistently keeping up the market share in an unattractive environment

even though it possess competitive strengths to beat the rivals (Jobber, D. 2010). The Mission

management systems in Zone 3 could be aligned to any one of the strategies namely build, hold and

harvest depending upon the strength of the competition and market attractiveness (Jobber, D. 2010).

Thus, the strategic objectives of HTSL aerospace product and services could be set using the

General Electric Market Attractiveness – Competitive Position Model.


Page | 42


From the above data, the General Electric Market Attractiveness – Competitive Position Model

could be given as follows:

Flight Management Systems

Enhanced Ground Proximity Warning Systems

Flight data and cockpit voice recorders

Mission management systems

Figure: HTSL Brand and Product Line portfolio management (based on General Electric Market

Attractiveness – Competitive Position Model (Jobber, D. 2010))

1

3

2 4

5

High Medium Low

High

Medium

Low

Competitive Strength

Market

attractiveness

0%

0% 100%

100%


Page | 43


Appendix K

Target Markets

As per Jobber, D. 2010, the Target Market for HTSL could be determined using a three step process

as given below:

1. Understanding the requirements and characteristics of those who comprise the market

2. Segmenting the market

3. Targeting each segment in the market

Requirements and Characteristics of individuals and/or organizations that

comprise the Market

Figure: HTSL aerospace product and services requirements (based on Jobber, D. 2010)

Need sensing

capabilities

Need an aero solution to make air

transport safe, secure,

comfortable, efficient, innovative

and productive

Need propulsion

capability

Need power Need control

Need electrical

power

Need auxiliary

power

Need to manage flights Need illumination

capabilities

Need to control

environment

Need to control

sensors

Need landing

capabilities


Page | 44


The HTSL aerospace business division primarily sells aerospace products and services to its

customers. The customers could be individuals or organizations who are related to aerospace

products or those who intend to purchase avionics (aerospace electronics). The characteristic of the

individuals could vary depending upon the behavioural, psychographic and profile facets whereas

the characteristics of the organizations could vary depending upon size, industry and geographic

location (Jobber, D. 2010). Even though the characteristics are diverse, the requirements of the

individuals and organizations that comprise the market for HTSL aerospace product and services

have analogous requirements. The major requirements could be derived from the diagram shown.

Segmenting Consumer and Organizational Markets

As per Jobber, D. 2010, the HTSL aerospace Consumer and Organization markets could be

segmented in numerous ways as described in the section below.

Segmenting HTSL Consumer Markets

Consumer

Segmentatio

n

Behavioural

Psychograph

ic

Profile

Benefits sought for Convenience or

Performance or Price or Innovation or

Simplistic

Purchase when facing a concern

related to aerospace or during

maintenance

One time purchase or patterned

purchase or switching from a

substitute

Purchase for heavy or light usage

Consumer is trendsetter or

conservatives or sophisticated or

simplistic

Consumer is aggressive or silky

towards products and services

Upper Middle or Middle or Skilled

working

Professional Pilot or Business man

Income breakdown as per high or

middle or low levels


Page | 45


Figure: HTSL consumer markets (based on Jobber, D. 2010)

The segmentation of Consumer Markets of HTSL could be done based on behavioural,

psychographic and profile variables as shown (Jobber, D. 2010). The three variables have effect on

benefits sought, the lifestyle of consumers and their attitudes (Jobber, D. 2010).

Segmenting HTSL Organizational Markets

As per Jobber, D. 2010, the segmentation of Organizational Markets of HTSL could be done based

on Macrosegmentation and Microsegmentation as shown below. While the macrosegmentation

takes into account the characteristic of the buying organization size, industry and geographic

location, the microsegmentation takes into consideration the characteristics of decision making unit

structure and process and innovativeness (Jobber, D. 2010).

Organizational

Segmentation

Macrosegmentation

Microsegmentation

Equivalent or Small or Big or

Medium Sized Business

Location of the Organization in

terms of Country or Global

Aero product associated with the

industry Example Engines

Choice made based on

Performance or Price or

Innovation

Decision made by a complex or

large unit or a single member

Highly or moderately innovative


Page | 46


Figure: HTSL organizational markets (based on Jobber, D. 2010)

Target Marketing

As per Jobber, D. 2010, the Target Marketing process is to evaluate each marketing segment

identified against market attractiveness and the company’s capability to compete in the segment.

