Strategic Management Of Thales

Explanation of Thales’ background

Discuss about the Strategic Management of Thales.

Management is crucial in terms of systematizing the business activities. Exposure of strategic approach towards this management proves beneficial in terms of completing the tasks in an efficient and effective manner. Along with this, strategies improve the focus of the personnel towards the business activities. This improvement is necessary in terms of extracting collaborative output from the employees. Proper formation of the strategies helps in identifying the areas, which needs improvement (Hill, Jones and Schilling 2014). This assignment peeks into the strategic management of the Thales. Analytical tools like PESTEL, Porter’s Five Forces and business level strategic analysis is included for assessing the current strategic environment of the company.

Founded on 6 December 2000, Thales is a company, which has its outlets in more than 56 countries. Presence of 64000 skilled and efficient employees results in the efficient execution of the business activities. The company operates in Aerospace, Space, Ground Transportation, Defence and Security Industry. As a matter of specification, the company deals with tactical radios, remote systems, radar, mobility services and aerospace electronics (Thalesgroup.com 2018). According to the annual report of 2016, the sales revenue was 14.885 billion euros. The annual report also revealed the operating income as 1.354 billion euros and the net income was 946 million euros.

Strategic planning helped the company to achieve sustainable growth. Typical evidence of this lies in the figures produced in the annual report of 2017. 31.9 billion euros is reserved for the order bookings. In case of the order intakes, the figure is 14.9 billion euros.

The research and development team strives to bring innovation within the services for the achievement of large-scale customer satisfaction. This is done by adhering to the values of integrity, respect, honesty.  Use of high quality technology is assistance towards attracting foreign clients to the products and services (Thalesgroup.com 2018).

Table: PESTEL analysis of Thales

Political instabilities put the security of the people at stake. Engaging in international defense has enabled companies like Thales to form strategic alliance for efficient execution of the import and export activities. This is because of the privatization of the supplies. The emergence of Donald Trump projects a rise in the number of political parties and ideas. Mention can be made of France and Germany, where there was 41% loss in mergers and acquisitions in 2016 (Thalesgroup.com 2018). This loss has heavily affected the import and export activities. Foreign deals and investments can assure the people that their sentiments would be duly protected.

PESTEL

Imposing restrictions on the spending power of markets like USA, Europe has compelled them to search for new targets. This might be a problem in supplying the electronic systems to the clients and customers. Restrictions on the spending power are a disruption in the stable communications regarding the adoption of latest and modern data systems within the market of France. Equity in the US markets have enhanced the purchasing capability of the people. In this, reduction of taxes is assistance for the brands in terms of enhancing the sales revenue and profit margin. Movement of US dollar eased the production of quality materials, especially in case of the developing countries (Wheelen et al. 2017). Thales can utilize this opportunity through investments in these emerging markets.

Adding to the existent workforce, results in the production of innovative designs of the aircrafts. Testing the quality, functionality and feasibility of the designed aircrafts help the personnel in preventing the accidents. Herein lays the appropriateness of the accidental policies for the customers as well as the personnel in charge of the operations. Alliance with the research and development teams, from the neighbouring countries like France or Australia, aids Thales, in bringing innovation in the ecosystem (Saeidi et al. 2015). This is through the means of adopting renewable sources of energy for operating the flights.

Identification of the key competitors

Companies like BAE systems and Northrop Grumman gives tough competition to Thales. The following is a Porter’s Five Forces, which reflects the positioning of these brands within the market:

Threat of new entrants

The services of Lockheed Martin is a threat for BAE systems in terms of supplying quality aircrafts to the clients and the customers. Low price strategy aggravates the complexities for BAE systems PLC regarding adding to the customer base. Reducing the operational and flight charges can act assistance in luring foreign clients and customers (Baesystems.com 2018).

Bargaining power of the suppliers

Indulging in partnership with the suppliers in demand decreases the profit margin, which acts as an opportunity for companies like BAE systems PLC to accumulate greater share in the market. Negotiations enhance the power of the suppliers to extract higher prices for the supplies. High bargaining power reduces the profitability of the company; therefore, the personnel need to maintain rationality in dealing with the suppliers.

Bargaining Power of the buyers

Offering best schemes and offers on the services enhances the bargaining power of the buyers. These schemes and offers pressurizes the capability of BAE System PLC in terms of enhancing the profitability (Baesystems.com 2018). Smaller and powerful customer base increases the bargaining power of the customers. Rationality in the offers, schemes and discounts enables them to exercise their bargaining power in an efficient and effective manner.

Identification of the key competitors

Threat of substitutes

The service oriented nature of business helps BAE Systems PLC to tackle the threat of substitutes. Using services like Dropbox and Google Drive enhances the awareness of the personnel about storage of the hardware drives. These devices are also assistance in terms of gaining an insight into the substitutes, where these drives can be stored. The threat of substitutes for BAE Systems PLC is high, as it offers high value proposition, flexible for altering the business scenario (Baesystems.com 2018).

