Running Head: BOMBARDIER INC.

STRATEGY ANALYSIS

04-75-100 Introduction To Business Section 30

Bombardier Inc.
Strategy Analysis
Presented On: Date

Presented To: Proposer Name

Presented By: Group Number
Name Student#
Name Student#
University of Windsor

BOMBARDIER INC. STRATEGY ANALYSIS

EXECUTIVE SUMMARY
Bombardier Inc. is the worlds largest passenger train maker and the third largest civil aircraft
manufacturer (Bombardier Inc., 2012). The company is headquartered in Quebec, Canada, and
employs approximately 62,900 people in operations in more than 60 countries around the world
(Datamonitor, 2010, p.96). Over the years, Bombardier has built a reputation for being an
industry leader, innovator and trend setter.
Increased global competition coupled with economic uncertainty and changing consumer needs,
is forcing Bombardier to rethink its strategies, in order to be able to effectively compete in the
competitive global market.
The aim of this report is to provide Bombardier Inc. with the guidance and direction it needs to
achieve its mission of being the world's leading manufacturer of planes and trains (Bombardier
Inc., 2012). This report will outline business and corporate level strategies for Bombardier to
adopt in order to deliver on its promise of evolution of mobility, sustain a competitive advantage,
differentiate itself from its competitors, and drive future growth.
This report includes detailed information on Bombardiers history, its current competitive
situation analysis and business environment projection in order to provide the company with a
thorough understanding of its current position and to aid in achieving its goals and mission.

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TABLE OF CONTENTS

1. INTRODUCTION

2. COMPANY HISTORY AND DESCRIPTION

3. CURRENT COMPETITIVE SITUATION ANALYSIS

3.1 Industry Analysis

3.2 Competitor Analysis

3.3 Business Level Strategy

3.4 Corporate Level Strategy

3.5 Competitive Position

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4. FORWARD 5 YEAR BUSINESS ENVIRONMENT PROJECTION

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4.1 Legal and Regulatory Factors

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4.2 Economic Factors

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4.3 Technological Factors

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4.4 Competitive Factors

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4.5 Social Factors

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4.6 Global Factors

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5. PROPOSED STRATEGIC ADAPTATIONS

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5.1 Business Level Strategies

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5.2 Corporate Level Strategies

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6. STRATEGIC MODELS

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6.1 SWOT Analysis

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7. STRATEGIC DISCUSSION

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8. CONCLUSION

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9. APPENDICES

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9.1 Appendix A Group Contract

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9.2 Appendix B Reflexive Assessment of Group Processes

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9.3 Appendix C Tables & Figures

10. REFERENCE LIST

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1. INTRODUCTION
The purpose of this report is to critically analyze the strategy of a publicly listed Canadian
Corporation. Bombardier Inc. will be evaluated and its strategies analyzed. The aim will then be
to recommend business and corporate level strategy changes for Bombardier Inc. to adopt in
order to maintain its industry-leading positions now as well as in the future.
2. COMPANY HISTORY AND DESCRIPTION
Bombardier Inc. began as a family business, established in 1942 by Joseph-Armand Bombardier,
an inventor who built and sold the first snowmobiles. In 1959 the company produced the first
Ski-Doos, and by 1974 it was producing underground rail cars for Montreal. The company then
entered the aerospace industry through its purchase of Canadair in 1986, shortly followed by its
purchase of Lear Jet and Irelands Short Brothers, and its acquisition of de Havilland. By 1988
Bombardier began producing Sea-Doos and bought out water-engine manufacturers Johnson and
Evinrude (Canadian Broadcasting Corporation [CBC], 2003, p.48). Bombardier now competes in
the aerospace and rail transportation industries, manufacturing business and commercial aircraft
transportation equipment, rail transportation equipment and systems, and related services through
its two subsidiaries Bombardier Aerospace (BA) and Bombardier Transportation (BT). The
company is headquartered in Quebec, Canada, and has operations in more than 60 countries in
five continents, employing approximately 62,900 people (Datamonitor, 2010, p.96).
Its first subsidiary Bombardier Aerospace is involved in designing and manufacturing aviation
products, including business jets, commercial jets and amphibious aircrafts for companies, high
net worth individuals, airlines and leasing companies. It has 10 manufacturing and engineering

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sites and is present in 22 countries across the world. BA also offers maintenance service centers,
authorized service facilities, and distribution centers as well as a range of aircraft services such
as parts logistics, aircraft maintenance, and training solutions to name a few (Datamonitor, 2010,
p.96). Its second subsidiary Bombardier Transportation is involved in the manufacturing of rail
equipment and systems, such as passenger railcars, locomotives, light rail vehicles, automated
people movers, bogies, electric propulsion, control equipment and maintenance services (Railtex,
2009). BT operates through 58 production and engineering sites and 40 service centers in 23
countries around the world (Datamonitor, 2010, p.97).
Bombardier like many other large multinational firms did fall prey to the recent downturn in the
world economy. As a result of the decline in demand for new aircraft Bombardier was faced with
declining sales and rising debt. This put Bombardier in a tough position and even forced the
company to lay off 3000 employees (CBC, 2003, p.51). Fortunately, Bombardier was able to
bounce back from the negative effects of the recession, due to the increased demand for business
travel and for business aircraft from globalization (Bombardier, Inc., 2011, p.26).
Through its 4 core values of: integrity, commitment to excellence, customer orientation and
shareholder focus (Bombardier Inc., 2012), Bombardier aims to fulfill its mission to be the
world's leading manufacturer of planes and trains (Bombardier Inc., 2012). Currently,
Bombardier is the worlds No.1 passenger train maker and No.3 civil aircraft manufacturer
(Nickels, J. McHugh, S. McHugh, Cossa, Sproule, 2010, p.292). It recorded revenues of $19,366
million for the financial year ended January 2010 (Datamonitor, 2010, p.96).

