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Business unit strategy: generic strategy
Task No1
Presented to Ahmed Shehzad
Presented by Nabeel Ahmed
Mcm 05123045
Bombardier Aerospace
INTRODUCTION
when you think about Bombardier, you think of a company that is the leader in the
market...
History:
In 1942, J.-Armand Bombardier found a company to
manufacture tracked vehicles for transportation on snow-
covered...
Business unit strategy: generic strategy
Business unit strategy involves a choice between the lowest cost (cost leadership...
The choice of competitive strategy
Potter believes there are three generic strategies for competitive advantages.
(a): Cos...
Cost leadership
Bombardier aerospace is the cost leadership company He
produce low cost, When you think about Bombardier, ...
How to achieve overall cost leadership
(a): Economies of scale.
Company has a great set up to meet the production order, S...
Differentiation
The company has two main products who manufactured.
• Bombardier Aerospace
• Bombardier Transportation
(a)...
How to differentiable
 Give the product special features:
• Every day, millions of people get where they need to go aboar...
Focus (or niche) strategy:
After acquiring a few companies, Bombardier Aerospace was now faced with the
challenge of how t...
Production:
Bombardier Aerospace fiscal or calendar year delivery of regional, business
and amphibious aircraft:
• Net ord...
Drawbacks of a focus strategy
• The firm sacrifices economies of scale which would be gained by serving a
wider market.
• ...
Task no2;Strategy clock
The strategy clock develops porter’s theory, analyzing strategies in term of price and perceived
v...
Low Price/Low Value
Bombardier company not fall in this point because he charge low price but provide
high quality.
Low Pr...
Differentiation
Bombardier keep their prices low and seek greater market share as compared Boeing
and air bus company. Bom...
Focused Differentiation
Bombardier Company focus on the making cs3000 jet in future and provide high
quality with charge o...
Mid Size Passenger Jets(Bombardier-Aerospace
Bombardier C Series CS100
Price- 62.00 Million USD
Editor Rating - 8.10
Bomba...
Passenger Turbo Props(Bombardier-Aerospace)-
Bombardier Q200
Price- 13.00 Million USD
Editor Rating - 6.80
Bombardier Q300...
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  1. 1. Business unit strategy: generic strategy Task No1 Presented to Ahmed Shehzad Presented by Nabeel Ahmed Mcm 05123045
  2. 2. Bombardier Aerospace INTRODUCTION when you think about Bombardier, you think of a company that is the leader in the market in which it operates. Today, the company controls two industry-leading businesses which are Bombardier Aerospace and Bombardier Transportation. They have groundbreaking products that range from commercial aircrafts, business jets, rail transportation equipment, systems and services. Its headquarters are in Montreal, Quebec, Canada. Bombardier and their shares are operated on the Toronto Stock Exchange (BBD) and they are listed on the Dow Jones Sustainability World and North America indexes. Bombardier Inc. set strong priorities for international growth. They are constantly increasing their presence in growing economies and that lets them capture opportunities, generate cost advantages and reinforce their worldwide leadership and competitiveness.
  3. 3. History: In 1942, J.-Armand Bombardier found a company to manufacture tracked vehicles for transportation on snow- covered terrain. The company's name was L'Auto-Neige Bombardier Limitée. •On January 23, 1969, listing of Bombardier stock on the Montreal and Toronto stock exchanges and public offering of two million shares. Shares were now traded on the Toronto stock exchange. •In December 1986, acquisition of Canadair, leading Canadian aircraft manufacturer. •In March 1990, creation of subsidiary Bombardier Real Estate Ltd., responsible for the management of Bombardier's real estate assets. •In March 1992, acquisition made through a new company, de Havilland Inc., whose equity is shared by Bombardier (51%) and the Province of Ontario (49%).
  4. 4. Business unit strategy: generic strategy Business unit strategy involves a choice between the lowest cost (cost leadership) making the product different from competitor product in some way (differentiation) or specializing on a segment of the market (fous,by addressing that segment by a strategy of cost leadership or differentiation).porter believes that a firm must choose one of these or be stuck-in-the-middle.
  5. 5. The choice of competitive strategy Potter believes there are three generic strategies for competitive advantages. (a): Cost leadership: Means being the lowest cost producer in the industry as a whole. (b): Differentiation: Is the exploitation of a product or services which the industry as a whole believes to be unique (c): Focus: Involves a restriction of activities to only part of the market (a segment) • Providing goods and/or services at lower cost (cost-focus) • Providing a differentiated product or services (differentiation-focus)
  6. 6. Cost leadership Bombardier aerospace is the cost leadership company He produce low cost, When you think about Bombardier, you think of a company that is the leader in the market in which it operates. Today, the company controls two industry-leading businesses which are Bombardier Aerospace and Bombardier Transportation.
  7. 7. How to achieve overall cost leadership (a): Economies of scale. Company has a great set up to meet the production order, Soon after, the company received an even bigger contract requiring the construction and supply of 825 subway wagons for the city of New York, making it the North American leader in the railway industry. (b): Latest technology. Company use latest technology in manufacturing of aero planes or trains.
