Running head: STRATEGIC ANALYSIS 1

Strategic Analysis- Bombardier Plc

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STRATEGIC ANALYSIS 2

Table of Contents

1. Introduction.................................................................................................................... 4

2. Measures of Success ...................................................................................................... 4

Financial Success ....................................................................................................................... 4

Non-Financial Success ............................................................................................................... 5

3.Reasons for Success ........................................................................................................ 6

3.1 Diversification of Revenue Streams and Enhanced Value Proposition .......................... 6

3.2 Customer Centric Approach .............................................................................................. 6

3.3 Supply Chain Efficacy ......................................................................................................... 7

3.4 Innovation and Transformation of Supply Chain Management ..................................... 7

3.5 Adaptation of Modern Technologies.................................................................................. 8

3.6 Dynamic Approach .............................................................................................................. 8

4. Strategic Analysis ........................................................................................................... 8

Adapted Value Chain ................................................................................................................ 8

VRIO/VRIN Analysis .............................................................................................................. 14

5. Strategic Focus and Leadership .................................................................................. 16

5.1 Strategic Focus ................................................................................................................... 16

5.2 Leadership .......................................................................................................................... 16

5.3 Dynamic Strategies and Innovative Capabilities ............................................................ 17

6. Strategic Recommendations ........................................................................................ 17

STRATEGIC ANALYSIS 3

References ........................................................................................................................ 19
STRATEGIC ANALYSIS 4

1. Introduction

Bombardier is a Canadian multi-national corporation which primarily manufacturers

business jets, commercial aircrafts and rail train sets. The company primarily follows an

exogenous strategy which prioritizes the evaluation and analysis of the external factors while

formulating and implementing its strategies. This particular report focuses on conducting an in-

depth strategic analysis of Bombardier and its strategies to gain a proper understanding about its

activity’s strategic competitiveness and the overall scenario of the organization. It further

provides recommendations based on which Bombardier would be able to maintain and enhance

its competitive advantage to overcome its existing problems.

2. Measures of Success

Financial Success

The financial success of Bombardier has been extensive over the years as it has been able

to gain a competitive advantage over its rivalling organisations. The company has been able to

gather a major chunk of the market share in the aviation and rail manufacturing industry which

has allowed it to achieve its financial objectives over the years and develop an extensive

financial reserve which the management has utilized to facilitate growth strategies and

expansions (BBC, 2015). The financial success of the company has been mostly facilitated due

to its ability to enhance its revenue through expansion and growth strategies incorporated with

methodologies such as large-scale expansion across varying global regions and through the

acquisition of new clientele. The company has been able to achieve more than 50% market share

in recent years in the global market of business jets. Hence, it can be evaluated that the financial

performance of the company has improved significantly in the last five years.

Figure 1: Bombardier Market Share USA

STRATEGIC ANALYSIS 5

(Source: Statista, 2019).

Non-Financial Success

Bombardier Plc has been able to garner non-financial success by focusing on aspects

such as sustainable development and prioritization of its human resource management strategies.

Data clearly depicts that the employee retention rate at Bombardier is fairly high which is clearly

indicative of the proper human resource management implementation by the organization

(Sarkis, Zhu & Lai, 2011). Furthermore, the company focuses on critical non-financial factors

such as sustainable development as it has become mandatory for aviation organizations to adapt

to green supply chain management practices due to the negative impact that the industry has had

on the environment over the years (Mocenco, 2015; Carter & Liane Easton, 2011).

Figure 2: Bombardier Number of Employees 2013-2017

STRATEGIC ANALYSIS 6

(Source: Statista, 2019).

3.Reasons for Success

3.1 Diversification of Revenue Streams and Enhanced Value Proposition

Bombardier has transformed its business operations in the last decade by diversifying its

business to produce various revenue streams. The company has also been focusing on

internationalization to penetrate the foreign markets, as USA market is highly saturated and the

scope of growth is limited. The company’s mission has been to prioritize its customers and

provide value to them by utilizing its available resources towards achievement of customer

satisfaction.