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3. CURRENT COMPETITIVE SITUATION ANALYSIS

3.1 INDUSTRY ANALYSIS
Over the past few years, the Aerospace Industry has dealt with significant challenges as a result
of the recession and high oil prices, leading to a reduction in the demand and confidence of
customers to renew and expand their fleets. Although economic uncertainty around the world
reduced the demand for business aircraft, globalization is increasing the demand for business
aircraft and travel that will enable individuals and corporations to reach more destinations
efficiently. The global aerospace industry has thus been growing steadily since 2006, due to
increasing demand from emerging countries and is expected to do so in the future (Bombardier,
Inc., 2011, p.26). A (2010) Datamonitor report found the following:
Total revenues for the global aerospace market in 2009 were $743.9 billion, with a
compound annual growth rate of 4.9% for the 2005-2009 period. The civilian aerospace
market generated revenues of $210.8 billion in 2009, equating to 28.3% of the markets
aggregate revenues. (p. 7)
In contrast to the aerospace industry, the rail industry has remained resilient even in uncertain
economic times. Over the past five years, the rail industry has continued to grow as a result of
increased government investment in anticipation of longer term increases in rail demand
(Bombardier, Inc., 2011, p.106). The worldwide rail market continued to have high levels of
activity, reaching $96.9 billion on average over the years 2009 to 2011, higher than the previous
average of $94.6 billion for years 2008 to 2010 (Bombardier, Inc., 2011, p.106). This shows that

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rail industry is less subject to short-term instability than other industries, and even though
economic uncertainty remains a threat, Bombardiers focused strategy has enabled it to continue
winning orders (Bombardier, Inc., 2011, p.106).
3.2 COMPETITOR ANALYSIS
Bombardier operates as a leader in the global rail and aerospace industries, and according to
Hoovers Company Records (2012) its main competitors are ALSTOM, Boeing, and Siemens
AG. Other competitors include Airbus and Embraer. Many of Bombardiers competitors are
partially owned by the government and/or receive subsidies. Bombardier also receives subsidies
and financial aid from the Canadian government, however, not to the extent of some of its
competitors. This distorts the market and can make it harder for Bombardier to compete.
ALSTOM is one of Bombardiers major competitors and also a world-leader when it comes to
the manufacturing of commuter trains, locomotives, signaling equipment and rail infrastructure,
high-speed trains and provision of complete turnkey railroad setup (Hoovers, 2012). It has built
up a strong brand name in the rail transportation industry from its ability to manufacture very
high speed trains, and its technological advances allowed the company to achieve the world rail
speed record at a speed of 574.8 km/h on 3 April 2007 (ALSTOM, 2012). ALSTOM operates in
100 countries around the world, but is increasing its focus from the developed world to emerging
economies. Customers in emerging countries accounted for a 25% increase in orders, which
brought the global total from 35% in 2010 to 60% in 2011. Orders from customers in Brazil,
Russia, India, and China increased from 10% of the global total in 2010 to 25% in 2011.
ALSTOM also experienced a 6% increase in sales in 2011, after 2 years of decline in revenue in

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2009 and 2010. Moreover, orders increased by 28% in 2011, whilst net income, on the other
hand, was down 62% in 2011 compared to 2010 (Hoovers, 2012).
Boeing, another major competitor of Bombardier, is the largest aerospace company in the world
(Boeing, 2012). It is the second largest maker of large commercial jets after Airbus and the
second largest defense contractor following Lockheed Martin. Boeings businesses include
Commercial Airplanes, Boeing Defense, Space & Security and Boeing Capital Corporation. Its
Defense, Space and Security business consists of global services & support network, military
aircraft, and space systems. Its capital business provides financing and leasing services to both
military/aerospace and commercial customers. A large portion (60%) of Boeings sales are
generated in the Americas, with the US Department of Defense generating about 80% of the
revenues for its Defense, Space & Security unit. Other major customers of Boeing include
NASA, international defense agencies, and satellite markets (Hoovers, 2012).
Siemens AG is also a major competitor of Bombardier. It is one of the largest electronics and
industrial engineering companies in the world, and runs 750 subsidiaries and associated
companies in over 1,600 locations around the world. The company manufactures diagnostic and
imaging systems for clinics and hospitals; automation equipment and building technologies for
manufacturers and construction companies, and also produces power generation and distribution
equipment for the oil and gas and renewable energy sectors. Its largest subsidiaries are Siemens
Energy, Siemens Healthcare, and Siemens Industry. The company develops new technology at
more than 175 research and development facilities around the world, and has corporate
technology departments in Germany, the US, China, and India. While Siemens operations are
diverse, its long-term strategy focuses on developing and producing products that are in global

