Bombardier and Information Technology   Term Paper ID:35434 Click to get this paper

Essay Subject: Considers technology at Bombardier in context of SWOT and Porter's Five Forces.... More...

11 Pages / 2475 Words 10 sources, 15 Citations, MLA Format $44.00 Return to List of Papers

Paper Abstract: Considers technology at the Canadian compnay Bombardier (manufacturer of aircraft and rail cars) in light of its strategic performance during the 1990s and 2000s and the role information technology played. Provides a SWOT and Porter's Five Forces analysis. Paper Introduction: Introduction Bombardier initially made a name for itself in snowmobiles but todayis one of the world\'s largest manufacturers of aircraft and rail cars Thecompany sold off its snowmobile operations in December to members ofthe Bombardier family and is now focused exclusively on aerospace andrail as well as providing financing within these product lines Thisresearch examines the company\'s strategic performance during the s and s and examines the role that information technology plays in this non-information technology organization Background Bombardier is a Canadian-based Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Suchacquisitions provided economies of scale, but also saddled companies withconsiderable debt. On the manufacturing side, there was considerableconsolidation as some major manufacturers went out of business while otherswere acquired by their competitors. Information Technology at Bombardier Bombardier uses information technology internally to maintaincommunication and synergy among its various far-flung markets, andincreasingly is introducing information technology in the company's productlines to improve its product offerings. It has shifted from being a one-product companyselling snowmobiles to a company that participates in the largesttransportation products available today--aircraft and trains. Bombardier participates in the transportation market through bothlocomotives and rail cars. "A Showpiece for a Showplace." Mass Transit, (Sep/Oct 2 2): 36-5 . In fact, over the past ten years, sales increased at an averageannual rate of 18.5 percent while earnings increased at an average annualrate of 19 percent. This offers the company anadditional marketing opportunity to integrate information technology as akey component of its product line (Enckell 3 ). This is a company whose internal corporate culture adjusts tochanging market conditions and is able to enter new markets successfullythrough acquisitions. But Bombardier has focused on growth through acquisition, and that hasmade it difficult for the company to thrive as it seeks to integrate newacquisitions. This ability comes about because of an internal organizationthat emphasizes innovation. It has foundinnovative uses for its products, and marketed existing products for newuses, and it continues to be a pioneer in the segments in which itoperates. Ross, et al. Despite this, there arealready many aircraft already in storage that are in acceptable operatingcondition; the downturn in passenger demand has forced this storage. Thecompany sold off its snowmobile operations in December 2 3 to members ofthe Bombardier family, and is now focused exclusively on aerospace andrail, as well as providing financing within these product lines. "Knowledge Management in Research and Development." Research-Technology Management 44(Jul 2 1): 28-59."The Dogfight for Bombardier's Niche." Business Week, (Aug 6, 2 1): 7 B.Enckell, Christoffer. These markets have opened up inrecent years as Americans have sought ecologically-friendly alternatives tomass transit. Aerospace now contributed most of the company'srevenues and profits (65 and 87 percent, respectively), while the company'sfinancial services lost money in 2 1. Quebec, Canada: Bombardier, Inc., 2 3."Aircraft". The company is also highly dependent onits aerospace business, which makes its market share position a criticalsuccess factor in both the short- and long-term. For example, Boeing acquired its lastsignificant American rival when it purchased McDonnell-Douglas. The JetTrain is a turbine-powered locomotive designed for NorthAmerican markets not already served by electric trains, and uses an engineoriginally designed and used in aircraft. Boeing has considerable resources that it can bring tobear, and is a formidable competitor. In 2 1, the company acquired DaimlerChryslerRail Systems GmbH, a move that gave the company increased access to theEuropean rail market. However, Bombardier is in a good position to take advantage of marketopportunities that emphasize quieter, more efficient aircraft. Any short-term financialdifficulty can be exploited by the competition, and consolidation inaerospace--as well as struggling rail lines--results in a shrinking numberof customers within the company's primary markets. After Bombardier lost several majorcontracts to Embraer because of subsidies--in Bombardier's opinion--it tookthe issue to the World Trade Organization (WTO) where it charged Embraerwith unfair trade practices. Although the company is no longer dependent on snowmobilesfor its success, it is highly dependent on the volatile aerospace industry. Corporate jets have been popular for