3.2 Customer Centric Approach

The customer base of Bombardier has been loyal and consists of numerous large-scale

clients. The company has been lauded over the years for its customer service. It has been

criticized in recent times for its traditional approach as the company has been slow to adapt to

modern business trends (CNN, 2019). The company has been suffering from limited scope for
STRATEGIC ANALYSIS 7

growth due to the growing competition from rivalling organizations. However, it has been able to

maintain its competitive advantage by catering to the demands and requirements of its existing

clientele which reflects the importance of a customer-centric strategy.

3.3 Supply Chain Efficacy

Bombardier has established a strong supply chain management (SCM) system as it has

been able to build positive relationship with suppliers and partners. The management of the

company is highly experienced and prioritizes the proper allocation of resources towards

achieving organizational objectives. The company has recently updated various aspects of its

SCM such as automated warehouse control initiatives, centralized ordering and distribution

system and electronic data change. In recent times, the largest competitive challenge for

Bombardier has been the emergence of competitors which it has been able to effectively mitigate

through the adaptation of a strategic approach to overcome its supply chain challenges.

3.4 Innovation and Transformation of Supply Chain Management

The needs and beliefs of the consumers have changed rapidly. The behavior of consumers

has been altered over the years, as individuals now seek value from the product/services they

purchase. According to changes in the consumer taste, preferences and behavior a number of

alterations have to be made in the aviation manufacturing supply chain management in order to

cater to the demands of the market. Aspects such as physical distribution and material

management have transformed into logistics management which is a major change in the supply

chain system for aviation product manufacturing companies (Fernie & Sparks, 2018).

Bombardier had been able to establish a stable and successful supply chain over the years.

However, drastic changes in the market trends and atmosphere has forced the company to make
STRATEGIC ANALYSIS 8

necessary changes in its supply chain due to which it has faced a number of challenges with

increased costs and lower efficiency.

3.5 Adaptation of Modern Technologies

The new system that had been implemented had certain technical flaws making it too

responsive to small demand changes, which significantly increased the implication effect in the

supply chain. The additional implications had an impact on the internal distribution network of

the company leading to confusions and ultimately loss of resources. The company had to

overcome the problems by examining the system and other aspects in the supply chain to achieve

the optimum refreshment policy (Potter & Disney, 2010).

3.6 Dynamic Approach

Considering the current situation and the operations for Bombardier it can be said that the

company has faced problems due to increasing competition and changing market trends.

However, the company has been largely successful in utilizing modern technologies combined

with management best practices to attain a competitive advantage over its rivals and ensure the

establishment of an organizational framework that is able to overcome challenges ensure it is

able to facilitate organizational growth.

4. Strategic Analysis

Adapted Value Chain

The adapted value chain clearly depicts the capabilities of the organization which has

been developed over the years through the integration of key value chain activities and ensure

the utilization of the best practices related to the value chain to provide high-value to the existing

customers by ensuring that a holistic approach is adapted which focuses on catering to the

requirements of the customers as well as the organization itself. The adapted value chain of
STRATEGIC ANALYSIS 9

Bombardier has proven to be highly important in its success and its evaluation through Porters

Value chain depicts its major strengths and weaknesses (Potter & Disney, 2010).

Primary Activities:

Inbound Logistics: Bombardier has been able to establish proper relationship with its

suppliers and has ensured that it is able to effectively optimize the utilization of its resources

which has allowed it achieve its goals and objectives. The proper allocation of resources towards

key activities has proven to be highly important in its success in recent years (CNN, 2019).

Operations: The operational efficacy of Bombardier has proven to be highly efficient

over the years. However, it is evident that there have been severe challenges in recent years to

internal conflicts which have proven to hinder the growth capabilities of the organization.

Despite challenges and large-scale obstacles Bombardier has been able to enhance its operational

efficacy to overcome challenges and ensure the stabilization in its operational activities through

proper operations management strategy implementation (Potter & Disney, 2010).

