1. Introduction: Problem Statement
The announcement of an outdated CRJ1000 instead of the highly anticipated CSeries came to a shock to analysts and shareholders. It has now become unclear to investors what Bombardier’s future strategy will be within the aerospace industry.
2. External analysis
Technological: Due to the competitive nature of the industry, it is important to stay ahead of the pact in term of technology; continuously improving energy efficiency of the carriers.
Economic: The industry’s performance is highly tied in with the economy. A weak economy will mean weak sales.
Industry analysis: Porter’s five forces model
Bombardier Aerospace’s industry would be most clearly defined as the airline industry. *
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(See exhibit A)
Intangible Resources
Innovation Resources: Bombardier designed the model C110 that would compete with the Airbus and Boeing at a significantly lower operational costs and significant fuel consumption improvements.
Reputational Resources: Bombardier has been known to be the world leader in business and regional aircraft manufacturing.
* Capabilities:
Manufacturing* * Design and production skills yielding reliable products. * Product & design quality
Research & Development * Innovative technology
* Core competencies:
Innovative Technologies:
Valuable: Yes, it is valuable to Bombardier because it gives them an edge over the competition.
Rare: Yes, it’s not easy to innovate
Costly to Imitate: Yes, Millions in resources should be spent on innovation.
Non-substitutable: Yes, there are no strategic equivalents.
* Value chain analysis: what are the activities that should be improved? Should be outsourced?
Given the state of the financial analysis, it is evident that their resources are not being distributed properly and therefore their operation efficiencies need to be reviewed.
* What are the firm’s business-level and corporate-level strategies?
Business-Level:
Cost leadership, because the demand of aircrafts requires Bombardier to create more operationally efficient and fuel efficient aircrafts due to the rising level of demand of low cost carriers.
Bombardier has grown substantially via acquisitions since 1989. These acquisitions allowed Bombardier to expand operations, however, in doing so they inherited multiple different information systems, processes and business practices. Bombardier, had become a textbook silo company.
They faced challenges from acquiring many companies because during the acquisitions Bombardier inherited the data, processes and systems of each company which created inefficiencies. Systems didn’t communicate with each other resulting in low inventory turns and price inconsistency. This was not productive for Bombardier and was time consuming for the employees. The biggest problem was the low visibility of inventory and the lack of communication between systems. Bombardier had now a global presence but was not organized to maintain growth without changing the vision and processes. Another challenge is resistance to change, this factor can have a huge impact on the new vision and
We interview the site general manager for a company called Bombardier Transportation. His name is Jeff Gaffney. His official company title is MARC Operations General Manager. Bombardier Transportation is one of two subsidiaries of the company. The other half is Bombardier Aerospace. The parent company is called Bombardier Inc. Bombardier Inc. is headquartered in Montreal Canada. Jeff Gaffney is only involved in the transportation division of the company which is headquartered in Berlin Germany. Bombardier is the leading manufacturer of trains and the third leading manufacturer of planes. The company as a whole has roughly about 72,000 employees with a revenue averaging around $16.8 billion. These numbers are statistics split between the two divisions of the company. As stated before Mr. Gaffney is involved in the transportation division of the company so that is what the interview was primarily about.
Air Canada has been in the business of air transport for an extended period of time. Due to the experience and the exposure of the carrier in the field, it has made a commendable progress through many strategies as well as customer proximity. One of the approaches taken by the airline involves the identification as well as an implementation of cost reduction initiatives in a bid to increase revenue from its operations (Air Canada, 2016). It is also attempting to connect with the existing carriers across the world to connect the current customers to the international world. This approach has been adopted to increase its competitive advantage over other existing airlines.
• World wide learning- Adtranz would gain the managerial and corporate structure of Bombardier Transportation, which could ensure the stability of Adtranz in Bombardier Transportation.
As a company, WestJet does not show a lot of weaknesses. However,the lack of international and Trans-Continental flights in the world of rapidly rising economies, international business and marketscould be count as a weakness. Customers may not be provided with the international destination they are looking for and could be turned to competing airlines. When higher-class travellers are looking to fly with some added comfort and special service, WestJet does not provide any sort of first class seating which can be a factor of lost business. However, December 2012 WestJet launched“premium economy” class flights program, which is designed to satisfy particular customer’s demands with extra legroom and services. Travelers have also dissatisfied with the fact of lack ofseats for larger passengers, becauseWestJet airplane’s seats aren’t big enough. Moreover, some passengers do not agree with the complimentary snacks only being served on flights two or more hours in length. In addition, Due to small crafts WestJet may become a victim of stereotype of low-cost, low-fare, and short-haul scheduled air carrier only.
