For the longest time, United Technologies (UTC) a $53.2 billion company appeared to be content with its pioneering history in India. Its subsidiaries installed the group’s first elevator in 1898 at the Raj Bhavan in Calcutta, the first set of air conditioners at the Rambagh Palace in Jaipur in 1930, and delivered the first S-55 helicopter to the Indian Air Force in 1954.
But until 18 months ago, few knew UTC as the parent company of such powerful, acquired brands as Otis, whose founder Elisha Otis invented the modern elevator; Carrier, whose founder Willis Carrier created the first large-scale electrical air-conditioner; Sikorsky, founded by aviator Igor Sikorsky who designed the first successful helicopter; and Pratt & Whitney, an innovator in jet engines.
In the recent past, however, when fellow multinational companies made a beeline to India, beating their chests with battle cries for market share — a move accentuated by sluggish growth in Western markets — UTC watched demurely as competitor General Electric, a $157 billion behemoth, revolutionised the face of global outsourcing and R&D with its India investments.
By contrast, UTC grew steadily in China, reaching current revenues of a modest $3 billion through more than 40 local partnerships. Next door, the Tiger was roaring, but the group held on to everything that went against first mover advantage: Centralisation of decision-making and execution, low thrust on product localisation, inability to capture market share through cross sales, insignificant investments in local R&D, and slow pace of acquisitions and joint ventures, all of which GE, which launched its first air-conditioner in India last year, had turned into case studies at business schools.
But there’s good reason why UTC is a Wall Street darling. The conglomerate is known among analysts as a silent giant, a juicy cash cow and a conservative player who risks the least at the board.
Therefore it comes as no surprise that UTC would test infrastructure-ready China first — a market that offered fertile ground for commercial sales — although its military segment, unlike in India, was out of bounds to US corporations. Ten years ago, UTC’s revenue from China stood at $500 million, the same number currently from India. Executives are gearing up with startling alacrity to meet a five-fold growth of $2.5 billion by 2015. Meanwhile GE is gunning for four times that amount at $10 billion by 2015.
It was only last year that the tortoise quickened its pace. UTC opened an India headquarters in New Delhi headed by Zubin Irani, managing director (commercial), under the temporary oversight of US-based Jothi Purushotaman, president, India, whose mandate from the chairman and CEO Louis R. Chenevert was to empower the team on the ground, a bold move for a bureaucratic organisation that is making strides in de-centralisation.
“It is very, very important to have a UTC headquarters in India because customers and suppliers want to know who people report to at the end of the day. Now they are all based here and we can say that UTC is totally committed to India,” says Purushotaman, who retired in January 2011. UTC won’t fill his position, further cementing efforts to decentralise.
“Our infrastructure divisions — Otis, Carrier and UTC Fire & Security — will lead the growth in India. We set up a simple strategy, grow revenue, grow talent, and grow sourcing,” Purushotaman says. “Our strategy is to enhance localisation in India as much as possible. It’s different for each division. Commercial will go up to 70-80 percent eventually.”
Over the last year, under his watch, UTC relocated a slew of senior management to India, increased its domestic employee base by 10 percent, chalked out a path to increase local sourcing, executed deliverables including the Tata-Sikorsky S-92 helicopter cabin and built a strong acquisition pipeline.
In line with its strategy to roll out products that cater exclusively to the local market, Otis began manufacturing in Bangalore, the Gen2 Comfort elevator line that can handle electricity fluctuations better, and reduce overall energy consumption. Meanwhile, UTC Fire & Security opened a Hyderabad-based India Innovation & Engineering Center to meet growing demand for fire and security products in India’s infrastructure and energy industries. Carrier also launched an energy efficient air-conditioning line for the Indian market.
Additionally, the group launched a branding campaign with ads that linked subsidiaries to the parent organisation to optimise cross sales. “A lot of our customers are the same, for example, like the mega city project GIFT in Gujarat. We have to get involved upfront to spec and design the equipment, and manage the after-market service. UTC’s suite of companies can bring all this together,” Purushotaman says, adding that Irani will help create this cross-selling synergy.
Jonathan Salem Baskin, a US-based brand strategist who has consulted for Apple, JP Morgan and Nissan, said offering an integrated versus a separate business approach, as in the past, represents a huge change in strategy.
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(This story appears in the 06 May, 2011 issue of Forbes India. To visit our Archives, click here.)