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demand. That is, addressing climate, environmental, and energy concerns, and facilitating
population growth in mature and emerging urban markets through its product and service
offerings (Hoovers, 2012).
3.3 BUSINESS LEVEL STRATEGY
Bombardier Aerospace designs, manufactures and supports innovative aviation products for the
commercial, business, amphibious and specialized aircraft markets. BA has the most
comprehensive aircraft portfolio and holds a first place ranking in business and regional aircraft.
Its high-performance aircraft and services set the standard of excellence in global markets
(Bombardier, Inc., 2011, p.23). As industry forecasts have predicted sustained growth in the
business and commercial aircraft markets, BA employs a differentiation strategy to sustain its
competitive advantage over its competitors. BA has a reputation for being an innovator, trend
setter and for setting industry benchmarks, as it is continuously improving and evolving its
products. Its strategy focuses on developing industry-leading products, achieving flawless
execution, and expanding its international presence in order to meet its customers needs and
further strengthen its leadership position (Bombardier, Inc., 2011, p.3).
To elaborate, Bombardier has developed industry leading products such as the innovative CSeries single-aisle commercial aircraft which offers superior field performance, best-in-class
operating economics, and is environmentally friendly. Also, Bombardiers Learjet 85 business jet
can fly faster and farther than any Learjet aircraft ever built, whilst Bombardiers Global 8000
business jet can fly farther than any other business jet (Bombardier, Inc., 2011, p.26).

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Further, BAs dedication to achieve flawless execution is achieved through various programs and
controls. These include Bombardiers Aircraft Portfolio Strategy Board which thoroughly
assesses all new programs and its Product Development Cycle which involves thoroughly
inspecting the product development process, enabling BA to identify and reduce potential risks
quickly and efficiently. (Bombardier, Inc., 2011, p.27).
Also, BA has expanded its presence globally to further its production footprint and improve
supply chain efficiency, by building a manufacturing site in Mexico that produces lower cost and
high-quality components. The company also plans to grow further by building a manufacturing
facility in Morocco (Bombardier, Inc., 2011, p.28). By leveraging its extensive portfolio and
continuously improving its products and operations, Bombardier Aerospace continues to remain
profitable through these tough economic times (Bombardier, Inc., 2011, p.26).
Bombardier Transportation employs both a low cost and differentiation strategy to sustain a
competitive advantage over its competitors. Its strategy focuses on developing innovative and
cost-optimized products and solutions, enabling development of more integrated transportation
networks, building local capabilities and long-term partnerships, and delivering flawlessly on its
promises. BT is able to differentiate itself from competitors by making trains that are more
efficient, faster, quieter and more comfortable (Bombardier, Inc., 2011, p.44).
Moreover, BT is expanding its presence and building long-term partnerships in emerging markets
by localizing production, establishing operations and maintenance presence and investing in
public & private partnerships. For example, for Metro de So Paulo in Brazil, BT used its local
presence to restore a fleet of metro vehicles, extending the vehicle life by 20 years and reducing

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maintenance costs, improving reliability and availability for passengers (Bombardier, Inc., 2011,
p.45).
Further, BT also introduced an initiative on quality in 2011, with two core elements. The first
element involves advanced quality planning throughout all phases of project management. The
second element is an effective process of problem identification, problem solving and prevention
and process improvement. This initiative allows BT to successfully differentiate itself by
producing world-class goods and delivering flawlessly on its promises (Bombardier, Inc., 2011,
p.45).
In addition, Bombardier Transports low cost strategy involves developing low cost products to
meet the needs of its customers. In particular, the company has developed the Rgio2N regional
train to allow customers with budget constraints to upgrade their infrastructure at a lower cost
(Bombardier, Inc., 2011, p.44).
3.4 CORPORATE LEVEL STRATEGY
Bombardier is a global transportation company with 76 production and engineering sites and a
vast network of service centres in 25 countries around the world. It operates two industry-leading
businesses through Bombardier Aerospace and Bombardier Transportation. Bombardiers 70,000
employees design, manufacture, sell and support a wide array of world-class products in these
two sectors, including commercial and business jets, and rail transportation equipment, systems
and services (Bombardier Inc., 2012). Bombardier is committed to its promise of the Evolution
of Mobility (Bombardier, Inc., 2011, p.10). Bombardier is utilizing three interrelated horizontal
growth strategies (Invest in leading mobility solutions, grow local roots in emerging markets,