Bombardier specializes in modifying and equipping its aircraft to meet the customers’ needs, in a variety of platforms. The Global platform is capable of flying at high altitudes and low speeds for up to 16 hours without refueling, giving it a greater look-down capability. The Global platform allows for installation of mission sensor equipment due to it high ground clearance, as well as having a damage tolerant structure, making this aircraft ideal for low-level flight inspection as well as high-level surveillance missions. The Challenger platform with its spacious cabin can be configured for high density seating, specialized mission consoles, or the traditional VIP interior. With its long range and endurance, the Challenger is well suited for flight inspection, intelligence, surveillance, or reconnaissance missions. The Learjet platform has proven itself to be one of the most trustworthy special mission aircraft, due to its rugged strength, speed and agility. With its short field capabilities as well as predictable handling and performance characteristics, Learjet has become the industry leader in aero-medical field. The Q Series with its documented endurance and flexibility gives it the ability to shadow a target for extended periods, making it ideal for airspace security, costal surveillance, as well as maritime patrol (“Specialized Aircraft,”
WestJet has some kind of tips for cost cutting such as using one type of plane while Air Canada is struggling with labor union problems. WestJet is running its operation smoothly without creating union as WestJet keeps their staff happy which is really appreciative (Sturgeon, 2015).
Overview Bombardier Aerospace is a division of Bombardier Inc. and the third largest global airplane manufacturer after Boeing and Airbus. Its headquarters are in Quebec, Canada, and with 33,600 employees is poised to become a major player in helping the developing world acquire aircraft. The C-Series is a family of narrow-body, twin-engine, medium range jet liners which, despite some challenges in orders, remains a committed product line. It is designed for the 100-150 seat market, which is about 20,000 aircraft globally and represents about $250 billion in revenue over the next few decades. One interesting fact about the C-Series is that it is truly global in components and supply, sourcing from manufacturers in China, Italy, The Netherlands, France, the United States, and Great Britain (Change is in the Air, 2012).
Over the years Air Canada’s business strategy has changed and has been reconstructed a number of times. Air Canada’s mission has always remained the same, “connecting Canada and world” (Air Canada, 2016), but their visions and goals, have transformed.
➢ Unique Corporate Culture: The main competitive advantage that WestJet had was their unique culture. Even the executives and pilots help the customer whenever necessary; encourage employees to share suggestions for improvement. They maintained the policy of Care for People.
One of the first things that Cheryl Smith did when she start to work at WestJet, was to bring two performances expects to carry out a benchmarking study with similar companies in the transportation industry. The objective of this study was to compare WestJet’s IT cost, resources and budget to the industry standards. With the results of the study, Cheryl was able to find out that the IT group of the company was technically competent and mostly were since the
Nevertheless, as Boeing gears up for its all-new 7E7 airliner, arch rival Airbus may already be putting 7E7 orders at risk by talking to airlines about a similar plane. Airbus is viewed a having advanced technologies coupled with a conglomerate backing and Boeing has not come up with any new innovative ideas in the last ten
obstacles, but also took advantage of opportunities for growth. In particular, the area of new technology has allowed the company to integrate and reorganize very effectively. In this way, customer brand loyalty has been fostered anew by adding value and by differentiating Boeing itself from its competition (particularly Airbus), as we shall see further on in the essay below.
The corporate strategy that drives Bombardier successful is based on the concept of shared value: creating better ways to move the world meets a fundamental societal need. It is the necessary answer to urban congestion and sprawl, escalating oil and energy prices, environmental challenges, and the overwhelming need to connect people to opportunity and to each other (bombardier, 2014). Another important factor of success is having a solid CSR strategy. CSR can act as an advertisement component for bringing new investors and stakeholders to the company. Part of the strategy is to keep people in communities involved to the company’s project. Bombardier has been involved in research with universities which uses of new graduate students and intern .This also means create more jobs for the communities and one of the consequences is facilitate of communities growth (mediacentre.bombardier, 2013) .