Johnson Controls SWOT & PESTLE Analysis

Strength

1. Global leader in sustainability and energy efficiency with diverse product & service portfolio: Johnson Controls provides End to End solution expertise in building environments that deliver energy savings, operational savings and sustainable solutions for homeowners, schools or major military installations across different industries. Its portfolio has 3 leading refrigeration brands and 11 air distribution brands. It is a global leader in engineering, manufacturing and commissioning building products and systems, Additionally, it installs residential and commercial HVAC equipment, industrial refrigeration systems, controls, security systems, fire detection systems and fire suppression solutions. Johnson Controls also provides technical services in the HVAC and security fire-protection space, energy-management consulting and “smart building” services and solutions with the help of its digital platforms and capabilities.

2. Portfolio well aligned with strong secular industry trends: Johnson Controls has a strong portfolio that which consist strong secular industry trends such as energy efficiency, urbanization, smarter and safe buildings and infrastructure and sustainability, including carbon emission reduction. Johnson Controls has an eccentric position to provide these trends. It has the most comprehensive portfolio with a direct channel footprint. It raises a full year guidance with a recognized action to drive advanced margin expansion.

3. Highly respected brand Name: Johnson Controls is regularly featured in U.S. 500 list, ranked 439 in 2020. Ranked as one of the world's most ethical companies by Ethisphere, and also ranked in Corporate Responsibility Magazine's 100 Best Corporate Citizens list. Ranked 78 in Green Ranking Global Top 100 by Newsweek. For six straight years Johnson Controls has been named a Clarivate Top 100 Global Innovator.

4. Inorganic Expansion through Mergers and Acquisitions, Joint Ventures, etc.: Company is extending its edge by means of mergers, acquisitions and joint ventures. A joint venture with Hitachi completed last October, Johnson Controls is adding respected name to its portfolio to broaden its reach in several Asian markets: China, Taiwan, Japan, and India. Also, merger with Tyco International exemplifies its commitment to deliver more efficient solutions to its clients. Also, Johnson Controls is spinning off of its automotive business to focus on its core competency by operating in building efficiency and power solutions. In 2021, Johnson control acquired Cool Solution, a UK contractor which is a well known service provider of air conditioning and refrigerator. According to Johnson Controls it will improvise its HVAC offering across numerous customer segments.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

1. Strong compliance framework across the supply chain: A socially and legally responsible corporation needs to implement strong compliance standards for suppliers, so that there are no legal, ethical or social violations. Johnson Controls has several manufacturing operations and suppliers that are located outside the United States. Johnson Controls has established Procurement Policies, Policies on Conflict Minerals, Guidelines for CSR in Supply Chain, Guidelines for Green Procurement, and Technical Requirements so that its products and solutions are safe and compliant and do not violate any sustainability standards.

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Environmental

1. Development of environmentally responsible products, services and operations: Focusing on environmental sustainability in its products, services and operations is a key to Johnson Controls’ ambition to create a positive impact in people’s lives. Further the diversity of product portfolio and markets served by Johnson Controls, increase the complexity and business risks across the supply chain. The company’s innovation team focuses on building products which not only help customers to be more efficient and productive but also reduce their energy consumption and emissions. Focusing on environmental sustainability in its products, services and operations is a key to 'Johnson Controls'. Its ambition is to create a positive impact in people's lives. The new digital platform, OpenBlue which was launched in 2020, leverage Artificial Intelligence to optimize building sustainability. OpenBlue is based on its three key pillars: healthy people, healthy spaces and healthy planet. The new commitment will enable Johnson Controls in carbon emission reduction and work closely with its customers to attain sustainability goals. It focuses on optimizing customers asset performance, thereby enhancing occupants experience and reducing energy intensity and carbon footprints. Thus in 2004 Johnson controls became one of the first companies to be a UN Global Compact Signatory , in 2007 it was chosen as a world's most ethical company for the first time as of 2021 on the list 14 times, whereas in 2010 it was named to COP A list. Johnson controls became one of the first industrial companies to issue a Green Bond in the U.S Dollar Debt Capital markets in 2020. Since 2002 it has reduced its global greenhouse emission intensity by over 50 percent. Johnson Controls’ portfolio of products and solutions help organizations analyze and reduce environmental emissions while maintaining operational excellence.

2. Organizational initiative: Better Buildings, Better Plants Challenge for improved energy efficiency: Energy efficiency is a key factor to achieve sustainability in industrial organizations. This is all the truer for Johnson Controls which is a leader in the building technology and energy storage sector. The organization-wide implementation of Energy Hunt program which covered 79 facilities across 16 million-square-feet has helped in achieving a threefold increase in identified energy savings projects. The program has also helped the company achieve its Better Plants Challenge goal. Johnson Controls has also implemented pilot Energy hunts at its supplier facilities which have helped in energy savings in the range of 5-10 percent.