This enables the company to decide the appropriate segments and set the strategies for that market

segment.

Market

Attractiveness

Market

factors

Aggressive competition prevails due to the

long periods of revenues making

opportunity

Stagnant Segment Growth Rate due to

the regulations governing safe flights by

the Federal Aviation Authority

Profits in the segment are only realized

during flight service.

Segment customers are very sensitive to

price due to high profit margins

expected to survive in the Aerospace

Industry

High barriers to enter market segment

due to the need of excellence in aviation

industry to meet customer expectations

Competitive

factors

Small Segment Size with Airbus, Boeing,

Bombardier, Embraer being the

customers

Low probability of creating a

differentiation based out of customers

expectations of the product

Environmental

factors

Ozone layer depletion because of

increasing Air traffic

http://www.bga-aeroweb.com/Boeing.html


Page | 47


Figure: HTSL Aerospace Market attractiveness (based on Jobber, D. 2010)

The Market attractiveness could be assessed by Market factors, Competitive factors and Political,

social and environmental factors (Jobber, D. 2010). The assessment of market attractiveness in

various segments of HTSL is shown.

As per Jobber, D. 2010, the company’s capability to compete in the segment could be assessed by

analysing the exploitable marketing assets, cost advantages, technological edge and managerial

capabilities and commitment. The assessment of market competence in various segments of HTSL

is described below:

Figure: HTSL Aerospace Market competence (based on Jobber, D. 2010)

Strategies for Target Marketing of HTSL aerospace products and services

As per Jobber, D. 2010, once the evaluation of market segments are done, a market strategy could

be selected for each segment in which the company needs to compete. Undifferentiated Marketing,

Differentiated Marketing, Focused Marketing and Customized Marketing are the four different

strategies that could be selected to compete within a segment (Jobber, D. 2010). The evaluation of

each marketing strategy to the HTSL marketing segments are described in detail.

Capability to

serve the

market segment

Low Cost advantages due to the use of

sophisticated tools (approved by Federal

Aviation Authority) and Six Sigma

Process Compliance

Cost

Advantages

Superior technological edge due to

customization and reusability of products

to satisfy varied customer expectations Technological

Edge

Better quality and reliable products

because of the availability of access to

Honeywell expertise in aviation industry


Page | 48


Undifferentiated Marketing

By using an undifferentiated marketing strategy, only one marketing mix could be developed for the

entire market (Jobber, D. 2010). However, as HTSL provides aerospace product and services to

customers who have varied expectations, an undifferentiated marketing strategy could not be

implemented. Fox example, Boeing would need features for flight management while Embraer

would need features for safety.

Differentiated Marketing

By using a differentiated marketing strategy, specific marketing mixes could be designed to appeal

to all or some of the segments (Jobber, D. 2010). HTSL could implement the differentiated

marketing strategy because the requirements of some customers are related or similar in nature

while other customers have varied requirements. For example, Boeing and Airbus would need

features for fuel efficiency where as Gulf stream would need features for reduction in flying hours.

Focused Marketing

By using a focused marketing strategy, a single marketing mix could be intended to serve one of the

market segments that possess attractive business potencies and not to serve the segments which are

not attractive (Jobber, D. 2010). As there are only limited customers in the market segment, to

sustain market dominance, HTSL could focus on serving the entire market segment irrespective of

the expectations of the customers.

Customized Marketing

By using a customized marketing strategy, separate marketing mix could be considered to satisfy

every customer possible in the segment (Jobber, D. 2010). HTSL implementation of the customized

marketing strategy could result in low profit margins due to the high price associated with

development of aerospace products and services.


Page | 49


Positioning

As per Jobber, D. 2010, positioning is to evaluate and determine the place to compete in market

segment and the customer’s perception of our product and services. Positioning relies on four

factors namely Clarity, Consistency, Credibility and Competitiveness (Jobber, D. 2010). The

position of brand in the market place could be determined through Perceptual Mapping and

Spidergram analysis (Jobber, D. 2010). Spidergram analysis for HTSL aerospace products and close

competitor aerospace products based on performance, innovation, quality, reliability, price,

functionality, customization, maintenance cost is given below. The facets ratings are based on

inferences from Aerospace employees over a period 4 years.

