Bombardier Transportation's operations and expansion in Switzerland

Bombardier Transportation Switzerland

History of Bombardier Inc.

According to its website, Bombardier, Inc. is a Canadian-based global transportation company, mainly focused on airplanes and rail transportation. Bombardier, in contrast to its current speedy, dynamic, and high-flying image did not begin as a rail and plane production facility. Instead, according to the "About us: History" section of its website, it began with a humble snowmobile: "Born in 1907, Joseph-Armand Bombardier builds his first "snow vehicle" at the ripe age of 15. His motivation? To help people travel across the snow-covered roads of rural Quebec in Canada. In 1937, J.-Armand achieves his first major commercial success with the launch of the seven-passenger B7 snowmobile" ("History: 1930s," Bombardier, 2009).

Until the 1970s, the company named after its founder, Bombardier, emphasized its innovative snow transportation product, but then the oil crisis forced it to diversify because of the high cost of fuel and the new demand for greener, more efficient mass transportation. Soon, it secured first contract to design Montreal's subway system ("History: 1970s," Bombardier, 2009). The 1980s saw further encroachments by the company into the airplane and rail market. The company today proudly identifies itself as a 'world class,' or luxury brand name in commercial and business jets, as well as a provider of the most technically advanced rail transportation equipment, systems and services. The company's main branch remains headquartered in Montreal but has divisions worldwide, including Switzerland.

History of Bombardier Transportation

In 2001, Bombardier relocated its rail transportation operations from Montreal, Canada, to Berlin, Germany. This was in response to the demand in Europe for extensive, fast rail networks. The rail division of Bombardier, Inc. is known as Bombardier Transportation and has a presence in more than 35 countries. It identifies itself as the world's rail equipment manufacturing and servicing industry. It offers "ingenious" rail solutions, according to the company's website, to both private and public enterprises ("About us: History," Bombardier, 2009).

Does the company have competition?

Other airlines that service the major European nations, such as Continental, Swiss Air, to name only a few, might pose competition for the company's domination of Europe's market for travel. Car travel may also pose a threat if gas prices continue to 'idle' or decline as the economy worsens.

Do its customers have special requirements?

In response to consumer demand and a shifting political climate, Bombardier has tried to incorporate sustainability into its business model to a greater degree. Providing rail travel in a way to reduce the planet's and the company's carbon footprint has become a core part of its mission ("Corporate responsibility," Bombardier, 2009)

Internal analysis

Current organization/structure

Bombardier is organized into two separate sections, rail and aerospace, both of which have a presence worldwide.

Current financial analysis

The company's financial performance is strong. On January 31, 2009 Bombardier "showed improvements in revenues, profitability and a robust cash position. Revenues increased by 13% to reach $19.7 billion" and Bombardier Transportation specifically "Bombardier Transportation's revenues totaled $9.8 billion, an increase of 25% over last fiscal year" ("Bombardier, Marketwire, 2009).

Most recent major decisions or changes

"In November 2008, Bombardier Transportation inaugurated a state-of-the-art railway vehicle manufacturing facility in India, the first to be wholly-owned by a global foreign company in this country. Closely working with its main customers to continue research on modular and flexible train platforms led Bombardier Transportation to sign a framework agreement with Deutsche Bahn AG (DB) in January 2009" ("Bombardier, Marketwire, 2009).

Strengths

Bombardier's sustainability emphasis in an increasingly 'green'-focused world has proved profitable. A new interest in rail transportation to reduce the carbon footprint across Europe has generated interest in the company and favorable press.

Opportunities

A newly powerful EU requires a continuing commitment to rail transportation. Worldwide, developing nations such as India and China need more extensive and complex rail systems -- this will bolster the company's market position overall, including in the Swiss market.

Weaknesses

The company's luxury and 'high tech' image could give it an overly exclusive image that could harm it in today's economy.

Threats

The credit crisis and high government deficits combined with fears of inflation could forestall major investments in high-tech rail projects.

Future business strategy options available for Bombardier Transportation Switzerland

Continuing to emphasize diversification, globalization and sustainability seems likely: "With the equivalent of 2.5 years worth of revenues already in backlog, the current recession should have a limited impact on Bombardier Transportation as the fundamentals of the industry remain strong. Bombardier Transportation, therefore, reaffirms its goal to improve its EBIT margin to 6% for fiscal 2010" ("Bombardier, Marketwire, 2009).

Your recommendations

Further 'greening' in its marketing campaign, deemphasizing its luxury options in favor of affordability and sustainability seems to be the most advisable way to continue its path for growth.

Conclusion

The company's durability makes it poised to succeed, provided Bombardier Transportation is not unduly hampered by the recent purchases of luxury items by the aerospace division of the company.

Lessons learned

Sustainability can lead to profitability and a recession does not mean an inevitable loss of profits.