  8. 8. Differentiation The company has two main products who manufactured. • Bombardier Aerospace • Bombardier Transportation (a): Improved product: The companies are not radically different from their competition but are obviously superior in terms of better performance at a competitive price. (b): Competitive products: Bombardier aerospace and bombardier transportation is better than others because they provide good service in low cost.
  9. 9. How to differentiable  Give the product special features: • Every day, millions of people get where they need to go aboard the planes that we manufacture. Perhaps you do too. Our more than 35,500 employees design, build and service high- performance aircraft. We set the standard of excellence in several markets, including: • Business aircraft - Learjet, Challenger and Global aircraft families • Commercial aircraft - CRJ Series, Q-Series and Series aircraft families • Amphibious aircraft - Bombardier 415 and Bombardier 415 MP aircraft • Specialized aircraft solutions -Bombardier aircraft modified for special missions • Aircraft services and training - aircraft parts, maintenance, comprehensive training, technical support and publications, and online services Bombardier Aerospace is part of Bombardier, a global transportation company present in more than 60 countries on five continents. Bombardier’s other core business is Bombardier Transportation, the world’s largest train manufacturer.
  10. 10. Focus (or niche) strategy: After acquiring a few companies, Bombardier Aerospace was now faced with the challenge of how to align the operations of these companies who all had different sets of data, processes and systems. Major areas of concern were process delays, low inventory turn, inconsistent pricing and billing of materials among others. Bombardier introduced the Enterprise Resource Planning (ERP) into its aerospace division with a vision to achieve higher efficiency in manufacturing and also to significantly save cost. To assess the performance of this IT project, Bombardier Aerospace needs to consider the following six variables which are interdependent as far as success or failure is concerned. • system flexibility, • system variability • ease of learning • Information Quality
  11. 11. Production: Bombardier Aerospace fiscal or calendar year delivery of regional, business and amphibious aircraft: • Net orders(2006 to 2013) • 363 • 698 • 367 • 311 • 201 • 249 • 481 • 388
  12. 12. Drawbacks of a focus strategy • The firm sacrifices economies of scale which would be gained by serving a wider market. • Competitor can move to the segment, with increased resources.(e.g. bombardier moved into the uk luxury air bus market, to compete with Boeing air bus) • The segment’s needs may eventually become less distinct from the main market
  13. 13. Task no2;Strategy clock The strategy clock develops porter’s theory, analyzing strategies in term of price and perceived value added.
  14. 14. Low Price/Low Value Bombardier company not fall in this point because he charge low price but provide high quality. Low Price Bombardier companies charge a low prices with the high volume strategic reasons for their position, they can sustain this approach and become a powerful force in the market. Hybrid (moderate price/moderate differentiation) Bombardier CSeries aircraft is positioned as value advantaged in the commercial airplane manufacturing market space. Since the CSeries offerings deliver superior value to customers relative to competitors at lower list prices, Bombardier’s go-to-market pricing strategy is consistent with a penetration pricing methodology. Bombardier’s aggressive entry tactics for the CSeries aircraft offers a credible threat to existing Boeing and Airbus revenue.
  15. 15. Differentiation Bombardier keep their prices low and seek greater market share as compared Boeing and air bus company. Bombardier make machinery for jets and trains he provide high quality product at low prices. Product feature Bombardier Transportation is the leading manufacturer of rail technology in the world. Around 70% of the vehicles used in Swiss public rail transport also come from Bombardier Marketing, including powerful brand promotion • Bombardier stands for the highest quality in railway technology • Bombardier always offers an exceptional price/performance ratio on its products and services. • Bombardier guarantees efficient business processes that are certified in accordance with international standards. • Bombardier offers solutions creating real added value for its customers. • Bombardier is a partner who can be relied upon.
  16. 16. Focused Differentiation Bombardier Company focus on the making cs3000 jet in future and provide high quality with charge of high price. Increased Price/Standard Product Bombardier provide high quality product due to increase in price they also improve the standard quality of product. High Price/Low Value Bombardier company not use monopoly pricing strategy because there are many competitor in the market (e.g. boeing,airbus,emarite)
  17. 17. Mid Size Passenger Jets(Bombardier-Aerospace Bombardier C Series CS100 Price- 62.00 Million USD Editor Rating - 8.10 Bombardier CS300 Price- 71.00 Million USD Editor Rating - 8.90 Light Passenger Jets(Bombardier-Aerospace Bombardier CRJ 200 Price- 21.00 Million USD Editor Rating - 7.30 Bombardier CRJ 700 Price- 24.39 Million USD Editor Rating - 8.25 Canadair CRJ Series 705 Jet Price- 29.00 Million USD Editor Rating - 7.75 Bombardier CRJ 1000 Price- 46.37 Million USD Editor Rating - 8.60
  18. 18. Passenger Turbo Props(Bombardier-Aerospace)- Bombardier Q200 Price- 13.00 Million USD Editor Rating - 6.80 Bombardier Q300 Price- 17.00 Million USD Editor Rating - 8.00 Bombardier Q400 Price- 27.00 Million USD Editor Rating - 8.40 Heavy Business Jets(Bombardier-Aerospace)- Bombardier Global 5000 Price- 49.00 Million USD Editor Rating - 8.90 Bombardier Global Express XRS Price- 51.00 Million USD Editor Rating - 9.20
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