New Strategic Plan for Bombardier Inc

New Strategic Plan for Bombardier Inc.
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Executive Summary
Bombardier is a Canadian aerospace and transportation company, and this study provides a comprehensive evaluation of the firm as it faces challenges and plans for the future. Competitive pressures, brand positioning, innovation, legal constraints, and supply chain vulnerabilities were all included in the analysis. Bombardier has shifted its strategy in response to intense rivalry, aging aircraft models, and the possibility of expansion into the defense industry. The VRIO research showed that the company had a solid brand position, which helped it stand out in a crowded industry. Bombardier's business-level strategy seeks to leverage its innovative capabilities by enhancing product features, investing in advanced technology, and empowering sales teams to engage in differentiated selling.
The proposed corporate strategy of horizontal integration would expand Bombardier's product line, thereby reducing the company's exposure to supply chain risks. These plans, however, must be carried out ethically, with governance measures taken into account to guarantee openness and justice in all activities. Moreover, Bombardier possesses several key strengths that position it favorably to overcome its challenges. These strengths include its strong brand reputation, substantial financial resources, and significant innovative potential. Correspondingly, By taking a comprehensive approach, Bombardier anticipates overcoming challenges, improving strengths, and maintaining its status as an industry leader. Table of Contents Executive Summary. 2 Organization’s Overview.. 4 External Analysis. 4 PESTEL Analysis. 4 Political Factor 5 Economic Factor 5 Social Factor 5 Technological Factor 5 Legal Factor 6 Environmental Factor 6 Porter’s Five Forces. 6 Barriers to Entry. 7 Suppliers’ Bargaining Power 7 Buyers’ Bargaining Power 7 Threat of Substitutes. 7 Competitive Rivalry. 8 Internal Analysis. 8 VRIO Analysis. 8 Expansion Effectiveness. 9 Access to Capital 9 Brand Extensions. 10 Financial Resources. 10 Product Portfolio Synergy. 10 Leadership. 10 IT and Digital Sources. 10 Strategy Statement and Reflection. 11 Strategy Proposal 11 Business Level Strategy. 11 Corporate level Strategy. 12 Horizontal Integration. 13 Related Diversification. 13 Strategy Implementation. 14 Business Strategy Implementation. 14 Corporate Strategy Implementation. 15 Conclusion. 16 References. 18   Organization’s Overview
Bombardier Inc. is an industry leader in creating, producing, and distributing regional and business jets worldwide. The business is skilled at providing all-inclusive support solutions, including maintenance services, aftermarket services, and specialized training programs. The company has a vast portfolio that includes business and commercial aircraft. Bombardier functions through its wholly-owned service centers, a network of authorized service centers, maintenance facilities, and entirely owned line maintenance stations to ensure unmatched customer service (Bombardier, 2023). According to Reynolds (2023), Bombardier has had to deal with the aviation industry's supply chain disruptions as of late, which have hampered their productivity and could have increased costs. Additionally, there have been difficulties in brand perception and resource allocation due to entering novel markets, such as military defense, while competing with established competitors like Boeing (Dion, 2023). The company's strategic decision to broaden its product line and compete in high-stakes markets calls for vigilant stakeholder expectation management and a nuanced approach to juggling its existing business with its new endeavours.
External Analysis
Focusing on enhancing the value for business with improved competency, analyzing the external environment based on the macro factors and competitive intensity is significant, as discussed below.
PESTEL Analysis
The macro-environmental factors affecting Bombardier Inc.'s external environment are thoroughly outlined in the PESTEL analysis. As per Hill and Schilling (2019), PESTEL analysis offers insight into the possibilities and risks facing the business in the Canadian aerospace industry by assessing the following factors.
Political Factor
Governmental decisions, both supportive and restrictive, have impacted Bombardier's strategic choices within the aerospace sector. Reynolds (2023) illustrated that the business is in a position where its independence could be risky because it depends heavily on governmental financial assistance. Canada and the United Kingdom are both significant contributors to the project's funding, which raises the risk that political whims will cause funding inconsistencies. Nevertheless, adopting a "made in Canada by Canadians" approach presents a potential advantage in utilizing nationalism to secure a larger share of the domestic defense market.
Economic Factor
Financial statements reveal concerns about revenue compared to investment, highlighting the severity of Bombardier's economic difficulties. Overhead expenses higher than income highlight financial vulnerability and pose a risk to the company's long-term viability. Business jets are in high demand but limited supply (Reynolds, 2023). Thus, it creates a market opportunity, as does the expected expansion of the global business jet industry.
Social Factor
A social barrier to Bombardier's entry into the defense market is the company's reputation as a luxury goods maker for wealthy consumers rather than weapons. Ineffective management of this social image could pose a risk (Chan & Tai, 2022). Nevertheless, the growing fascination with private jets has the potential to offer a favorable social prospect if effectively utilized.