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and achieve flawless execution at every stage) supported by four competitive capabilities (great
talent, financial discipline, active risk management, commitment to corporate social
responsibility) in order to deliver on its promise, sustain a competitive advantage, differentiate
itself from its competitors, and drive future growth (Bombardier, Inc., 2011, p.3)
First, Bombardier is investing in mobility solutions (such as the very high speed ZEFIRO train,
and the CSeries commercial aircraft) that are trend setting, technologically innovative and will
broaden its geographic reach to ensure the companys long-term success (Bombardier, Inc., 2011,
p.1).
Second, Bombardier is aiming to build local capabilities and sound partnerships in emerging
economies, in order to sustain growth. That is, Bombardier aims to expand internationally given
the recent growth in emerging markets. For Bombardier to capture opportunities, generate cost
advantages and strengthen its global leadership and competitiveness, building a strong local
presence in the worlds rising economies is crucial. International expansion will allow
Bombardier to increase its scale, expertise, technologies and products to meet the substantial
transportation needs of billions of people in emerging markets (Bombardier, Inc., 2011, p.6).
And finally, to build value and grow even further, Bombardier is aiming to achieve flawless
execution in its new product programs and delivery of its substantial backlog. The company
pursues customer-focused excellence and applies lean manufacturing principles throughout a
products entire lifecycle. This enables flawless delivery of products and services, drives
Bombardiers leadership and paves the way to growth (Bombardier, Inc., 2011, p.8).

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Thus, Bombardiers corporate level strategies are embedded in its competitive foundation of
great talent globally, active risk management, committed corporate social responsibility, and
strong financial discipline (Bombardier, Inc., 2011, p.3).
3.5 COMPETITIVE POSITION
Positioning is the image or perception that customers have of a particular brand or company,
relative to their perceptions of others in the same category (Rohanek, 2006). Bombardier
competes in the global market as a leader in both the aerospace and rail transportation industries.
It utilizes a variety of positioning strategies in order to sustain its leadership position in the
market. By positioning in relation to its competition, Bombardier aims to continuously innovate
its products to beat the offerings of its competitors. By positioning in relation to its customers,
Bombardier is able to meet the changing transportation needs of its customers before any other
competitor by engineering innovative and sustainable solutions to todays mobility challenges. It
is Bombardiers leadership position and perception of innovativeness that led to the company
generating revenues of $18.3 billion US in the fiscal year ended December 31, 2011 (Bombardier
Inc., 2012).
4. FORWARD 5 YEAR BUSINESS ENVIRONMENT PROJECTION
4.1 LEGAL AND REGULATORY FACTORS
Within the aerospace industry, the role of government is becoming increasingly important. A
2009 study by aerospace consultant, AeroStrategy LLC (titled The Strategic and Economic
Impact of the Canadian Aerospace Industry), suggests that a developing trend globally is the
growing cooperation between aerospace companies and foreign governments to create high value

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aerospace clusters within their respective countries i.e. the Mexican governments investment in
a National Public Aero Trade School. For the Canadian aerospace industry, this means that global
competition will continue to increase. When compared to other countries, many aerospace
companies in Canada do not believe that the Canadian government provides sufficient funding to
the sector. These companies believed that with increased government funding, we would see
creation of a greater number of jobs within the industry.
Within the rail transit industry, many European and Asian countries have embraced effective
policies and invested heavily in their rail and transit sectors (Refer to Figure 1 in Appendix C).
Similar to the aerospace industry, in North America there is also belief that more federal funding
is required from government to provide maintenance to bring existing systems up to date as well
as to expand systems to keep up with increasing passengers.
Environmental regulations and related issues to fight climate change are also heavily impacting
both the aerospace and rail transit industries. Many companies are being pressured to become
more environmentally responsible in the future. Many companies believe this increased pressure
will lead to rising operational costs in the future.
4.2 ECONOMIC FACTORS
The success of the Canadian aerospace industry is directly related to that of the airline industry.
The International Air Transportation Association (IATA) reports that international air passenger
and cargo traffic is now approaching pre-recession levels, and that 2010 will be a year of positive
growth for the air traffic during the recovery. (Deloitte & Touche LLP and affiliated entities,
2010). According to an article by Marketwire (2009):

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The worldwide business jet fleet included approximately 13600 aircraft at the end of
2008. It is expected to grow by a compound annual growth rate of approximately 5.8%
over the forecast period to some 23,800 units after aircraft retirements. In the same
period, the Bombardier business aircraft market forecast predicts that business jet
manufactures will deliver a total of 11500 aircraft with revenues of $256 billion US for
the industry.
The Canadian aerospace industry has a large impact on the Canadian economy. The study by
Aerospace LLC (2009) also found the following:
In general, for each additional C$ 100 Million of output generated by the Canadian
aerospace industry, the output in the rest of the Canadian economy (indirect impact)
would be expected to increase by approximately C$45.6 million. Employment would be
expected to increase by some 355 direct jobs in Canada and indirectly employment would
increase by 675 jobs across the country.
Global demand for passenger and freight rail equipment, infrastructure, and related services in
2007 was $169 billion and projected to grow to $214 billion by 2016 (Renner, M., & Gardner,
G., 2010). The market is dominated by Western Europe, followed by Asia and the Pacific.
Globally, subways and light rail systems are expanding and investment is being made in intercity
high speed rail lines (HSR). In the long term, air and rail transportation profitability will be
driven by growth in emerging markets.
4.3 TECHNOLOGICAL FACTORS

