Bombardier (BBD) business has evolved from the early years of snowmobile manufacturing to a diversified business in the transportation industry. Now, more revenue comes from its aerospace division in comparison to recreational products and even transportation. BBD wanted to expand its transportation division (BT) and had recently concluded the negotiation of Adtranz, a company twice the size of BT. Using the Strategic Analysis Framework, below is the rationale to justify the acquisition of Adtranz for BBD.
RATIONAL FOR ACQUISITION
Using the Strategic Analysis Framework (Appendix 1) below are the reasons why Adtranz was a strategic target for BBD:
Environment opportunities: The European transport market was expected to grow, on the back of demand from Asia and South American countries. Also, the push for green movement with government support provided a long term growth opportunity in Europe.
Stakeholder aspirations: BBD’s main business had become aerospace, which was a cyclical business and it was important to strengthen the other division to balance the industry exposure of BBD and provide stable growth and cash flows to the business.
Organization capabilities: Over the past few years BBD has incorporated many mergers successfully. The team had the capabilities to add value through acquisition by application of its existing competencies.
Given Adtranz recent changes resulting in an unstable culture and structure, it presented BBD with an opportunity to not only improve and
r market by entering into strategic code-sharing agreements with international carriers, such as Cathay Pacific , and American Airlines
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.
Danville Airlines has created an ethical and legal dilemma by not being accurate, precise and clear on how they are doing medical testing, causing undue stress and potentially career-ending circumstances for David Reiger, one of their best pilots. What Danville did was illegal and unethical due to negligence. David Reiger has every right to sue them to continue flying, and the medical evidence suggests that the Huntington's disease gene can be dormant for decades before being active and changing a person's nervous system (Darden, 2004). The company has violated the 1974 Privacy Act, the Heath Insurance Portability and Accountability Act of 1996, and the 1990 Americans With Disabilities Act. As is best practice with the nascent, emerging field of genetic testing, Danville did not warn Reiger of the testing taking place, did not get his permission, and didn't even have a process in place for dealing with pilots, whom the traveling public relies on for safe transport, when they are tested positive for these types of diseases (Murry, Wimbush, Dalton, 2001). Clearly Reiger would win any lawsuit, the collateral damage to Danville being the lack of oversight and gross negligence in managing health screening.
Airbus was planning to introduce the A380 in direct competition to Boeing 747 to compete in the large aircraft sector. The rivalry between Airbus and Boeing was already intense. Boeing’s market share reduced from 70% in 1974 to 45% in 1990 while Airbus’s market share had increased from 1% to 34% during the same time (Exhibit 5). Encouraged by this increase in market share, Airbus was contemplating the introduction of A380. Development of new product line is extremely expensive in the Aircraft sector. Following is a quantitative analysis of the project to calculate the risks involved in introducing a new line of Aircrafts.
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
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.
The business level strategies for Boeing commercial are deliver customer value, lead with innovation and fuel growth through productivity. Boeing Commercial Airplanes, a business unit of The Boeing Company, is committed to being the leader in commercial aviation by offering airplanes and services that deliver superior design, efficiency and value to customers around the world (Boeing.com, n.d).
For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.
With the cross border acquisition of Adtranz by Bombardier Inc. (BBD) it enabled Bombardier Transportation (BT) - a division of BBD - to enter the local European markets, obtain know-how and access to European engineering concepts needed in emerging markets like Asia and South America and other markets or influential groups demanding European equipment and technology. Apart from this, it would clearly strengthen BT¡¦s global reach.
Air Canada arranges a proactive strategic procurement plan to obtain different goods and services that are vital and fundamental for company growth. These strategies are based on analysis of their historical spending and on educated forecasting of requirements and opportunities. Air Canada is able to create and improve important relationships with key strategical suppliers due to their pronounced buying volume allowing them to acquire greater leverage.
For instance, Canada's federal government has delegated the responsibility for airports to local authorities. As a result, many Canadian airports have transformed into brighter, cleaner, and more modern facilities that have become more expensive to operate 3. Canada’s airports have spent more than $9.5 billion on improvements since 19922. According to the CEO of Transat A.T. Inc, “it costs three times as much for an airline to land in Pearson Airport in Toronto as at Charles-de-Gaulle in Paris” 2. Such high landing fees have made Pearson and other major Canadian airports less desirable landing destinations; increasing costs for airlines, and as a result, often increasing prices for consumers. Pearson Airport is West Jet’s “second-largest hub and main connection point in Eastern Canada” and almost half of its destinations are to Canadian airports2, Such high costs of landing in major Canadian cities require that WestJet finds more ways to cut costs and remain the cost leader in its industry.
Since we do not have figures for the second half of the year 2014 we have compared balance sheet as at December 31, 2013 with balance sheet as at June 30, 2014. Only six months into 2014 and current liabilities are already more than what they were last year. On the half year mark current assets in 2014
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).
In 2014, the second year I contribute to the organization, we will launch a brand that has been planned for the past year. At the same time, I am entrusted to be in charge of one of the work programs in the business division that will be a container for launching the brand, namely convection. This is one of new experiences and challenges. I did a supplier survey and searched for a convection link for the product we were about to launch. At that time I thought, I should have a great link to bombardier brand we do can spread to many parties. I'm looking for cooperation with events. With all the efforts I have made, I managed to cooperate with two big events and become a vendor for all merchandise in the two events. In addition to the smooth launch
The purpose of this report is to examine and analyse the problems that Airbus has encountered while they were developing the A3XX and to recommend methods that Airbus could have implemented and things they could have done differently to prevent them from arriving at those roadblocks.