Bombardier Incorporation is a respected company in processing the tools of the travelling. It deals with the business enterprise and commercial airplane, rail transportation gadgets and they provide the related services. They actually discounts in aerospace (BA) and rail transportation (BT). They actually the developing as well as the creation of the aerospace products plus they also provide the services related to this through BA. Whereas Bombardier Incorporation designs and makes the rail machines as well as they offer the services for maintenance, control system for the rail team and so other things. Bombardier Transport France S. A. S. , Bombardier Transport (Holdings) UK Ltd. , Bombardier Aerospace Organization and Learjet Inc. are the major business concerns of Bombardier Incorporation. Bombardier is one of the primary railway equipment specialist. Though this is a Canadian company, it does its business outside Canada and major elements of its revenues comes from outside the house Canada which is( 95% of its total earnings). The business has well control on its total business all around the globe.
Globalization:
Globalization means spreading something worldwide. In case there is business this is a intention to operate the business internationally. This is an integral part of a centralized business system which intends to use its business across the world. It allows browsing the world as one large market for product, service, capital, labour and knowledge. As it concerns global procedures, there could be several characteristics of any globalized business. there are a few phase for a corporation to be "global"
1st Period:
1. Decide to spared their market in other country.
2. Sell a product internationally and do work between international distributors
3. Use talented people in globally
2nd Phase:
1. Are a borderless company
2. Increase trade from both guidelines - domestic and international
3. Major segment of international market talk about for a specific service or product.
3rd Phase:
1. They have to be more reliable and presenting their perfect service to highest level.
2. They have to acquire communication channel internationally
3. To have a good knowledge about business market it isn't preferable to rely not only home perspective but international one also.
An analysis can be drawn while discussing the business of Bombardier Incorporates these are operating their business in 60 countries at 5 subcontinents on the planet. They can be associated with so many areas of business such as Aerospace, rail transport and Bombardier capital. They spreaded their business worldwide daily. Their first international deal was with New York City. The agreement was going to supply the 825 subways for $1billion. They also spreaded their business in European countries as well.
What led Bombardier Inc. do their business internationally:
There was an enormous change in global overall economy when the business moved internationally. It helped bring the whole world jointly under the branding and knowledge. These can be discussed by using international trade theories and determinants of trade routine (Zhang, 2008). International trade theory by which much more understanding of the global business can be had. Those are as follows:
Mercantilism theory: Mercantilism theory originated by Jean Baptist. Corresponding to him, the wealth of the entire world is set. So every time a country exports more than it imports, it will be highly good for them plus they can enjoy the net gain or earnings from the export-import process. Corresponding to the theory it should be mandatory for each and every country to pay interest on exporting alternatively than importing.
Absolute advantages: In 1776, Adam Smith developed this theory. Corresponding to this theory, under free trading, every single region can be benefited by having a special knowledge in economical activities and the data of the nation having the overall advantages. Accordingly, each and every country should be creating more products. If indeed they export their products to other then it is complete advantages but there is no absolute advantages if indeed they import.
Comparative Advantages: in 1817, David Ricardo developed this theory. This is nothing but the changes of the overall theory. Comparative advantages theory represents that two countries which are experiencing absolute advantages, their cost to create some opportunities will be suprisingly low. So these countries must have more interest on producing and exporting.
Factor Endowment: Heckscher-Ohlin developed this theory. They concentrate on most important factors of creation. That are land, labour and capital. They mentioned that a countries export should predicated on the exploitation of home factor endowment. Generally countries are labour extensive others are capital extensive.
Those trade ideas will be very clear by drawing some examples. In case of China and Nigeria, both the countries are experiencing definite advantages. Nigeria is enjoying the absolute advantage in recycleables especially in essential oil while china is having that in rail anatomist. So if both of them come to a business package, China can benefit from the absolute advantages by giving Nigeria executive services to build up their Rail transport system. Whereas Nigeria can enjoy the total advantages by providing engine oil to China so that china can boom up their market.