Figure: HTSL Spidergram positioning analysis (Jobber, D. 2010)

Flight Management

systems facets

Honeywell General Electric Rockwell Collins

Performance 6 8 7

Innovation 8 9 6

Quality 10 9 6

Reliability 9 8 5

Cost of products 5 7 9

Functionality 9 8 7

Customization 9 6 4

Maintenance cost 4 6 8

Performance

Innovation

Quality

Reliability

Maintenance cost

Customization

Functionality

Price

Honeywell

General Electric

Rockwell Collins


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Appendix L

Competitor Targets

As per Jobber, D. 2010, the key steps of determining competitor targets are to evaluate competitor

analysis and their strategies. Thus, this could enable a firm satisfy its customers more than its

competitors and gain market share.

Competitor Analysis

The competitor analysis seeks to determine the competitors who provide similar product and

services, their strengths and weaknesses, their strategic objectives and thrust, their strategies for

bring competitive and their response patterns (Jobber, D. 2010). The HTSL competitor analysis

could be depicted as given below:

Similar products are provided by

General Electric and Rockwell

Collins but no substitutes exists

Strengths of General Electric: Performance and Innovation

Strengths of Rockwell Collins: Cost of Product and Maintenance Cost

Weaknesses of General Electric: Customization and Maintenance Cost

Weaknesses of Rockwell Collins: Reliability and Customization

General Electric Strategy: Differentiation leader due to its choice to serve

customers with similar expectations

Rockwell Collins Strategy: Cost leadership due to its cost advantage

Strategic Objective of General Electric: Hold/building depending on revenue

Strategic Objective of Rockwell Collins: Harvest due to their price advantage

Strategic thrust of General Electric: Penetrate existing markets

Strategic thrust of Rockwell Collins: Expansion into developing market

General Electric is a retaliator when it comes to reacting to competition due to

its potential to render similar products and services

Rockwell Collins response pattern is unpredictable maybe due to the

management decisions


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Figure: HTSL competitor analysis (Jobber, D. 2010)

Competitive Strategy

The competitive strategy enables a firm to take a position against its competitors. The position

could be arrived from a strategic thinking about attacking the competition or defending against

competition to achieve the firm’s objective. As per Jobber, D. 2010, the development of competitive

marketing strategies is the result of accomplishment of strategic marketing objectives. The strategic

marketing objectives namely build, hold, harvest, divest and niche (as stated by Jobber, D. 2010)

could be applied to the HTSL aerospace environment to determine whether it could be adopted and

thus achieve market dominance through its strategic focus.

Build

The build objective could be implemented to a market where the sales of products and services are

showing constant growth despite one of competitors undergoing drop in its sales figures (Jobber, D.

2010). The Aerospace product and services market could not be considered to be a market which

has constant growth cause of the limitations set by the Federal Aviation Authority that regulates

business to introduce product and services leading to increased safety of air passengers. Hence

HTSL aerospace could not adopt the build objective of strategic marketing.

Hold

The Hold objective could be executed in a scenario where the market growth has saturated where

the increase in sales of products and services of one of the competitors will affect other competitors

competing in the same market (Jobber, D. 2010). As mentioned while applying the build objective,

due to the regulations which gives more emphasis on safety of air passengers, the Aerospace

product and services could be considered to be a mature market in which Hold objectives could play

a vital role in defending a firm’s current position against its competitors. This objective could be

perfectly applied to Honeywell and its subsidiaries (including HTSL) which have been dominating

a saturated market. By holding on to dominance, the product and services offered could generate


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positive cash flow that could be used to increase quality. Also as per Jobber, D. 2010, HTSL could

enjoy brand image, reduce cost which could aid if the market growth starts to decline.

Niche

The Niche objective could be employed when a firm is pursuing a small market segment so as to

avoid competition (Jobber, D. 2010). As the Aerospace product and services market does not have

any such small segments where there is negligible competition, this objective could not be

implemented by HTSL for the strategic marketing.

Harvest

The Harvest objective could be used to make the firm profitable when the sales figures are declining

(Jobber, D. 2010). However, as per the Honeywell’s Aerospace System financial results from Dr.

Barr. 20131, it could be observed that there is a constant increase in revenue from selling Aerospace

products and service. Hence, the Niche objective could not be implemented by HTSL for the

strategic marketing.

Aerospace Systems 2011 (Million U.S.

Dollars)

2010 (Million U.S.

Dollars)

2009 (Million U.S.