Outbound Logistics: The outbound logistics of Bombardier has presented a few

challenges due to the drastic transformation in the modern business environment which has

facilitated rapid changes in its operational environment. However, it can be evaluated that over

the years, the company has been highly successful in establishing a proper supply chain which

has allowed it to effectively achieve its objectives and ensure the proper distribution of its

products through the various channels allowing the organization to maintain stability in its

operations. Furthermore, the extensive availability of resources ensures that Bombardier is able

to establish the adequate infrastructure to facilitate the proper storage and utilization of available

goods and finished products which allows to gain a competitive advantage over its rivalling

organizations that have emerged as highly competitive in recent years such as Boeing and Airbus
STRATEGIC ANALYSIS 10

Marketing and Sales: The marketing and sales activities of Bombardier have

transformed significantly in recent years with the company prioritizing long-term objectives and

ensuring it is able to retain its existing customers while emphasizing on gathering the attention of

potential customers. However, it can be evaluated that the company has been rather lagging

behind other organizations in adapting to digital marketing strategies which has impacted its

ability to acquire new customers. Despite that it can be evaluated that Bombardier strategies in

terms of customer retention has proven to be highly effective as it has been able to establish a

loyal customer which has been considered as one of the major strengths of the organization over

the years (Potter & Disney, 2010).

Service: Bombardier, being in the manufacturing industry has prioritized the utilization

of its resources towards establishing high-quality service as consumers within the sector are

highly skeptical about high-quality service. In order to do so, the company has focused on

establishing proper customer-relationship management strategies (CNN, 2019).

Secondary Activities:

Procurement: The discussions above clearly depict that Bombardier has a highly

effective supply chain management and procurement strategy which allows it to acquire products

from key business partners and suppliers and ensures it distribution to the customers through

various distribution channels. The company prioritizes procurement of high-quality raw materials

and finished products from its business partners through a strategic method which ensures that

high-quality products are provided to its clientele (Potter & Disney, 2010).

Human Resource Management: The proper utilization of the human capital has been

considered as one of the major factors promoting organizational growth in the modern business

environment. In that context, it can be evaluated that Bombardier human resource management
STRATEGIC ANALYSIS 11

has been mostly successful as the company has a high employee retention rate as it offers

extensive growth opportunities to its employees (Potter & Disney, 2010). However, there have

been numerous issues and complaints that the organization has faced over the years depicting

that there is a clear scope of improvement in its HRM activities which would allow the

organization to further prioritize the proper usage of the available human capital.

Technological Development: Bombardier being a traditional brick and mortar

organization has been focusing on technological development within all the facets of the

organization as it has aimed to cope-up with the rapidly changing modern business environment.

Furthermore, it can be evaluated that the organization has been extensively improving its digital

marketing strategies and its online venture to benefit from the growth opportunities in the online

aviation manufacturing sector (Bediér, Vancauwenberghe & Van Sintern, 2018).Furthermore, it

can also be evaluated that the incorporation of technological advancements within its framework

has allowed the company to enhance the efficacy of its operations within the brick and mortar

stores of Bombardier as well. The utilization of technologies such as machine learning and

artificial intelligence has allowed Bombardier to focus on long-term growth by understanding the

behavior of the customers through the prediction of the probable changes in consumer trends,

behaviors and preferences (Potter & Disney, 2010).

Infrastructure: Bombardier being one of the largest aviation product manufacturing

globally has a wide array of resources at its disposal which has allowed it to establish a proper

infrastructure for its key functional departments (Szymczak & Walker, 2013).The well-

established infrastructure allows the workforce of the organization to function effectively

towards achieving its objectives and goals in the long-term. Apart from that, it can also be

evaluated that the growing advent of practices such as sustainable development and
 STRATEGIC ANALYSIS 12

environmentally friendly practices can be implemented effectively by utilizing the infrastructural

capabilities of Bombardier. Hence, it can be evaluated that the infrastructural capabilities of

Bombardier is highly well-established which has allowed the organization to strengthen its key

functional departments such as marketing, operations, finances and human resources which is

pivotal in gaining a competitive advantage within the modern business environment which can

be termed as highly challenging (CNN, 2019).