Competitive rivalry

Competition exists between the company and the industry. The competitive rivalry is very high. One of the striking points is that intensified competition does not affect the productivity of the organization. Adhering to the competitive policies helps BAE System PLC to indulge in fair competition with the contemporary brands.

Threat of New Entrants

Innovative pricing strategy by the brands like Boeing, Raytheon obstructs the efficiency in the execution of the business activities in case of Northrop Grumman. Selling the aircrafts and the defense at low price to the clients and the customers obstructs the thought process of the personnel (Northropgrumman.com 2018).

Bargaining power of the suppliers

Experimenting with the designs of the aircrafts and the defense machines helps the personnel of Northrop Grumman to gain an insight into the approach of the customers. Financial experiments help in adding to the stock of resources, which assists in averting inadequacies. Involvement of the third parties can act as evaluation for the company. On the other hand, the company can involve the third parties in the business process. This is because they have less bargaining powers, which assists the personnel to maintain the efficiency in the business activities (Northropgrumman.com 2018).

Bargaining power of the buyers

Streamlining the sales and the production process has added to the stock of customers for Northrop Grumman. Bringing innovation within the newly manufactured aircrafts and the defense machines acts as an agent in enhancing the bargaining power of the customers.

Threat of substitutes

Creation of innovative products by the contemporary brands is a threat for Northrop Grumman in terms of luring the customers. This threat is high as it offers high value proposition, altering the workplace scenario. Quality management is important in terms of preventing substitutes within the products and services. Increasing the switching opportunities for the customers is assistance in terms of handling the threat of substitutes in the manufactured aircrafts and defense systems (Northropgrumman.com 2018).

Porter’s five forces of AE systems

Competition rivalry

The competition between Northrop Grumman and the industry is intense, which has decreased the prices. This reduction, in turn, has added to the demands of the customers. Coming up with insurances for the aircrafts and the defense systems would act as innovation, providing the opportunity to the company to attract the clients and the customers. Adherence and compliance to the competitive policies reflects the transparency in the deals, trades and transactions (Northropgrumman.com 2018).

Business Level Strategic Analysis (Protect vehicle division)

Thales indulges in alliance with Bendigo for developing plans and schemes related to vehicular security. Within the plans, mapping is done for tracking the areas, which might result in accidents. Reader’s Guide was developed for making the clients aware of the planning schemes. Instructions were levied in terms of obtaining advice from the planner before undertaking any action. This is in terms of averting any unwanted instances. The plans have different sections, which caters to the different aspects of security. Within this, one of the objectives is to establish new runways and business parks, which would increase the viability of the airports (Delwp.vic.gov.au 2018). For achieving the objective, strategy of constructing runways in the north-south direction of the existing was developed. As a result of this, the larger aircrafts attained flexibility in their movements. One of the major benefits of the runways was luring the attention of the foreign investors. Apart from this, the facilitation of business parks enhanced the compatibility of the staffs in terms of achieving expansion.

Along with this, planning were also made for increasing the freight movement within the city. Here, focus was on mitigating the impact on the nearby residents. This acted as an assurance for the customers in terms of the efficient quality of the business and services (Delwp.vic.gov.au 2018). Checking the connections of the freights links was assistance for the personnel in terms of generating hassle free flight services.

ThalesMediadays acted as a turning point for Thales in terms of mitigating the instances of cyber security. The event formed a keystone in highlighting the position of the group in the domain of cybersecurity. The clients made an investment in billion euros for adopting the latest technologies- Connectivity, Big Data, Artificial Intelligence and Cybersecurity. The speakers claimed their emergence as a “digital innovation lab and a leader” in an ambience of cybersecurity.

Digital transformation was the aim with which Thales organized the event. According to the statements of the CEO, safety and security is crucial for living by the ambitions, which the staffs have identified for their professional development (Thalesgroup.com 2018). He is concerned about the vulnerability, which is related with the radical transformations in the digital field. For tackling the cyber crimes, the personnel developed strategies. Within the strategies, cyber training attains a prime position. The staffs were trained about detecting the cyber attacks well in advance. This was done through the means of cloud encryption and data protection. Protection of the airports was the focus in terms of achieving sustainable development. Mention needs to be made of Big Data and Artifical Intelligence, which helped in cybersecuring the air traffic management, hacking of the connected aircrafts, tracking the movement of the aircrafts through satellites (Thalesgroup.com 2018).

Conclusion

This assignment emerges successful in providing an insight into strategic management. Strategies act assistance for the companies and organizations in terms of systematizing the activities according to their priority. Within this, consciousness towards the identified and the specified objectives helps in the achievement of positive outcomes. In this assignment, Thales Group has been taken as an example for enlivening the perspectives of the personnel. This is in terms of adopting efficient and effective strategic management techniques. Business analysis regarding the vehicular protection and cyber security indicates the approach towards the needs, demands and requirements of the customers. PESTEL analysis and Porter’s five forces indicates the capability of Thales in terms of securing their position within the competitive ambience of the market.

References

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