Dollars)

Segment Revenues 11,475 10,683 10,763

In % of Total

Revenues

31.4% 32.0% 34.8%

Operating Profit 2023 1835 1893

Operating Margin 17.6% 17.2% 17.6%

Figure: Honeywell Aerospace System financial results (Dr. Barr. 20131)

Divest

The Divest objective could be performed to a firm which looks to shut down one of its operation of

strategic business units and invest the resulting cash to improve its business dominance in a

different business unit (Jobber, D. 2010). As there is enough cash as a result of operating profit (as

per Dr. Barr. 20131) generated in all the business units that supply HTSL aerospace products and

services, this objective could not be implemented for strategic marketing.


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Appendix M

Competitive Advantage

As per Jobber, D. 2010, the key to a firm’s market dominance over a period is to gain and hold a

competitive advantage by differentiating their product facets through competitive strategies so that

it gets translated into greater customer value. There are four generic competitive strategies namely

differentiation, cost leadership, differentiation focus and cost focus which could be implemented to

achieve superior market share (Jobber, D. 2010). As stated by Jobber, D. 2010, the differentiation

and cost leadership strategies seek to build a competitive advantage in a large and diversified

market, whereas the differentiation focus and cost focus strategies are limited to a small and

specialized segment. HTSL competitive advantage by the competitive strategies could be depicted

below:

Type of

Competitive

Base / Type of

Scope/

Differentiation Cost

Broad Scope

Customization of product and

services using customer

expectations or needs

Long flight test hours

Features exceeding customer

expectations

Kaizen Culture prevails to

increase productivity and cut

down cost to compete in the

market on the basis of price

Narrow

Scope Supply of engines and other

avionics products to Hindustan

Aeronautical Limited under

government contracts

Flight Management Product

and services of Business Jets

and Helicopters are tested with

HTSL trained pilots before

delivery to customer for

enhanced quality.

Instead of rolling down the entire

algorithm for performance of

legacy aircrafts, exceptional

compatible algorithms from other

aircrafts are re used for reducing

cost and increasing quality and

satisfaction level of customers.

Figure: HTSL competitive advantage (Jobber, D. 2010)


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As per Jobber, D. 2010, dominance in market share could be achieved by differentiation strategy

which could in turn lead to the firm’s capturing of the cost leadership position cause of economies

of scales and learning effects. When a firm is achieving in both the differentiation and cost

leadership strategy, an inferior cost product could be priced at premium price leading to high profit

margins from the revenue (Jobber, D. 2010).


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Appendix N

Marketing Mix Decisions

As per Barton, P.R. 20132, the marketing decisions could be as a result of one of the four attributes

namely Product, Promotion, Place and Price. These facets could be controlled based on the internal

and external limitations of the marketing environment (Barton, P.R. 20132). The goal to generate

perceived value and positive responses in the target market centres on all the four aspects (Barton,

P.R. 20132). Each of the ingredients of the marketing mix could be explored as follows.

Figure: Marketing decision attributes (Barton, P.R. 20132)

Product

As per Jobber, D. 2010, one of the vital parts of the marketing mix decision is the product because

they enable customer to satisfy their expectations. The product is associated with two important

facets namely brand and corporate identity (Jobber, D. 2010). The branding is the mechanism of

being different from the competition by means of varying the product (using unique names, styles

Price

Constraints

Constraints Constraints

Constraints

Place

Promotion Product

Target

Market


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of product) and this affects the perception of the customer on the product (Jobber, D. 2010). The

Corporate Identity is another aspect of the company to represent its philosophy, aims and values,

individuality as a mechanism to stand out from its competition and sell its products (Jobber, D.

2010). It varies from branding because it is related with all the stakeholders in an organization and

in terms of the extent to which the communication is made (Jobber, D. 2010). HTSL in terms of

Honeywell has both brand image and corporate identity. However, the former is less vital when

compared to the latter because of the limitation in the range of products in the portfolio and the

number of customers who buy the aerospace product and services. Thus corporate identity could be

analyzed to verify whether it aids HTSL to stand apart from its competitors with an advantage.

Further to this, HTSL products life cycle and portfolio planning could be inferred to confirm

whether they facilitate in achieving market dominance.