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Global aircraft is aging and manufacturing for the aerospace industry will move towards
replacing old fleet particularly in America and Europe. Technological trends indicate that next
generation aircraft will be built with fuel efficiency in mind as well as technologies that produce
fewer emissions and operate more quietly. Research and development investment is expected to
increase amongst major manufacturers with these key trends in mind. According to Bombardier,
by 2020 noise levels and aircraft nitrous oxide emissions will be reduced by 50% and 80%
respectively. Further predictions by third parties confirm that there is a long term trend in aircraft
design towards a greener and more environmentally friendly aircraft (Deloitte & Touche LLP and
affiliated entities, 2010).
In the rail industry, technology is centered around the movement towards the expansion of high
speed intercity rail lines (HSR). Renner & Gardner (2010) state:
In 2009 HSR lines totaling some 6650 miles were operational including close to 1490
miles in Japan. In China alone, an extensive HSR system is under construction whose
total length will be 15000 miles long. In 2009, the number of HSR trainsets in operation
worldwide consisted of 2200. By 2015, it is estimated that the number of trainsets in
operation worldwide is expected to rise by 70 percent, up to 3725.
4.4 COMPETITIVE FACTORS
Established aerospace markets will continue to develop their aerospace industries through greater
research and development but will face strong competition from emerging markets such as China
which are aggressively developing their industries. China specifically has created a competitive

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domestic aircraft manufacturer (government owned) Commercial Aircraft Corporation of China

Ltd. (COMAC) to reduce the countrys dependency on Boeing and Airbus.
In the rail industry, Bombardier, ALSTROM, and Siemens have been the leading international
manufacturers of rail and transit vehicles but similar to the aerospace industry, they are facing
competition from China and emerging markets that are developing a domestic industry. Further
challenges face the traditional players due to stiff local-content rules in emerging countries
(China) which stipulate that 70-90 per cent of rail equipment must be manufactured domestically
(Renner, M., & Gardner, G., 2010).
4.5 SOCIAL FACTORS
A major focus with many aerospace and rail transit equipment companies today is building
toward environmentally sustainable or greener technologies to address the growing issue of
climate change. There is also a shift towards alternative forms of travel mainly due to high
gasoline prices, traffic congestion, and greenhouse gas emissions. Public transportation including
urban rail and high speed rail offer a range of benefits over private automobile travel. There is
increasing interest in North America to further develop these forms of public transportation
(Renner, M., & Gardner, G., 2010).
4.6 GLOBAL FACTORS
For the aerospace industry, the fastest emerging markets are forecasted to be China, India, and
the Middle East. This can be explained by the large expansion of business activities in these
emerging markets combined with strong economic growth as well as a rise in disposable income
that will increase domestic and international air travel (Deloitte & Touche LLP and affiliated

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entities, 2010). These emerging markets mark an opportunity for the Canadian Aerospace
industry. Although there are efforts to build these industries domestically in areas such as China,
domestic demand in the short term may use up all domestic supply leaving a net opportunity for
Canadian companies to prosper in these markets (Deloitte & Touche LLP and affiliated entities,
2010).
Rail passenger transit is on the rise in emerging markets as well as in developed countries
seeking alternatives to primary automobile transport. With many new systems under construction
or in the planning stages, orders for rail vehicles and equipment are projected to show strong
growth in the near future and these orders will translate into employment growth. The regions
with the fastest growth are Asia and the Pacific (Renner, M., & Gardner, G., 2010).
5. PROPOSED STRATEGIC ADAPTATIONS
5.1 BUSINESS LEVEL STRATEGIES
Based on the current competitive situation analysis, future business environment projection and
SWOT Analysis conducted, Bombardier Aerospace and Bombardier Transportation must adopt
the following business level strategies in order to successfully compete in the future and maintain
its competitive advantage over its competitors.
Both Bombardier Aerospace and Bombardier Transportation must utilize a differentiation
strategy in order to continue being one of the leading aircraft and rail transportation
manufacturers in the world, and to be able to compete with the low cost offerings of Chinese
transportation manufacturers and other competitors like Embraer who receive government
subsidies.

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In addition, BA and BT must focus on continuously providing their customers with high quality,
innovative, and technologically advanced products and services, as well as a high level of
customer service. BA and BT should also promote their unique selling point of being the only
manufacturer of planes and trains in the world.
In particular, BA should increase production of its individual and corporate business jets as
globalization and increased trade amongst nations is expanding the need for individuals and
corporations to move from one location to another quickly and safely. In particular Bombardier
should focus on expanding into emerging markets (Brazil, Russia, India and China), who signify
great growth opportunities and have substantial transportation needs to be met.
Moreover, China, India and Latin Americas need for rail transportation and infrastructure
represents a great opportunity for BT to take advantage of. In particular, China is looking to
connect its many large cities and BT can do this by providing the country with its leading
regional trains (Bombardier, Inc., 2011, p.17).
BT can also use a low cost strategy to target customers in Europe who have aging fleets, but lack
the financial strength to update their entire fleet. BT should target its Rgio2N regional trains to
the European market which are more affordable than other BT trains, but will still give European
customers the benefits of upgrading such as the latest technology and a more energy efficient
fleet.
If Bombardier Aerospace and Bombardier Transportation are able to successfully differentiate
themselves, then this could lead to increased customer loyalty as customers may become strongly
attached to their unique features.