Table 1: Adapted Value Chain

Primary Inbound Logistics Operations Outbound Logistics Marketing and Service

Activities  Proper  High  Supply Chain Sales  Improved

Relationship operational innovation and  Interacti Customer

with efficacy creativity. ve Service

Suppliers  Strategic  Adaptation of marketin  Enhanced

 Internal method to transformational g. After Sales

Efficacy overcome supply chain  Custome Services.

operational activities. r centric

challenges approach

to attract

new

customer

s and

retain

existing
 STRATEGIC ANALYSIS 13

customer

s.

Secondary Procurement Human Resource Technological Infrastructure

Activities  Acquiring Management Development

products  Proper development of

through  Employee  Adaptation of manufacturing infrastructure

suppliers centric modern to ensure the development of

and approach technologies to high-quality products.

business enhance  Frequent upgradation to

partners.  Proper efficacy of ensure the maintenance of

 Ensuring utilization operations. quality.

acquisition of human  Implementation

of high- capital of Artificial

quality raw Intelligence and

materials. Machine

Learning.
STRATEGIC ANALYSIS 14

VRIO/VRIN Analysis

The VRIO analysis allows the business to adopt a systematic approach towards

understanding critical aspects related to its resources which is important in developing an

accurate understanding of the internal capabilities of the organization to grow and achieve its

objectives.

Valuable: One of the most valuable resources for Bombardier is the experience of its

management and workforce which allows it to overcome organizational obstacles that may have

a negative impact on the functionality of the operations (Haddock-Millar and Rigby, 2015;

Bridoux and Stoelhorst, 2014). It is evident that businesses, over the years, have emerged as

highly competitive, but the vast exploit of resources that Bombardier possesses has allowed it to

maintain its competitive advantage over its rival organizations which concludes that the current

resources of Bombardier are valuable and contribute towards its growth (Vértesy, 2017; Haslam

et, al., 2014; Yoruk and Radosevic, 2010; Ojo, 2018).

Rare: As it has been discussed extensively in the sections above, Bombardier has the

adequate expertise which has allowed it to overcome challenges posed by the external

environment. Apart from that, the improvement in technological portfolio and IT integration

have proven to be major strengths for Bombardier and has reflected the resources that it

possesses are highly rare and difficult for any other company within the sector to achieve

(Brannen, Moore and Mughan, 2013).

STRATEGIC ANALYSIS 15

Imitable: The resources and the human capital possessed by Bombardier have been

amassed over an extended period of time primarily due to the fact that the history of the

company is dated back to more than a century, which reflects that it has been able to adapt and

overcome numerous challenges such as recessions and other external, internal environmental

challenges. In that context, it is important to evaluate that it would be highly difficult to adapt to

the changes (Brannen,Moore and Mughan, 2013).

Organization: The organizational aspect depicts that Bombardier’ capabilities and core

competencies are extensively developed which represents the fact that despite the numerous

environmental and internal challenges that have been discussed in the sections above, it would

have the capability to prioritize the utilization of its resources to overcome existing challenges

(Brannen, Moore and Mughan, 2013; (Fernie and Sparks, 2018).

Table 2: VRIN Analysis

VRIO/VRIN Analysis

Valuable Rare Imitable Organization

Highly experienced Vast availability of Supply chain efficacy Internal strengths such

management and an resources and a and availability of as extensive core

efficient workforce stakeholder centric resources and its competencies allow

adds significant value approach makes the product portfolio is the organization to

to the organisation organisation highly rather unique making have a competitive

making it one of the rare and very difficult it extremely difficult advantage over its

most valuable entities to replicate. to imitate. rivals within the

in the aviation industry.

STRATEGIC ANALYSIS 16

manufacturing

industry.

5. Strategic Focus and Leadership

5.1 Strategic Focus

One of the major strengths that have led to Bombardier strategic success is its ability to

maintain the approach which puts customers first. Bombardier has always strategized and

formulated its plans to make customer its priority. Offering high-quality customer service even in

international markets has proven to facilitate growth for Bombardier not only the USA but in

countries such as the UK. Bombardier has established strong goodwill over the years due to good

service and ethical mode of operations (Van Burg, Berends & Van Raaij, 2014; Fuentes, 2011).