Challenges of global business for Bombardier Incorporation:
While owning a business globally, there might be some challenges as well as the benefits for the business. In case of Bombardier Incorporation in Nigeria it was the same. Some of benefit and problems are mentioned below-
Benefits associated with global business:
Margin of market one of the biggest benefits for an organization, running their business globally is nothing other than obtaining the margin of current economic climate. Bombardier Incorporation has stared their business in 1930 and today functioning in 60 countries with pride.
Increase sales and revenue of the company Bombardier Incorporation is operating their business internationally in 60 countries. So they have the greater opportunities to have more sales and consequently to have significantly more gains. They turnover is increasing daily. In case of 2008, their turnover was US $109 million whereas it was risen to US $164 million in 2009 2009.
Expand global market talk about of the business is working its business in several countries of the world, you can find a big chance for the company to obtain the market share of different companies of the world. Bombardier Incorporation is world's major rail transport company and it had captured or in other term it acquisited different companies in various countries like UK, Mexico, German etc.
Challenges associated with global business:
Political instability takes on an important role in global business which is a great obstacle for a corporation running business globally. In case there is Bombardier Incorporation, they authorized a deal with Nigeria to build up modern rail travel system, but it got cancelled when the federal government of Nigeria is transformed.
Security problem is another concern for Bombardier incorporation. Bombardier incorporation got some security problem as well in Nigeria. The neighborhood terror may create huge effect on the global business. In case there is China, while these were operating their business in Nigeria, the technical engineers have been kidnapped by the local terror and it created a huge impact on the engineering progression.
Market fluctuation is another challenge associated with global business. It really is nothing but the fluctuation in trade rate, interest rate, inflation. The are immediately from the business and have great effect on global business. The business's total revenue may get decreased. In case there is Bombardier Incorporation, its revenue got reduced by 3% by the entire year 2010.
Analysis of Organizational Composition for Bombardier Transportation (BT):
Organizational composition is nothing but the allocation of obligations to different associated section for the achievements of the goal of the company. The organizational composition is associated the objective, perspective, goals of the business. It's the thing that may lead the company to implement their strategy efficiently and to become a successful one.
Bombardier Travelling uses common organizational framework. They are having four divisional areas of which three are product areas and five efficient areas. Bombardiers strategy and functional plans depends upon president and ceo of Bombardier Travelling. Chief executive and CEO also received the duty of performing the board's resolutions and regulations and delegating permanent tactical business plan. Bombardier Plank of Directors having 13 directors where eight directors are unbiased. They are employing this kind of structure for the better uses of the resources. It can be shown with a graph-
Figure: Organization structure of Bombardier Inc
President
Passengers
Locomotive and Equipment
Services
North America
(BTNA)
System
Rail Control Solutions
Human Resources
Communication & Open public Affairs
Chief Information Officer
Strategy
Project Management & chief Technical Officer
Sales & Business Development
Operations
Health, Security & Environment
Finance
Contracts & Legal Affairs, Intellectual Property Protection under the law, Bid Acceptance & Lay claim management
Structured Fund, Treasury, Mergers and Acquisitions
Source:
All the arrangements for the organizational structure of Bombardier Transportation are done perfectly. In 2007, Bombardier Vehicles set up a CSR committee. The committee supports and oversees the implementation of bombardier inc. `s CSR commitments. They acquired five task pushes are costed with managing the following issues: energy efficiency of Bombardier travel and products, CSR over the supply chain, human resources and stakeholder engagement, and sustainability. They received target to boost their performance in specific site and action. Like management system, environment and health and safety concern.
Corporate governance of Bombardier Transport ensures proper management of their business, increasing suffered profitability and shareholder value. They maintain rigorous compliance among their governance related reporting and regulatory requirement. They also maintain highest ethical standards. For the proper operation of the business enterprise the business has three stock divisions :The American, Asia pacific and European countries.