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5.2 CORPORATE LEVEL STRATEGIES

Based on the current competitive situation analysis, future business environment projection and
SWOT Analysis conducted, Bombardier Inc. must adopt the following corporate level strategies
in order to grow the company further whilst maintaining its leading positions in the aerospace
and rail transportation industries, and achieve its mission of being the world's leading
manufacturer of planes and trains (Bombardier Inc., 2012).
Firstly, Bombardier must employ a diversification strategy, that is promote its new products in
new markets as well as market development strategies such as promoting current products in new
markets. As a result of globalization, people are increasingly requiring transportation that enables
them to move from one location to another quickly and efficiently. In particular, emerging
markets such as Brazil, Russia, India and China are experiencing rapid growths in their
economies as well as in their populations. These countries have growing transportation needs
that presents as an opportunity for Bombardier. These strategies will enable Bombardier to
capture global growth opportunities and market share by expanding its global reach and
satisfying the existing demand for efficient transportation in emerging markets.
Moreover, to maintain its reputation for being an innovate company, Bombardier must constantly
invest in research and development. That is, Bombardier must continually evolve its products to
ensure that its products are up to date with the latest technology, efficiency and safety standards.
This will enable Bombardier to maintain its reputation and stay ahead of the competition.
To elaborate further, Bombardier must ensure that it products and services meet the needs of its
customers. For this to happen, Bombardier must continually monitor the business environment

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and ask for feedback from its customers in order to be able to satisfy their needs. For instance,
high fuel prices and increasing concern over global warming is leading to customers requiring
fuel efficient and environmentally friendly products. Thus, Bombardier must be prepared to
deliver fuel efficient and environmentally friendly products that are suitable to its customers
needs otherwise risk losing its customers to its competitors.
6. STRATEGIC MODELS
6.1 SWOT ANALYSIS
STRENGTHS

WEAKNESSES

Worlds No.1 passenger train maker

Diverse aircraft and rail transportation

(Reuters, 2008)
Worlds No.3 civil aircraft manufacturer
Serves customers in over 100 countries
Positive brand image
Innovative, safe, and reliable products
Diverse business and geographic segments

portfolio can be hard to manage

Slow to expand and take advantage of

OPPORTUNITIES

emerging markets

THREATS

Increased demand for business aircraft as a

Economic crisis can decrease demand for

result of globalization
Increased demand from emerging countries
Continually evolving aircraft technology

Cater to environmentalists by producing

new aircraft and rail transportation

High gasoline prices
Fierce global competition, in particular

environmentally friendly products

Aging rail transportation fleet in Europe

from emerging markets, such as China

Social and environmental responsibility

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7. STRATEGIC DISCUSSION
Bombardier Inc. has come a long way since its establishment in 1942 as a snowmobile
manufacturer. The company is now the worlds No.1 passenger train maker and No.3 civil
aircraft manufacturer (Nickels, et al., 2010, p.292) with operations in over 60 countries
throughout the world. Even though Bombardier is a global leader in the aerospace and rail
transportation industries, it is still faced with many challenges. That is, issues such as the
September 11 terrorist attacks, the recent recession, globalization and increased global
competition have had a tremendous impact on the demand for new aircraft and rail
transportation.
However, Bombardier has overcome these challenges by investing in leading mobility solutions,
growing local roots in emerging countries, and aiming to achieve flawless execution at every
stage of the product life cycle (Bombardier, Inc., 2011, p.3).
Moreover, to deliver on its promise of evolution of mobility, sustain a competitive advantage,
differentiate itself from its competitors, and drive future growth Bombardier must continually
evolve and adapt its products and services to meet the ever-changing needs of its customers all
over the world.
To elaborate, Bombardier must also continuously monitor the business environment to be able to
take advantage of opportunities, such as growing demand in emerging countries. Thus, it is
suggested that Bombardier employ a diversification strategy, to promote its new products in new
markets as well as a market development strategy to promote current products in new markets
such as China and India.

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24

Additionally, Bombardier must constantly invest in research and development to maintain its
reputation for being an innovate company and be the first to develop products with the highest
level safety and efficiency standards, whilst utilizing cutting edge technology.
To elaborate further, Bombardier must ensure that it products and services are attuned to the
needs of todays customers. That is, Bombardier must be able to meet its customers concerns
over fuel prices and global warming and emissions by providing fuel efficient and
environmentally friendly products. If Bombardier is able to do this then it can capture another
segment of the market, i.e. environmentalists.
In regards to its subsidiaries Bombardier Aerospace and Bombardier Transportation, it is
suggested that BA take advantage of the growing demand for business aircraft in emerging
markets, whilst BT take advantage of the growing rail transportation needs in China and India,
and the growing need for European countries to renew their rail infrastructure.
Therefore, if Bombardier continually evolves its product and services and adopts the suggested
strategy changes then it should continue to see increases in revenue and profitability well into the
future.
8. CONCLUSION
In conclusion, after careful evaluation of Bombardiers current situation and strategies, various
recommendations to the business level and corporate level strategies were made. Thus,
Bombardier must adopt the above suggested business and corporate level strategies in order to
remain profitable and maintain its leadership position in both the aerospace and rail
transportation industries.

