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The Bombardier Aerospace Firms Business-Level Strategy
Introduction
Bombardier Aerospace was a successful aircraft development firm; it successfully competed with other manufacturers, concentrating on the production of local jet aircraft. In 2004, Bombardier Aerospace announced plans for a new C-Series aircraft. Three years later, the company has not decided on the new batch, which caused doubt among investors about the solvency of the company. Experts are skeptical that C-Series technology is no longer relevant, which is inconsistent with Bombardier Aerospaces claims of being able to adapt to changing technologies.
Current Business Strategy
Bombardier Aerospace is adapting its business strategy to the aviation services market situation. By the 1990s, it became clear that the price was the primary option passengers paid attention to when choosing air tickets. Bombardier had to consider the changed interest and move from comfort to lower prices. The profit of Bombardier from 2003 to 2007 has significantly declined; however, expenses were also reduced by almost 740 million. The Q-Series was developed to reduce costs. It allowed a 28% reduction in fuel consumption and an 83% cheapening in engine maintenance. The C-Series was also designed to reduce costs with greater capacity and easier maintenance. The desire to single out an aircraft of a certain series and attempts to improve it is part of the differentiation strategy. The business strategy is designed to improve production efficiency; however, Bombardier Aerospace delayed the development of a new aircraft for too long while giving confusing statements.
The Future of the C-Series Initiative
Pierre Beaudoin has to make an important decision about the need to end the C-Series initiative. The C-Series was valued at over $100 million by the end of 2007. However, the company has been making controversial statements for too long, which has left investors and competitors questioning its credibility. The company is facing tough new environmental regulations affecting its operations. Bombardier Aerospace is late in launching the initiative; despite the potential for high profits, the organization should terminate the initiative.
Innovative Approach
One of the main alternative ways is the development of a new generation of aircraft based on the experience of the C-Series project. The organization is too reliant on traditional technologies, which is contrary to its claims of technological advancement. Bombardier Aerospace can focus on the development of new medium-sized aircraft that will satisfy the needs of both the local and international markets. This alternative is advantageous because it is based on consumer interest in new comfortable solutions. Bombardier Aerospace can leverage previous work, which can reduce costs.
Reducing Dependency
Bombardier Aerospace is dependent on external factors that affect the organizations inability to make critical decisions. The company is technologically lagging behind competitors because investors do not consider the changing needs of the market. Bombardier needs to update its business strategy to keep pace with technological advances. Reducing external borrowing can be an advantageous alternative, providing Bombardier Aerospace with autonomy. This strategy is beneficial, allowing Bombardier to reclaim its reputation as a leader in the industry and convince the public of its independence. However, the companys financial position is too precarious to ensure the reduction of external borrowings.
Ecological Alternative
A modern manufacturing company must be environmentally friendly and contribute to finding solutions to reduce harmful ecological effects. Manufacturing aircraft using obsolete technologies is not a suitable strategy for meeting environmental regulations. Bombardier Aerospace can focus on new developments that provide a greener alternative to its existing line of aircraft. Although this way requires significant investment, the environmental approach will give Bombardier Aerospace a strong reputation. If the development is successful, Bombardier Aerospace could reclaim its position as an industry leader in environmental awareness.
Conclusion
Bombardier Aerospace is currently experiencing financial difficulties due to the inability of management to make critical decisions. The companys economic survival is at stake and the launch of the C-Series initiative risks falling short of expectations. Instead, the company is proposed to focus on the production of new aircraft based on previous developments but technologically advanced enough to provide a competitive advantage. Reducing borrowing and shifting to ecological manufacturing could help Bombardier Aerospace survive.
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