verywealthy individuals as well as for corporations who make them available toexecutives; such aircraft provide an alternative to commercial flights andprovide more flexibility as far as schedules. However, Bombardier's success in this market did not go unnoticed, andit did not take long for other companies to enter and compete againstBombardier. The company will need to overcome Amtrak'sperception of Bombardier products before it will be able to market itsJetTrain successfully. Background Bombardier is a Canadian-based company with operations throughout theworld. The primary threat to Bombardier is that it competes in highly capital-intensive industries that require significant returns in order to remainprofitable. This passenger locomotiveis designed to run at 15 miles per hour, but Bombardier maintains that itis quieter, lighter and pollutes less than traditional high-speed dieselengines. Bombardier has also successfully introduced passenger informationsystems into its rail line, a product feature that enhances theattractiveness of Bombardier's rail products. Thishigh-speed train was eventually pulled by Amtrak when it was discoveredthat more than half of the trains had small cracks in their suspensionsystems ("All Aboard" 4). As the hub and spoke system became theindustry standard, there was greater demand for smaller aircraft.Bombardier filled this niche and, as a new supplier, provided an attractivealternative to traditional aircraft manufacturers who did not serve themarket at all, or on only a limited basis ("The Dogfight," 4). Thisresearch examines the company's strategic performance during the 199 s and2 s, and examines the role that information technology plays in this non-information technology organization. The current company came into existence through the merger ofBombardier Limited and MLW-Worthington Limited in 1976. This indicated that although the aerospace sector contributed thelargest percentage of revenue, its operating profits were lower than othersegments of the company (Schlein 556). Opportunities for the company are found in its continuation of productlines in its core industries. The system combines quiet and ecologically-friendly transportation with convenience. This gave buyersincreasingly less bargaining power with their suppliers and concentratedpower in the hands of suppliers. Although the company only entered the aerospace market in theearly 199 s, it quickly became a significant participant in that market.Through strategic acquisitions and aggressive marketing, Bombardier endedthe 199 s as the third largest manufacturer of aircraft in the world,behind Boeing and Airbus ("The Dogfight" 7 B). In addition, Bombardier has itself been the recipient of favorablesubsidies from its own government. Over the past five years, sales increased at an annualrate of 19 percent while earnings increased at 16.5 percent annually duringthe same period (Schlein 549). SWOT Analysis Bombardier's greatest strength is manifest in its ability to reinventitself. Embraer is a Brazilian aircraft manufacturer which competesdirectly against Bombardier in the smaller (1 seat and less) market.Embraer gained market share initially by offering aircraft for lower pricesthan Bombardier, then by using government subsidies to help win business.The government subsidies to Embraer were not unexpected since the companywas founded in 1969 by the Brazilian government to build military aircraft. While entry into the market by new organizations can bedifficult because of this, other companies, following Bombardier's ownlead, can enter the market through acquisitions. Nonetheless, Bombardier, which is already thedominant company in the small jet market, is well-positioned to takeadvantage of any upturn in this market because of its technologicalinnovation and its industry reputation. Carriers wereincreasingly changing from long runs to a hub and spoke system, and wereinterested in acquiring short-range aircraft that could offer greaterpassenger yields. "Integral Approach to Real-Time Passenger Information." International Railway Journal 44(Jun 2 4): 3 -31.Schlein, Martin. Whilethese tend to be larger aircraft, air carriers may well seek innovativeways of avoiding placing orders for new aircraft with so many available instorage ("Aircraft" n.p.). In addition, the competitive landscape changed as thenumber of viable providers of aircraft dwindled. These figures indicate that the company hasstruggled to realize similar increases in profits from substantialincreases in sales, and may indicate that the company has encounteredmanagement difficulties within the company, or external challenges, whichmay contribute to Bombardier's questionable recent performance. By 2 2, the international markets hadshifted significantly. While Bombardier was fending off the market challenge presented byEmbraer, Boeing entered the smaller jet market, as well, with its BoeingBusiness Jet (BBJ). This is a proprietary system that also interfaces with anelectronic supply chain management system designed to help the companymanage the thousands of suppliers who contribute to the aerospace and railproduct lines (Armbrect et al 32). In addition, thecompany has introduced key successful products--such as the