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25

9. APPENDICES
9.1 APPENDIX A GROUP CONTRACT
04-75-100 Introduction to Business Group Contract for Team Project - Bombardier Inc.
Strategy Analysis
Group # Members
1. Name
2. Name
3. Name

email
email
email

(519) 560-7027
(519) 991-3027
(519) 991-8532

Meeting Times and Location

The group will meet on a weekly basis before class on Thursdays (whenever there is a class) at
5:30pm-6:45pm or as further deemed necessary by the group.
Locations
The group will meet at the Leddy Library.
Missed Meeting
If a member of the group cannot make a meeting, the group member will contact all group
members to inform of absence at least 24 hours prior to the meeting.
Schedule of work and responsibilities
Executive summary: Member responsible name
Introduction: Member responsible name
Content & Analysis:
a) Company history and description: Member responsible name
b) Current competitive situation analysis: Member responsible name
c) Forward 5-year business environment projection: Member responsible name
d) Proposed strategic adaptations: Members responsible name
e) Strategic models: Members responsible names
Discussion and Conclusions: Members responsible names

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26

References: Members responsible names

Appendices: Members responsible names
Formatting/Editing: Member responsible name
Deadlines
Deadlines as established in weekly meetings for progress must be kept. All progress
assignments shall be forwarded to each group member for comment. Final product will be ready
for submission by Date.
Behavioural Expectations
1.
2.
3.
4.
5.
6.
7.

Every team member needs to be at every meeting. Be punctual.

Establish and follow meeting etiquette.
Actively participate. Share opinions, listen to others and have an open minded attitude.
Assume positive intent. Constructive criticism only. Compromise where appropriate.
Stay focused. Be prepared for your assignment and keep your commitments.
Help your other group members if they are struggling with something.
Have fun!

We the members of Group # do solemnly agree to the above conditions

Signatures
1.

__________________________________________

Date: __________________

2.

__________________________________________

Date: __________________

3.

__________________________________________

Date: __________________

4.

__________________________________________

Date: __________________

5.

__________________________________________

Date: __________________

9.2 APPENDIX B REFLEXIVE ASSESSMENT OF TEAM PROCESSES

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27

Upon review with group members, it was agreed that on a whole the project was a very good
experience. Each member was left with not only an increased knowledge about the history,
challenges, and opportunities of Bombardier Inc., but also an insight on how to strategically
analyze a corporation. Furthermore and generally viewed as most important, this project was an
opportunity for members to be part of a team working towards a common objective and
experience processes that can lead to high-performance or possible failure of the endeavour. It is
essential to develop teamwork skills as it is estimated that between 70 and 82 percent of U.S.
companies use the team concept, making teamwork skills one of the most commonly required
skills in a work environment. (Introduction to Business 75-100 Custom Publication for
University of Windsor, p. 11).
In week 3 of the course, the teams were formed under selection criteria that ensured that teams
were diverse in gender, culture, and educational discipline. This diverse nature of the group was
regarded by the team as being very important as the world landscape has changed. Todays
global economy has products and services being brought to all corners of the earth, especially in
emerging markets in less developed countries. Global companies must recognize differing
attitudes and competencies in the teams cultural mix (Nickels, et al., 2010, p. 345). When the
team was initially formed, the members did not know each other, other than simply fulfilling the
diversity scope of the project. An early success was found at easing the feelings of uncertainty
when we formally introduced ourselves and mutually decided on which company we would
choose to analyze. Each member was allowed input and encouraged to provide their opinions.
This initial act began to secure our trust in one another that our relationships could be open, a
characteristic of a high-performing team.

BOMBARDIER INC. STRATEGY ANALYSIS

28

Continuing in our forming stage, at our first meeting, structure was given to how we would
attack the project.

Meeting times and clear communication processes (email, text) were

established. Emphasis very early on was given to the common purpose of the team and it was
understood by all that we would all be dedicated to ensure the project was completed effectively.
Although each member was given input on how to begin the project, roles were starting to
become apparent.

Some team members were more focused on completing individual

assignments while others were looking at the bigger picture. Leadership naturally began to
emerge in the form of a project manager role to ensure that our accountabilities were clear and
expectations were stated. In retrospect, to fully appreciate this concept, the team could have
formally designated roles and responsibilities (i.e. project manager, communications liaison, etc.)
to ensure that we were aware of how our work affects other members. Nevertheless, this did not
seem to adversely affect the team, it was almost a quiet understanding.
Over the course of the weeks, work was performed individually and as agreed upon, the finished
pieces would be provided well in advance to all other members for critique and approval.
Following the group contract, positive intent was always assumed and only constructive criticism
was provided to each member. Group members did provide feedback, and only when consensus
was achieved, was the work submitted as part of the final project. There was no conflict
encountered at this stage be it a product of our group exhibiting the aforementioned highperforming characteristic, or perhaps an unwillingness to provide harsher criticism in order to
preserve the good harmony in the group.
Challenges did arise in the form of timelines and scheduling conflicts. Procrastination was
inevitably an issue with one member in particular.