Bombardier also has a wide range of assets which supports it during times of financial turmoil.

Under the current circumstances the strategic focus of Bombardier Plc has been to expand its

business operations in order to sustain its market leadership by prioritizing large-scale customer

acquisitions while also focusing on enhancement of profitability by focusing on strategies such

as lean management. Apart from that the management has been determined towards achieving

sustainable development objectives in order to comply with sustainability standards and green

supply chain management capabilities laid down by the USA government (Dias, Teles & Duzert,

2018; Green et al., 2012).

5.2 Leadership

The leadership capabilities of Bombardier have been one of the major strengths of the

organisation. In recent years, the CEO has practiced situational leadership which has aimed to

prioritize its strengths by focusing on the holistic development of the company and its
STRATEGIC ANALYSIS 17

employees, key stakeholders involved such as the customers, suppliers, business partners etc

(Pritchard, 2016). The leadership of Bombardier has allowed the organisation to garner the

ability to optimize key resources and ensure the development of an organisational culture that is

suitable for large-scale growth. Furthermore, the ability of the leader to create a stable

organisation that is able to overcome the challenges in the modern business environment clearly

reflects that the role of the leadership in facilitating organisational growth has been pivotal

(Olienyk & Carbaugh, 2011).

5.3 Dynamic Strategies and Innovative Capabilities

One of the major strengths of Bombardier apart from its operational strategies and able

leadership has been the organisations ability to adapt a dynamic approach to its strategic

implementation which allows it to cope-up with the challenges presented by the modern business

environment (Rezaei Somarin et al., 2018). Furthermore, the innovative capabilities of the

company have ensured that the company is able continuously maintain its consistency in terms of

quality (Leblond, 2019).

6. Strategic Recommendations

The above discussions have made it clear that Bombardier possesses the adequate

resources and core competencies to emerge as the market leader in the business jet and

commercial aircraft manufacturing segment. Apart from that, its management has adequate

expertise to overcome the existing challenges and obstacles as it has done over the last few years.

However, the current external environment situation within the USA and Europe is highly

challenging and furthermore, the internal issues within the company are a major factor as it has

prohibited it from achieving its organizational objectives in the past, as the organization has

faced severe losses in the last few years which lead to the loss of stakeholder’s confidence
STRATEGIC ANALYSIS 18

specifically among the employees and investors. Under the current circumstances, it would be

critically important for the company to ensure that it adopts a systematic and strategic approach

towards overcoming the internal challenges which would ensure that it is able to effectively

formulate strategies that focus on fulfilling the objectives of the key stakeholders, as it is evident

that the stakeholder theory results in a situation where the company is able to achieve extensive

growth.

Bombardier must also aim to focus on adequately allocating its resources and core

competencies towards expansion strategies which would ensure that it is able to benefit from

them. Considering the limited scope for growth in the USA and European market which is highly

saturated, it would be critical for Bombardier to focus on international expansion to ensure it is

able to take advantage of the extensive opportunities in the developing countries in Asia and

Africa. However, evaluating the current international expansion failures of Bombardier, it would

be necessary for the company to focus on overcoming the challenges such as lack of market

penetration and ensuring it is able to venture effectively with local organizations which would

allow it to understand the customer preferences and demands in that particular country Lastly, it

would be extremely important for Bombardier to ensure that it is able to comply with the ethical

and regulatory guidelines of the respective country within which it operates, as the company has

faced issues due to the aforementioned factors in the last decade in countries such as the USA.

Hence, it can be concluded that the adaptation of a strategic approach which aims to mitigate the

existing challenges and benefit from the prevalent opportunities. Based on the SAFe framework

Bombardier must focus on adapting a lean approach to effectively benefit from the core

competencies of the organisation which focuses on retention of its existing customers and

ensuring it is able to establish a new customer base by acquiring new consumers within the
STRATEGIC ANALYSIS 19

aviation and rail industry. Furthermore, the company must adapt a systematic approach towards

overcoming its external challenges by prioritizing the proper utilization of its internal strengths.

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