What strategies are companies in Industrial Automation & Controls using to win

In Industrial Automation & Controls, the following strategies are implemented by companies to win:

1. Build and Scale a Proprietary Digital Ecosystem

A core strategy is to move beyond selling physical components and create an integrated digital platform. This creates a recurring revenue stream, captures valuable operational data, and increases customer dependency.

Example: Honeywell Example: Honeywell is focused on driving the adoption of Honeywell Forge, its "leading Internet of Things platform for industrials." The goal is to "bridge the physical and digital worlds" and use the platform to deliver innovative solutions based on data.

Example: Eaton Example: Eaton aims to Expand Digital Solutions Portfolio to complement its hardware. It is also deepening its technology focus through an expanded relationship with Palantir to leverage its AI platform for both internal productivity and customer value.

2. Aggressively Restructure the Portfolio for Focus

Companies are actively shaping their business portfolios to concentrate on high-growth automation and digitalization markets. This involves both divesting non-core assets and acquiring new capabilities. The strategic approaches, however, differ.

Example: Honeywell Example (Radical Focus): Honeywell is undergoing a radical transformation by separating into three independent public companies, including a dedicated Automation business. This is a move designed to create highly focused, agile market leaders.

Example: Eaton Example (Incremental Focus): Eaton's approach is more evolutionary. It focuses on Strategic Portfolio Management by divesting slower-growth businesses to "strengthen its Electrical and Aerospace segments" and better serve high-growth markets like data centers and utilities.

3. Embed AI Across the Value Chain

Both companies are integrating Artificial Intelligence to improve their own operational efficiency and to create smarter, more valuable solutions for their customers.

Example: Honeywell Example: Honeywell is working to Deploy AI Across Functions like product development and sales and is enhancing its proprietary Accelerator operating system with AI capabilities to "operate smarter and faster."

Example: Eaton Example: Eaton is very specific in its goal to Implement AI-Driven Process Automation across its manufacturing and supply chain. For customers, it plans to use AI and data analytics to Implement Predictive Maintenance Programs.

4. Link Automation Solutions to Sustainability and Energy Transition

A winning strategy is to position automation and control products as essential tools for helping customers achieve their sustainability and energy efficiency goals, capitalizing on the global energy transition megatrend.

Example: Honeywell Example: Honeywell aims to Develop Sustainable Technologies that help its customers meet their own environmental goals. Its strategy is explicitly focused on the "energy transition" as a key growth area.

Example: Eaton Example: Eaton frames its entire identity around being an "intelligent power management company" capitalizing on Electrification and the Energy Transition. A key goal is to Develop Sustainable Product Solutions that help customers reduce their carbon emissions.