monorail--inthe rail industry that may open up additional strong markets in the future. Since it already sells largeraircraft to many of the world's airlines, it already has relationships thatcan be leveraged to favor the smaller business jet market, as well. In addition, lower costs canbe realized when the aircraft are depreciated and when compared to last-minute commercial ticketing. In addition, concerns about air safety following the attacksof September 11, 2 1, have increased interest in high-speed railalternatives for domestic travel ("All Aboard," 4). This success was due largely to the market that Bombardier pursued.Rather than seeking to enter the large aircraft market that serves largecommercial air transport carriers such as American Airlines and Delta ontheir long runs, Bombardier recognized a niche that was traditionallyunderserved by the aircraft manufacturing industry. Inaddition, although the industry as a whole has been struggling, Boeing'ssize makes it a more likely survivor than Bombardier if a significantindustry shakeout occurs. Works Cited2 2 Annual Report. The system was built through apublic-private partnership, and Bombardier was chosen for the project inpart because of the technological innovation--including the efficiency ofits system--that it brought to the project (Stone 38). At the same time, the air transport industry--that is, the aircarriers themselves--also underwent significant change. J. Conclusion Bombardier has succeeded in transforming itself several times over thecourse of its history. The company has successfully built a niche market within that industry,but industry downturns in other segments have made Bombardier's traditionalniche vulnerable to competition from Boeing and others. Bombardier has been an innovator in both itsrail and aerospace product lines, and with the shift to shorter rangeaircraft, it is in a strong position to take advantage of possiblyexpanding market opportunities in the aerospace market. While some analysts expect aslight recovery in the short-term, companies such as Boeing and Airbus areexpected to expand their presence in segments where they have not hadstrong market share, and this makes Bombardier particularly vulnerable. Within the company, Bombardier hasintroduced an extensive intranet and knowledge database that enablesemployees around the world to have real-time access to customer and productinformation. Boeing and Airbus--the two largest aircraftmanufacturers--did not serve this market during the 199 s, and Bombardiergained access through its acquisition of several companies, includingLearJet. Passenger management haslong been a key factor in commercial aerospace, and is increasinglyimportant in ground transportation, as well. Bombardier Limitedmanufactured snow tractors and snowmobiles, while MLW-Worthingtonmanufactured locomotives. Although the WTO agreed with Bombardier, thesubsidies allegedly continued, and the Canadian government stepped in withsubsidies of its own to help Bombardier win key contracts with AirWisconsin and Northwest; this, in turn, prompted Brazil to file a complaintwith the WTO ("The Dogfight," 7 B). The United States now accounted for more than 53percent of the company's revenues, with Canada contributing down to eightpercent and Europe down to 28 percent. "Bombardier, Inc." Value Line Investment Survey, (Oct 3, 1997): 556.Stone, Thomas. Bombardier realized additional technological success when itintroduced the JetTrain locomotive in late 2 2. In 2 1, only the aerospace segmentcontributed more to profits than to revenues, indicating that this was themost profitable business unit in the company. The company, renamed Bombardier, Incorporated in1978, issued its initial public offering on Canadian stock exchanges in1981, and has continued to grow through acquisitions, including theacquisition of Learjet in 199 . Monorails do not impede streettraffic, and are useful for providing transportation within urban centers.Popular in resort areas and perhaps most closely identified with Disneylandand DisneyWorld, monorails are used to provide alternatives to busses,taxis and private vehicles within relatively small geographic areas.Bombardier provided the monorail system now in use in Las Vegas along thefamous Las Vegas strip. Bombardier has also set up an internal intranet that providesknowledge management to all employees, and key decision making informationto the company's management and sales staff. As a result, Bombardier is able to capitalize on itsacquisitions, build market share and dominate the industries in which itparticipates. In addition, the acquisition provided Bombardierwith access to technology--including monorails and switching equipment--which the company believes can give it greater access to markets around theworld that are seeking ecologically-friendly transportation systems("Annual Report" 1 ). Through the use of theintranet, the employees are able to determine which products are at whatstage of production, where bottlenecks might be likely to occur, and obtaindata that can assist in forming strategic direction. Introduction Bombardier initially made a name for itself in snowmobiles, but todayis one of the world's largest manufacturers of aircraft