Technological Factor
Bombardier currently seems to be combining both internal innovations and the hiring of external experts. Relying on outside specialists for urgent technological needs can be expensive and may not provide long-term benefits. Sarsfield (2019) magnified that adopting more autonomous models by competitors such as Embraer could pose a threat. The challenge is further compounded by the fact that the proposed alternative to Boeing's offering is currently only a conceptual idea without any physical manifestation.
Legal Factor
The large-scale involvement of the government through lending and subsidies has political and legal ramifications. Dependence on outside funding by the company can result in convoluted legal frameworks and agreements that could impede decision-making or change strategies, posing a threat (Dion, 2023). In addition, competing with established industry leaders such as Boeing could potentially result in patent infringement or other legal conflicts in the future.
Environmental Factor
The environmental standards of the aerospace industry, including Bombardier, are under increasing scrutiny as the world works to reduce carbon emissions. The data provided did not specifically address environmental issues for Bombardier, but the entire aviation sector is pressured to adopt environmentally friendly practices and technologies (Chan & Tai, 2022). It presents both a challenge in compliance and potential reorganization and an opportunity for Bombardier to pioneer environmentally friendly technologies ahead of its rivals.
Porter’s Five Forces
Porter’s Five Forces model offers an all-inclusive framework for comprehending the competitive environment for Bombardier Inc. within the aerospace industry (Hill & Schilling, 2019). This study examines Bombardier’s strategic positioning in the market and the factors that affect its intensity of competition and potential for profit.
Barriers to Entry
Given the complex barriers to entry in the aerospace industry, Bombardier’s position as an established player is to its advantage. Significant capital expenditures, technological know-how, adherence to strict regulations, and a robust supply chain are all necessary for this industry (Chan & Tai, 2022). While Bombardier has established a strong position, the emergence of companies from rapidly industrializing nations may present a potential challenge in the future.
Suppliers’ Bargaining Power
Due to the complex nature of aircraft manufacturing, Bombardier relies on a well-established network of suppliers to provide the necessary parts and systems. The availability of specialized parts is constrained, in contrast to the widespread availability of standard components (Hakim, 2023). When there are disruptions in the supply chain, as has been observed, this concentration can give suppliers some bargaining power.
Buyers’ Bargaining Power
Airlines and governments are just two of the industry’s few significant clients. These buyers can bargain for better pricing or terms when they place large orders. Nevertheless, Bombardier’s ability to provide high-quality products, adhere to safety standards, and incorporate technological advancements can potentially mitigate the influence of this bargaining power.
Threat of Substitutes
There are no direct substitutes for aircraft in the aerospace industry. However, high-speed trains and other alternative modes of transportation can be seen as competitors in some areas (Sarsfield, 2019). Additionally, new aircraft leasing models could be Bombardier’s business jet division.
Competitive Rivalry
Boeing, Airbus, and Embraer hold the lion’s share of the aerospace market. Each has a distinct market, with some overlapping categories for Bombardier (Sarsfield, 2019). There is intense competition, and businesses always develop new ideas to provide better efficiency, technology, and pricing.
Internal Analysis
After demonstrating the external threats and opportunities, determining the internal strengths and weaknesses are imperative to attain strategic competency within the business. Therefore, the VRIO framework is analyzed.
VRIO Analysis
Bombardier, a prominent multinational corporation in the transportation industry, consistently explores opportunities to optimize its resources to maintain and enhance its competitive advantage (Bombardier, 2023). By employing the VRIO framework, the brand can assess the vital resources and examine its ability to offer the business a long-lasting edge within the ever-changing aerospace and transportation sector.
Table 1: VRIO Analysis for Bombardier
Considering the VRIO table, Bombardier's strategic positioning within the transportation industry has consistently relied on its careful allocation of resources and capabilities. Further exploration of the VRIO framework:
Expansion Effectiveness
The business's potential for growth, particularly its forays into rail transportation and business jets, demonstrates its capacity to capitalize on adjacent industries, developing new revenue streams. Tao (2023) highlighted that Bombardier strategically chose to sell its rail operations to Alstom to concentrate more on the expanding business jet market.
Access to Capital
Due to its established reputation and long history of industry leadership, Bombardier can secure low-cost financing (Reynolds, 2023). Although many of Bombardier's rivals have similar access, they have an edge due to their established relationships with financial institutions and government subsidies, especially from the Canadian government.
Brand Extensions
Due to the brand's widespread popularity, Bombardier can investigate potential new uses for the name. As per Vasigh and Azadian (2022), the development of the C-Series airplane, later purchased by Airbus and renamed the A220, demonstrated their capacity to enter markets dominated by industry giants like Boeing and Airbus.
Financial Resources
Bombardier's massive financial resources have been its bulwark against difficulties. As per Dion (2023), These resources allowed them to make significant R&D investments, which led to the development of ground-breaking products like the Global 7500, which revolutionized the business jet market.
Product Portfolio Synergy
Bombardier's extensive range of products, encompassing regional jets and luxury business aircraft, enables the company to serve a vast clientele effectively. The fact that they could launch planes like the CRJ series, aimed at regional markets, and plan...