Managing HTSL products through corporate identity management

As per Jobber, D. 2010, the corporate identity management is linked with the perception,

development and communication of the organization’s ethos, missions, values which are based out

of culture and behaviour. If the corporate identity of the firm is managed well, it could retain the

customers of the organization in the mature market (Jobber, D. 2010). The corporate identity could

be broken down into five dimensions namely communicated identity, actual identity, conceived

identity, desired identity and ideal identity (Jobber, D. 2010). Organization could possess a

competitive advantage on a long term by validating these dimensions and managing the corporate

identity. As per Jobber, D. 2010, through the AC2ID test, the corporate identity dimensions of

HTSL could be classified as given below:

Actual Identity

HTSL, as an organization, offers a range of product and services that could make people’s life

better every single day. It delivers quality product and services to all its customers through its

competent professionals having world class performance.

Communicated Identity

The communicated identity of HTSL is to serve Honeywell International Inc. which pioneers in

innovating and engineering cutting edge technologies that make people’s everyday life safe, secure,


Page | 57


comfortable, energy efficient, innovative and productive (Ferris, C. R. 20131). The customers,

suppliers, stakeholders, shareholders, employees, local community, government are the core

elements of the communicated identity (Jobber, D. 2010). While controllable communication exists

through public relations, the non-controllable communication takes places through word of mouth

(Jobber, D. 2010).

Conceived identity

HTSL could be seen by relevant stakeholders as an organization which provides products that have

performance, reliability and quality which exceeds the expectations of customers.

Ideal Identity

The ideal identity of HTSL could be to meet customer expectations by delivering world class

products and services which are tested thoroughly for performance longevity.

Desired Identity

The desired identity as per HTSL vision could be to become a premier growth company delivering

unsurpassed value to Honeywell customers by providing Innovative Total Solutions and Services

enhancing the safety, security, comfort, energy efficiency and productivity of the environment

where they live, work and travel.

Having determined the dimensions of the HTSL corporate identity, they could be managed by using

the REDS2 AC

2ID test process shown below (Jobber, D. 2010):

Reveal the five identities

Identity Audit measure

Actual Performance of products and services

Communicated Communications from the organization

Conceived Reputation

Ideal Optimum product features and performance

Desired Vision of the organization

Examine the 10 identity interfaces

Identity Gap Analysis Identity


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Actual All the organization’s communication is portraying the

organization as it is

Communicated

Actual HTSL could be conceived to exceed customer expectations Conceived

Ideal HTSL could meet customer expectations however it is not

mandatory to exceed the expectations of customers

Conceived

Ideal There is a desire to deliver innovative products and services Desired

Desired Vision of innovation is effectively communicated both

internally and externally

Communicated

Diagnose the situation

The reason and implications behind HTSL exceeding customer expectations when it is supposed to

meet them could be analyzed because it translates into additional cost for operations.

Select the interface for attention

Identity Gap Analysis Identity

Actual HTSL could be conceived to exceed customer expectations Conceived

Ideal HTSL could meet customer expectations however it could not

be mandatory to exceed the expectations of customers

Conceived

The perception of meeting the expectations could be aligned with the customer and HTSL.

Strategic Choice

In order to align the perception of meeting customer expectations, the requirements of the

customers could be unambiguous. Adding to it, the organization culture could be improved in such

a way that the product and service by HTSL meet only the definite customer expectations.

Managing products through Product life cycle

The product life cycle is used to conceptualize the various changes that may occur to a product

during its markets presence (Wood, M.B. 2007). As per Wood, M.B. 2007, the life cycle could be

divided into four stages namely Introduction, Growth, Maturity and Decline. Most of the products

and services delivered by HTSL is equivalent to a Flight Management System product life cycle as


Page | 59


given below due to the regulations set on reliability by the Federal Aviation Authority and

Directorate General of Civil Aviation.

By looking into the product life cycle of the HTSL Flight Management System product and service,

it could be deduced that currently the product is in the middle of the maturity stage whose sales

have been saturated and generates high profit.

Promotion

As per Jobber, D. 2010, the promotion is a process by which the existence of a firms product and

services and resulting benefits are communicated to the customers. There are four major decisions

that could be taken for deciding the promotional mix namely advertising, personal selling, sales

promotion, public relations, direct marketing and online promotion (Jobber, D. 2010). Each element

of the promotional mix has its own advantages and disadvantages which could be analyzed before

making them fit into a strategic marketing plan of an organization (Jobber, D. 2010). Exhibition and

Product Placement are the promotional mix that could be applied to the aerospace product and

services sold by HTSL. As per Jobber, D. 2010, these have been considered conventionally as to be

playing a secondary role when compared to advertisements and selling but as they have been one of

the developing areas in the promotional mix, they need to be managed effectively so that all the

elements strengthen each other. Other promotions could not be implemented cause of the

constraints related to the restrictions that prevails in regulation of air worthy products as well as the

negligible number of customers who require the product.

