BOMBARDIER TRANSPORTATION AND THE ADTRANZ ACQUISITION Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

BOMBARDIER TRANSPORTATION AND THE ADTRANZ ACQUISITION Case Solution

Bombardier Limited right from the start when company was founded by Joseph-Armand Bombardier in 1921, in the shape of small facility that produced B7’s vehicle that made it easy to travel in the snow until 1969, when this company went public.Bombardier Limited managed to increase its production capacity by entering into number of different contracts with local Canadian companies and with Canadian Military during the World War Two. After the death of Joseph-Armand Bombardier in 1964, the company affairs were transferred to his son Germain Bombardier who in turn passed on the presidency to his brother in law Laurent Beaudion, under his leadership the company gained significant growth in its revenue and market shares from 1960 to 1970.The market grew, especially the North American market for snow automobiles;under Beaudoin’s leadership, the company prospered and entered in to the lucrative and profitable US market. In 1970, the company acquired an Australian based Lohnerwarke Company whose one subsidiary provided key components of snow automobile engines, but that was not enough, because soon the World faced the energy crisis of mid 1970’s and it put the brakes on the snowmobile industry. That was the rationale behind the expansion in the transportation business.

The leadership decided after energy crisis that there is a need to reduce cyclical risk to ensure long-term survival of the company and that there is a need of business diversification into businesses, which are not related with snow automobile.

After the acquisition of Transit America in 1988 and Cocarril the Mexican top rail manufacturer, the company established itself as one of leading supplier of rail cars and gained international reputation.

The factors that motivated the leadership to further expand its transport business was to achieve greater market share because normally, Companies that assess the high growth in the market not follow organic growth because it is slow and over the passage of time, the company may drift away from the changes in the external environment and lose competitive edge. The reason behind expansion in the transportation business was to establish itself in the market as a leader.

Secondly, it acquired companies and expanded itself into different businesses like aerospace and capital.However, they have competencies in the case of transportation because this was the first business after their snow automobile business where they added value to the business by simply using their competencies.

The regulations also played their part well when they decided to shift their focus from automobile to public transport, which created a lucrative market for BBD and they further expanded into this business. Furthermore, the reason behind the expansion was that the BT has expertise in assembling the rail cars, but it lacked necessary skills in propulsion and control system. When Bombardier tried to further expand its operations in the transportation industry,the industry at that time was dealing in six distant segments and in order to fully control all segments, Bombardier decided to expand into areas where there is need to acquire necessary skill in order to stabilize the future growth of the company. Lastly, the reason behind expansion was the attractiveness of the European rail market that led BT to further expand into transportation business/

WHAT EXPANSION OPTIONS WERE AVAILABLE AND WHY DID THEY DECIDE ON AN ACQUISITION?

Generally, companies pursue growth strategies of acquisition in order to gain early competitive edge in the market.It appears that this is the case of BT and it is rationale behind their choice of acquisition strategy.In the past years, they have managed to acquire number of different companies that have added value to the BT portfolio.................

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BOMBARDIER TRANSPORTATION AND THE ADTRANZ ACQUISITION Harvard Case Solution & Analysis