The company does business in Aerospace area such as business air craft, commercial air build, jet air solution, specialized aircraft, aeroplanes service and training. And the other major area is Rail Transportation-rail vehicle, boggies, rail control system etc. And the last but not the least is Bombardier capital such as inventory, railcar etc.
Critical evaluation of contract between China Railway and Nigeria Authorities:
China and Nigeria acquired a deal between them in 2006. It had been going to modernise the Nigeria rail transportation system By China to hook up 36 major places situated within 4846. 6 mile. It was very important project for both the countries. A number of important factors faced by China in Nigeria are discussed below-
In terms of Risk,
Political instability is one of the resistances in the form of development of Nigeria. Based on the change of the government, so many commercial decisions should be changed. As for example it can be say, China experienced a deal with Nigeria in 2006, however when the new government come in 2008, the ministry for transfer cancelled the contract.
Security and Corruption is the hindrance for any country to be developed. In case there is Nigeria, it is so bad that if any foreign investor involves invest in Nigeria, they have to pay large amount of bribe money which includes bad effect on the contract execution. The foreign shareholders feel insecure to purchase Nigeria due to the local terror kidnapping the foreign employers. For this Nigeria is lagging behind in case there is development.
Cultural Aspect:
Technological impact: This contract was very effective one for Nigeria Authorities. For the execution of the deal China has developed technological sites which include communication way, multimedia, energy etc as well as supportive sectors of rail way, which greatly impact on Nigeria market.
In conditions of MONEY for Nigeria:
Economic development Nigeria: China got the contract with the Nigeria federal government for the mordernation of the rail transport system of Nigeria. This deal had a great contribution to the economic booming of the Nigeria administration. The rail system connected 36 major towns of the countries, which leads their transportation system to be high up. 36 trains are working per day in various metropolitan areas as well as 40 million transports per year.
Benefits of Nigeria: As Nigeria acquired the united states $2. 5 billion, they received the chance to modernise their infrastructure. It brought a huge change in Nigeria.
Economic flourishing in China: China was highly benefited by this agreement as they received the recycleables as engine oil for the creation of these cheap products. And it leads those to economic booming.
Financial benefits associated with china: The agreement was made for US $2. 5 billion as a loan to Nigeria by China with the interest rate 2. 3%. Because of this China acquired the financial reap the benefits of Nigeria.
Analysis of agreement with common performance:
Ansoff Matrix
A matrix was shown by Igor Ansoff which gives focus on the company's products and its own market. It offers the idea about the existing products in existing market as well as the new products creating the new market. The matrix is shown below:
Existing Products
New Products
Existing
Markets
Market Penetration
Product Development
New
Markets
Market Development
Diversification
Market Penetration: Whenever company wishes to distributed in market, it needs to check out some penetration strategy. As penetration strategy can affect a lot of its resources and capacities. When a rival company reach to its capacity restrictions, there could be chances of growing the marketplace shares.
However, Bombardier market has limit of penetration and whenever it gets its saturation point; the company should follow another technique to exist on the market and to continue its progress.
Market Development: Market development means increasing the business enterprise of an company within an existing market using its products as well as to attract the new customers. The marketplace development includes spreading the marketplace to international level in new geographical areas to draw in clients (Lynch, 2003).
In The Bombardier Incorporate has extended its business internationally to expand its business.
Product Development: The merchandise development is associated to the prevailing customer rather than the existing products. A new product can be presented to the marketplace to its customers to build up its power depending on their taste. The merchandise is unfamiliar and the market is familiar. That is a achievable territory too.
It can be said that Bombardier always developing their product from very beginning. In 1907, they first create to the marketplace by snow vehicle and then in 1937, efficiently they start B7 snowmobile and on the other hand B12 snowmobile.
Diversification: Diversification means inclination of the company to a new business deviating from its key competencies. It might be a suicide cell for the business as it is to be launched to the new market. It needs the market survey, market development as well as the merchandise development. This is actually the most risky strategy of the company to check out. But this risky may be diminished by the high value return to the company.