Flight Management Systems

Introduction Growth Maturity Decline

Sales

Profits


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Exhibition

Exhibition is a unique promotional mix as it brings together all the stakeholders related to a product

including buyers, sellers and competitors together in an environment where commercial knowledge

could be shared (Jobber, D. 2010). This could result in increased effectiveness of selling and buying

activities which could be beneficial for both the buyer and seller. The objectives of an exhibition

promotional mix for HTSL could be shown as given below:

Selling Objectives Non Selling Objectives

Current Customers Sustain existing customers

by getting to know their

satisfaction levels

Share information on

products and services

which could aid customers

to resolve their needs

Troubleshoot customers

problem and make a note

of their grievances

Demonstration of products

and services offered by

HTSL showcasing the

features and benefits

Exploring other products

and services and

determining the potential

disadvantage of HTSL

products

Increase the overall

knowledge related to the

product and services

Potential Customers

(Prospects) Meet prospective

customers

Determine the need of the

prospective clients

Share the benefits that is

provided by HTSL

products and services

Get committed to sell

HTSL product and

services

Survey about the brand

image and corporate

identity

Gather information about

the attendees and analyze

the prospects

Display the features of the

products and services to

attract interests.

Assess the competitive

advantage of other products

and services

In addition to the clear objective, considerable pre-event planning is required for the exhibition to

generate positive outcomes which could be evaluated against the objectives (Jobber, D. 2010).


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Product Placement

As per Jobber, D. 2010, the product placement is the deliberate act of placing the firm’s product and

services in the mass media channels to promote value amidst potential customers. As HTSL

products are primarily life critical in nature which are associated with high standards of quality and

reliability, the product placement promotional mix element could be used to sustain competitive

advantage in the market place. For example, Honeywell’s “Primus 660” weather radar system could

be emphasized in Airline commercials which could bring the value of reaching one place to another

safely on time by avoiding adverse weather conditions.

Place (Distribution)

As stated by Jobber, D. 2010, the place element of the marketing mix could investigate the

functions of distribution channels, their types, the key elements of choosing and managing channels

for the physical distribution of goods and services. The firms could take strategic decisions on the

channel intermediaries and channel of distribution in order to facilitate the movement of products

and services from the producer to the customer (Jobber, D. 2010). E-commerce is growing up with

a rapid pace which re-invents all the distribution philosophies (Jobber, D. 2010). As HTSL

aerospace products and services are life critical in nature, under the regulations proposed by

Directorate General of Civil Aviation, the products and services are marketed to customers directly.

Hence channel intermediaries are absent for HTSL aerospace product and services although some

intermediaries will exists for marketing the Honeywell products and services. The consumer

channel of distribution could be classified into four alternatives (Jobber, D. 2010) out of which only

the Producer Direct to Consumer Channel is applicable to accommodate the HTSL aerospace

products and services.

Consumer Channel - Producer Direct to Consumer:

HTSL cuts down the distributor cost by using the Producer Direct to Customer channel. By this

method of consumer channel distribution, HTSL could serve customer better and try to understand

Producer Consumer


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their expectation and suggest products and features which may suit their need (Jobber, D. 2010).

This also enables HTSL to regulate its sales as per the restrictions posted by the regulating

authority. For example, if a customer is looking to purchase a replacement for a Business Jet-

engine, HTSL marketing sales department could be directly contacted to procure the product.

The Business to Business channel of distribution could be classified into four alternatives (Jobber,

D. 2010) out of which only the Producer to Business Customer Channel is applicable to

accommodate the HTSL aerospace products and services.

Business to Business Channel - Producer to Business Consumer:

HTSL aerospace extensively uses the producer to Business Consumer methodology of Business to

Business channel distribution due to expensive nature of the products and services it has to offer.

This will in turn create close relationship between producer and business consumer to solve issues

and concerns in an economical manner (Jobber, D. 2010). For example, Hindustan Aeronautics

limited acquires engines from HTSL for their fighter aircraft which are maintained by HTSL on a

periodic basis.

