Strategic Management | Assignment Solution

Running head: Strategic management
Strategic management

Strategic management
Table of Contents
Introduction.................................................................................................................................................3
Background of Thales..................................................................................................................................3
PESTLE analysis.........................................................................................................................................3
Two key competitors and five forces analysis.............................................................................................6
Business level strategies of Thales to protect vehicles division in Bendigo.................................................7
Thales cyber security division.....................................................................................................................8
Benefits of Thales strategic relationships....................................................................................................8
Conclusion...................................................................................................................................................8
Bibliography...............................................................................................................................................10
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Introduction
The main aim of this task is to explain and outline the business level strategies and pestle
analysis of Thales Company. It is a multinational Corporation that provides electronic product to
the customers in the international market. The key sectors that are served by firm include
Aerospace, Space, Ground transportation, Defence and security. In addition, pestle analysis,
porter five forces analysis and business level strategies have been explained in the task. More
detail of the task has been detailed below.
Background of Thales
Thales group is a French multinational Corporation that designs and produces electrical systems
and renders services for the defence, aerospace, security markets and transportation. The
company’s headquarter is located in La Defense and it is listed on the Eurnoext Paris stock. The
company is operating its business operations and activities across the France. It is major and
biggest player in the French high tech industry employing approx 34,000 employees at 70 sites in
seven regions. The revenue of the company was €14.885 billion (2016) and operating income
was €1.354 billion (2016). The organization operates and manages it activities in more than 56
countries across the world. The company provides world class technology to the consumers in
the marketplace. Thales is a key player in keeping the public safe and secure, assisting vital
infrastructure and protecting the national security interest of countries across the world
(Thalesgroup, 2018). The organizational structure of the company is unique and strong as it helps
to attract maximum number of clients in the international market. Patrice Caine is the CEO of the
firm. The company attracts and recruits some of the skilled and talented candidates who care
about the outcomes and accustomed to success. Chris Jenkins is the country director and chief
executive officer and Warwick Strachan is the chief financial officer of the company
(Thalesgroup, 2018). Along with this, Thales uses unique and dynamic business and corporate
level strategies to overcome the competitors in the international market (Mizzoni et al, 2014).
PESTLE analysis
Pestle analysis plays a significant role to measure the actions, policies and strategies of the
rivalries. This analysis helps to identify and analyze the opportunities and threats of the market.
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Before initiating the business activities and operations, Thales needs to analyze the environment
to gain competitive advantages in the international market (Tripes, Komarkova, Pirozek and
Dvorak, 2014).
Political factors: France is a developed country therefore the political environment of the
country is stable and strong. Thus, there is no political trouble, no political crisis and no conflict
in the market. This is an effective and good factor that can help the Thales to attract more clients
and investors in the marketplace. Along with this, the government of the country has no any
control on the culture and religious. Therefore, the company can easily initiate the business
activities in such country (Szydlowska, 2017).
Let’s talk about the Australia; the country is one of the biggest and important markets for MNC’s
in the Asia pacific region. The country maintains stable business environment and political
factors. Apart from this, the country uses skilled and experienced employees to conduct business
activities and operations successfully.
Now talk about the India, the country is one of the most powerful countries across the world. The
political factors contribute to maintain a stable political climate in the marketplace. On the other
hand, corruption can affect the business operations and activities of Thales adversely. Corruption
increases and enhances the cost of the business operations and also affects the foreign direct
investment.
Economic factors: The economic position of the France is strong and unique in the global
market. Talking to economic situation is connected to various factors such as level of inflation,
interest rate, and employment. GDP of the company has grown up from 0.3% in 2008 to 8% in
2009. The tax rate is approx 40% higher on the business community as compared to the rest of
the world (Hillson and Murray-Webster, 2017).
Talking about Australia, economic factors highly influence in such country. It is dominated by
the service sector. The economic factors such as inflation rate, employment rate, interest rate and
exchange rate could also influence the success and growth of Thales group in such country. On
the other hand, the country is facing recession, along with the unemployment rate approx 6% and
inflation rate of 2-3%.
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In the case of India, it has been analyzed that India is one of the top countries in the world for
doing business activities. The current corporate tax rate is 30% India. The GDP will grow by
7.0% in FY 19 which is estimated to enhance and increase to 7.4% by FY20. All these factors
can provide benefit to Thales group for maximizing the profitability and revenue.
Socio-cultural factors: One of the socio-cultural issues in France is of income and social class
disparity that may influence the business operations of Thales. It also increases crime rate where
youth are engaging in criminal activities and they destroying their future. Apart from this, culture
and values of the people also affect the Thales business in such country (Joshi, Singh Ubha, and
Sidhu, 2012).
In Australia, various social factors such as beliefs, custom, behavior and policies could also
influence the profitability of the firm. The social trends can direct impact on the demand for the
company’s product and services. The education level has been increased in the country. All these
factors can positively affect the growth of the firm in the country (Brewster, Mayrhofer and
Farndale, 2012).
Let’s talk about the India, the country provides huge market to the multinational companies for
initiating the business activities and operations. India is a multi lingual and multi religious
country that has a direct impact on the performance and productivity of the employees. Thus, it
can influence the progress of Thales group positively (Bochner, 2013).
Technology factors: Latest technology is used by the most of the companies in France.