In 1986, Bombardier speared there business in Europe and for the reason that time they was world most significant rail equipment and service produce company but in that calendar year they inserted aerospace industry. So Bombardier company diversified in new business.
Strategic approach to Bombardier Transportation to type in Africa and SOUTH USA:
Business expansion implies the raise the operation in several market. When any business are successes in present condition, then make an effort to extend in broader area. There are several ways to extend business, which can be discussed below-
1. Jv: Joint venture is a contractual agreement between two or more parties for functioning business. In joint venture both parties similarly make investments their capital, time, and effort in business and both get-togethers agreed to discuss profit and loss of the business (www. investorwords. com).
2. Merger and Acquisition: A merger is a loan consolidation of business or blend of two businesses to form a fresh business. Within a merger, combo between business to be equal. On the other hand, acquisition is a bought a small business or purchase by another company. In acquisition, home based business is not shaped (www. quickmba. com).
3. Strategic alliance: A proper alliance is short-term contractual arrangement between businesses to acquire pursue particular goal, but both business are logically conducting business individually. The main purpose of proper alliance to be strong market scale, achieve critical goal, reduce competition, etc (www. 12image. com).
4. Organic progress: organic expansion refers to increasing business using own resources and advantage. Organic growth does not refer to increase business by merger, acquisition and other proper way. It really is natural enlargement of business (www. ehow. com).
There are one strategy are not suitable to enter into African and South American market. To develop business in Africa and SOUTH USA, it is be based upon your competition, market condition, and financial condition, ease of access of individual market. There are several strategic solutions to expand Bombardier Travelling in Africa and SOUTH USA are discussed below-
Strategy to get into Africa:
Bombardier Incorporation is broadening its business day by day. Whenever it desires to enter a market, it needs to do some study. In case of Africa, the Bombardier Company (BT) may have a greater market to be entered. Africa's infrastructures aren't so good and well toned. So if Bombardier Travelling wants to enter in Africa specially in Western world Africa (like Nigeria, Ivory Shoreline ), the tactical plan which needs to be used is the one and only organic growth. It will be easier to enter into west Africa following organic growth as
1. The infrastructure of the Western world Africa is not well furnished,
2. There is absolutely no rival for BT
3. BT can have a great deal of opportunities there.
4. They will not have to follow any standard framework for the accessibility to Western world Africa.
If the BT follows the Organic Growth strategy for access in West Africa, they can have some benefits such as they can control the business according with their business goal, you will see no cultural risks. Moreover, they can begin as a newly setup business (www. answer. com).
But in case there is South Africa it is little bit tough to be came into also to start business as they will have to face rivals like SE, BEE, AA. In this case the strategy needs to be used is Merger and Acquisition rather than organic growth. It will be quite beneficial and cost effective (www. emita. org)
Strategy to enter in SOUTH USA:
South America especially Brazil is an excellent market for BT as this is actually the most emerging country for future extension among the list of eight countries. BT is doing its business in Brazil as a market leader till now. So for further enlargement of its business in Brazil, it is more suitable for BT to follow the Acquisition Strategy. As market innovator, alliance or merger will not be ideal for them. (www. theglobeandmail. com)
In case of Venezuela, Argentina and Peru, joint venture would be the sweetest technique to be followed for the expansion of the business for BT. To enter into a fresh market which has the same product, it is preferred to check out the jv strategy to find the market talk about as this will lead to some beneficiary things-
It will help to access a fresh strong position in a new market as well as the network syndication.
Partner may also be accountable for taking risk and cost effects
It is a easy way to get skilled personnel, technology, and finance
In circumstance of travel industry, jv is the most familiar to be adopted to expand the business enterprise in a fresh market.
So from the above conversation it is very much clear that for business extension and adoption of the business enterprise strategy, it totally will depend on the opportunities, size of the market, competitors, local rules and rules and moreover on the company's own strategy.