Price

As per Jobber, D. 2010, producing the products to meet customer needs, distributing them

efficiently and developing promotional plans in order to pull in customers are necessary however do

not create satisfaction in the mindset of the customer. It is important that the customer should feel

that there is sufficient value for the money that has been paid to acquire the product and services.

Thus pricing plays a vital role in sustaining the urge for a product in the customer’s mindset. On the

other hand, pricing could be viewed to be a revenue earner from the organizations stand point of

view (Jobber, D. 2010). It is therefore essential to understand the dynamics of pricing cause they

could be translated directly into profitability facets of a firm. As per Shapiro and Jackson, there are

three methodologies based on which pricing could be done namely, Cost-Orientated Pricing,

Producer Business

Consumer


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Competitor-Orientated Pricing and Marketing-Orientated pricing (Jobber, D 2010). The pricing

strategies could be applied to HTSL aerospace product and services as given below:

Cost-Orientated Pricing

The cost-oriented pricing as the name suggest is the methodology of setting the price by only taking

the cost into account (Jobber, D. 2010). This methodology could be further classified into Full cost

pricing and direct (or marginal) cost pricing as per Jobber, D. 2010.

The Full cost pricing considers only the fixed cost which is invariable to the output produced and

estimates the number of quantities to be sold to arrive at the price of a product (Jobber, D. 2010).

The Direct cost pricing is similar to Full cost pricing but considers the costs which are likely to

increase with output (Jobber, D. 2010). Although the HTSL aerospace product and services have

fixed cost and variable costs, the estimate of the number of units of aerospace products and services

to be sold could not be arrived at the time of pricing. Also as the aerospace products and services

are sold in negligible quantity, the cost-orientated pricing methodology could not be applied to

determine cost for HTSL aerospace product and services.

Competitor-Orientated Pricing

The competitor-oriented pricing takes into account the competitor products price when trying to

establish the price of products and services (Jobber, D. 2010). As per Jobber, D. 2010, it could be

classified into going-rate pricing and competitive bidding.

The going-rate pricing is the process of applying price of the product based on the price of other

equivalent products (Jobber, D. 2010). This methodology could be applied when the competitor

product has no differentiation which is not the case in product and services offered by HTSL

aerospace business. Competitive bidding could be used to apply price of a product or service based

on the lowest price bided by buyers for similar and competing products and services (Jobber, D.

2010). But as HTSL aerospace product and services vary based on many facets and due to the un-

availability of bidders to judge appropriate prices for the products, this methodology could not be

applied to determine the prices of HTSL aerospace product and services.


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Market-Orientated Pricing

As per Jobber, D. 2010, the market-orientated pricing takes into consideration value to customer,

marketing strategy, price-quality relationships, product line pricing, negotiating margins, political

factors, costs, effect on distributors/retailers, and competition/explicability into account for

determining the price of a new product or service. For an existing product and services, such as the

HTSL aerospace products and services, the price could determined based on the strategic objective

namely build, hold, harvest and reposition that has been targeted for each product (Jobber, D. 2010).

For example, if the NGFMS (Next Generation Flight Management Systems) is the product for

which the pricing needs to be done which could be targeting the Hold strategy objective, then the

appropriate pricing strategy could be to maintain the price or match the price of its closest

competition (in this case, the GE’s Flight Management System) to stay competent in the market.

The price could be adjusted as per the competitor’s price adjustments to ensure high profit and

sustain market share (Jobber, D. 2010).

Unbundling related products and services

As per Nagle, T.T and Holden, K. R. 1987, unbundling related products and services is one of the

pricing strategies that could be followed to price an established product in maturity. The goal of this

pricing strategy is to sell all the related product and services into one bundle so that consumers

could use the products and get all the benefits as a complete package (Nagle, T.T and Holden, K. R.

1987). For example, IBM, had sold the total office solution as a bundle which was comprising of

hardware, software, training and maintaining applications (Nagle, T.T and Holden, K. R. 1987).

Making the appropriate combination in the bundle will prevent competitors from entering the

market as a better combination of a bundle could not be offered (Nagle, T.T and Holden, K. R.

1987). As the HTSL aerospace products and services for example Flight Management Systems are

established in a mature market, HTSL could bundle the Flight Management Systems with other

products such as Weather Radar Systems, Flight Data Recorder Systems and sell it under a

competitive price so that customers could enjoy the benefits of Flight Management and Safety. This

could in turn facilitate HTSL to sell many products together at competitive prices as a bundle and

increase market share dominating the competition.


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