and rail cars. Encyclopedia of Global Industries, 3rd edition, Farmington Hills, MI: Gale Group, 2 3."All Aboard the Jet Train." Design Engineering (Nov 2 2): 4.Armbrect, Jr., F. Historic Financial Performance Bombardier's profits have kept pace with its sales in recent years,and have even outpaced the increase in sales during some of the past tenyears. Such aircraft are less expensive to operate, and easierto fill than larger aircraft. Bombardier has also become a leader in monorails, which are gaining inpopularity for urban mass-transit options. The company's primary weakness is the internal shift in focus in whichthe company is now engaged. Bombardier has worked closely with the Federal Railroad Administrationin developing the JetTrain, but the company may have problems selling theJetTrain to potentially the largest customer in the United States, Amtrak.This is because another of the company's products, the Acela, failed todeliver on time and had technical problems once it was delivered. Porter Analysis of Bombardier'S Key Markets As illustrated by the financial performance of the aerospace businessunit described above, Bombardier quickly learned how to succeed in this newmarket. Its smalleraircraft meet or exceed regulations for pollution and noise, and should aircarriers choose to replace commuter aircraft with new aircraft, Bombardierwould certainly be one of the vendors considered. Bombardier just completed a program to divestits recreational products line, a move that should help the company in thelong-term by allowing it to concentrate its resources on the core aerospaceand rail businesses, but this results in internal turmoil as resources areshifted within the organization. By 2 1, the company had reorganized so that it now had four majorbusiness segments, and the financial performance of these segments hadshifted significantly. The rest of the world'scontribution to revenues--this included Mexico in 2 2--remained relativelystable at 11 percent (Schlein 549). During the 199 s, the aerospace industry as a whole underwentsignificant change. The aerospace industry is the most troubled of the industry segmentsin which Bombardier participates. This was the smallcommercial aircraft market. Following the attacks of September 11,2 1, many aircraft orders were cancelled, and some air carriers--includingUnited Airlines--are struggling for survival. "Bombardier, Inc." Value Line Investment Survey, (Mar 28, 2 4): 549.Schlein, Martin. Sales and marketingprofessionals, for example, can determine which products have been mostsuccessful based on margin, revenue and market share, as well as geographyand types of customers who purchase the products. In 1997, Bombardier divided its operations into five groups:transportation (including mass transit production), motorized consumerproducts (including snowmobiles and personal watercraft), aerospace(including Canadair, Learjet and de Havilland), services and capital.During fiscal 1997, aerospace contributed 5 percent of revenues and 42percent of operating profit, motorized consumer products contributed 23percent of revenues and 35 percent of operating profit, and financialservices contributed seven percent of revenue and 12 percent of operatingprofit. M. This enables the companyto determine which lines of business offer the greatest potential reward inthe future (Armbrect et al 32). If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

Many of our Papers can be Downloaded From This Site!

PLEASE READ THIS, IT IS IMPORTANT!

Office hours are Monday through Friday, from 9 am to 5 pm (PST). You may place orders for custom research over the phone during office hours. E-mail requests can be made to our graduate and undergraduate department any time, and will be reviewed during office hours. You may also contact customer service any time through e-mail, and we will review your message during business hours. A great many papers can be downloaded right from this site, but not all of them. If you would like to know if a particular paper is downloadable, just look in the description for: "Available for Internet Download: Y" or "Available for Internet Download: N" If you wish to purchase a paper which is NOT available for immediate download, you will need to make other shipping arrangements. Also, please be aware that these orders are processed Monday through Friday from 9 am to 5 pm (PST). If you place your order after 4:45pm on Friday, it will not be processed until the following Monday morning. We charge $8 per page for all of our pre-written reports, plus shipping (and tax for California residents). However, the highest cost of any ONE report is $136, or 17 pages. Please, take a moment. Make sure you have chosen the report you want or need BEFORE you complete your order. If you are not sure, allow us to help you. We do not offer refunds or exchanges, so it is important for you to let us answer your questions during office hours. Reports which are e-mailed or downloaded are in Microsoft Word format. We are making more reports available for e-mail delivery faster than we can update our listings. Please call to check on the status of particular reports. There are many other shipping options which are listed on the Checkout page.