Therefore, Thales group can take various advantages by initiating the business operations in such
country whereas in Australia, technological factors include automation, technology incentives,
and research and development activities. All these factors highly affect the progress of Thales in
such country. On the other hand, India is one of the most and effective technologically advanced
countries in the world. The country uses innovative and unique technologies for initiating the
new business activities. Therefore, Thales can increase its profitability by selling its product in
the Indian market (Lovelock, 2011).
Environmental factors: Water crisis is faced by France country in today’s era. The water
pollution issues are being faced by the country. If Thales group implement business operations in
France then it should focus on the environment of the country to gain competitive advantages in
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the global market. On the other hand, water scarcity is a main issue in Australia that could have
direct impacted on the efficiency and productivity of the firm. Before initiating the business
operations in Australia, Thales should analyze the environmental factors to stay in the
competitive market. If Thales operates business in India then various environmental issues such
as water pollution, floods and air pollution are faced by the firm (Sellner et al, 2011).
Legal factors: The main law enforcement body in France includes CRS, and national police.
The national police take care of local crime control and it also focuses on the activities of the
companies. Thus, it provides a great opportunity to the company to initiate the business actions
in such country. On the other hand, it shall be noted that legal system of Australia is based on
the fundamental belief in the rule of law, regulations, norms and the independence of judiciary.
Thus, the firm can take ample of benefits in such country. India is a well known and famous
destination for foreign direct investment. Therefore, the company can take various benefits in
such country by considering the legal factors.
Two key competitors and five forces analysis
The main competitors of the company include Northrop Grumman, and Boeing Company that
affect the profitability and revenue of the firm adversely. The organization needs to focus on the
strategies and policies of the rivalries to increase and enhance the sale of the firm (E. Dobbs,
2014). The porter five forces analysis is done by the company to stand out against the
competitors in the marketplace. The porter five forces analysis has been detailed below.
Bargaining power of suppliers: Thales group is highly dependent on the suppliers to earn
revenue and returns in the marketplace. Most of its suppliers are technology companies that
supply raw material and technology for electronic product and service. The bargaining power of
suppliers is high in the marketplace.
Bargaining power of customers: The main aim of the company is to deliver value to the
consumers and other stakeholders. The higher bargaining power of customer is one of the biggest
strengths for Thales group that helps to destroy the competitors such as Boeing and Northrop
Grumman (David, 2011).
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Threats of substitutes: The threat of substitutes is low in the marketplace because there are few
substitutes for electronic products and services. There are few competitors who can product
similar electronic products at appropriate prices (Rothaermel, 2015).
Threats of new entrants: The threat of new entrants is high in the global market. If the
company wants to make a good image in the minds of the consumers then it needs to invest in
the technological innovation.
Level of competitive rivalry in the industry: It shall be noted that level of competitive rivalry
is high in this industry. This is just because every brand is trying to push the line of quality and
innovation higher. The major players include Boeing and Northrop Grumman and furthermore, it
has been noted that Boeing and Northrop Grumman are market leaders with the largest market
share (Porter, 2011).
Business level strategies of Thales to protect vehicles division in Bendigo
The company can use ample of business strategies to protect the vehicles division in the
Bendigo. By using business level strategies, the company has been able to reach its maximum
level of outputs in the international market. One of the significant strategies that used by the
company is strategic alliance (Covin and Slevin, 2017). This strategy helps the company to
maximize the returns and outcomes in the competitive market. Under this strategy, Thales makes
an agreement with other parties to attain the desired goals and objectives (Harris, Kuivalainen
and Stoyanova, 2012). By using this strategy, the organization has been able to grow and survive
its business activities and actions globally.
Advantages and disadvantages this strategy has been detailed below.
Advantages Disadvantages
 Knowledge sharing is one of the
significant advantages of strategic
alliance strategy in small regional town.
 Economies of scale and strategic
objectives.
 It also reduces the cost of the firm.
 Initially, it increases the cost of the
company, it the company makes the
agreement with other party.
 Along with this, the company has to
share their resources and capital.
 Lack of trust is main disadvantage of
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strategic alliance.
 It also hampers the goodwill of the
firm.
Thales cyber security division
Thales cyber security division plays an empirical role to attract and retain talented and skilled
employees in all over the world. By using cyber security division, Thales can gain various
advantages with the help of effective team force within the organization. Recruitment and
selection can be done online with the help of cyber security and further, it also increases the
productivity of the firm (Gagnon and Collinson, 2014). It saves the time and resources of the
firm. Along with this, the organization can provide online training and learning to employees to
teach them about the new process and managerial changes within the organization. It also helps
in protecting the data and information of the firm as well as employees (Ayerbe et al, 2014).
Benefits of Thales strategic relationships
There are enormous benefits of Thales strategic relationships in the global market. If the
company makes an agreement with other partners then it can take various advantages in the
global market. If the company makes an agreement with other party, it reduces the cost of capital
for both the companies (Gaiardelli et al, 2014). As a result, it increases return on capital and
furthermore, it also increases earning per share. In this way, it provides wide range of benefits to
the shareholders. On other hand, if the company enters into merger and acquisition then it helps
to control over the marketplace. It also helps in increasing value efficiencies of the company. By
maintaining relationship with partners, the organization has been able to reduce the risks and
challenges of the market (Anninos and Chytiris, 2012).
Conclusion
On the above mentioned analysis, it has been noted that Thales is one of the biggest companies
who provides electronic equipments, software and services to the clients in the international
market. The above mentioned analysis shows that how the company provides effective solutions
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to make the right and effective decisions at the right time. The paper explains the Pestle analysis
and business level strategies of Thales in the global market.
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