It can be attributed to the lack of

BOMBARDIER INC. STRATEGY ANALYSIS

29

understanding of the scope of the assignment on the individuals part, not for lack of the team
communicating. The team however did do a good job at realizing these potential issues when we
first met. Efforts were made to begin the project as soon as possible and ensure that a time
buffer was provided to account for both procrastination as well as conflicting priorities within
the group in which we could not meet. Proper communication was key in minimizing these
issues. Team members were made aware of any timelines that could not be met as initially
agreed upon, however members were held accountable to provide active updates on contingency
progress.
Team conflict was only encountered toward the end of the project when completed work was
being presented and ready for merging into the final product. It was here that team members
began to question their individual contributions. Note that team members did not question the
contribution of others, but in fact of whether their own contributions were enough. These were
surprising comments as one would tend to believe we would encounter social loafers, what
typically happens when the team members work ethics may differ and one or more team
members step up to the plate and take on added responsibility to ensure the work gets done
(Introduction to Business 75-100 Custom Publication for University of Windsor, p. 11). It is
believed that team members were proud to be part of this team, felt valued and did not want to let
the rest of the team down. Nevertheless, the solution to either of these issues was the same. The
responsibilities may have required to be divided more clearly in our forming stage. To right the
ship, a review took place to ensure we could have members looking to contribute further to take
on added assignments (checking Turnitin results, etc.). Also, another major lesson the entire
group learnt was to start future projects earlier, in order to have sufficient time to complete the
project.

BOMBARDIER INC. STRATEGY ANALYSIS

30

9.3 APPENDIX C TABLES & FIGURES

BOMBARDIER INC. STRATEGY ANALYSIS

31

Figure 1 - Global Competitiveness in the Rail and Transit Industry (Renner, M., & Gardner,
G., September 2010)

Table 1 The Strategic and Economic Impact of the Canadian Aerospace Industry (Deloitte
& Touche LLP and affiliated entities, October, 2010).

10. REFERENCE LIST

BOMBARDIER INC. STRATEGY ANALYSIS

32

1. ALSTOM (2012). About Us. Retrieved from http://www.alstom.com/about-us/

2. Boeing (2012). About Us. Retrieved from

http://www.boeing.com/companyoffices/aboutus/

3. Bombardier, Inc. (2012). About Us. Retrieved from

http://www.bombardier.com/en/corporate/about-us
4. Bombardier, Inc. (2011). Annual Report. Retrieved from
http://ir.bombardier.com/modules/misc/documents/03/62/76/32/13/BombardierAnnualReport_De
c2011_2nd-Web-post_en.pdf
5. Bombardier, Inc. (2012). Mission Statement. Retrieved from
http://www.bombardier.com/en/corporate/about-us/mission---values/mission-statement?
docID=0901260d8000c494
6. Bombardier, Inc. (2012). Profile. Retrieved from http://ir.bombardier.com/en/profile
7. Canadian Broadcasting Corporation [CBC]. (2003). Turbulence: Air Canada & Bombardier.
Retrieved from
http://newsinreview.cbclearning.ca/wpcontent/archives/may03/PDFs/turbulence.pdf
8. Custom Publication for University of Windsor. (2011). Introduction to Business 75-100.
Canada: McGraw Hill Custom Publishing.
9. Datamonitor. (2010). Global Top 10 Aerospace and Defense Companies Report: Industry,
Financial and SWOT Analysis. Retrieved from http://www.datamonitor.com/
10. Deloitte & Touche LLP and affiliated entities. (October, 2010). The Strategic and Economic
Impact of the Canadian Aerospace Industry. Retrieved from
http://www.aiac.ca/uploadedFiles/AIAC_ExecSummary%20-%20Final%20_2_.pdf
11. Hoovers, Inc. (2012). ALSTOM overview. Retrieved March 1, 2012, from Hoovers Company
Records database: http://search.proquest.com/docview/230549273?accountid=14789
12. Hoovers, Inc. (2012). Bombardier, Inc. top competitors. Retrieved March 1, 2012, from
Hoovers Company Records database: http://search.proquest.com/docview/230549273?
accountid=14789
13. Hoovers, Inc. (2012). Siemens Aktiengesellschaft. Retrieved March 1, 2012, from Hoovers
Company Records database: http://search.proquest.com/docview/230549273?accountid=14789
14. Hoovers, Inc. (2012). The Boeing Company. Retrieved March 1, 2012, from Hoovers
Company Records database: http://search.proquest.com/docview/230549273?accountid=14789
15. Marketwire. (June 15, 2009). Bombardier Aerospace Releases Annual Market Forecasts.
Retrieved from http://www.wingsmagazine.com/content/view/2990/132/
16. Nickels, W. G., McHugh, J. M., McHugh, S. M., Cossa, R., & Sproule, B. (2010)
Understanding Canadian Business. Canada: McGraw-Hill Ryerson

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17. Railtex (2009). Retrieved from www.railtex.co.uk

18. Renner, M., & Gardner, G. (September 2010). Global Competitiveness in the Rail and
Transit Industry. Retrieved from
http://www.worldwatch.org/system/files/GlobalCompetitiveness-Rail.pdf
19. Reuters (2008). Retrieved from http://www.reuters.com/article/2008/06/04/bombardieridUSN0433637820080604?&lang=en_us&output=json
20. Rohanek, L. (2006). Strategic Marketing Workbook. Sydney: Granville College of TAFE
Australia.