Strategic Management for Thales: PESTEL and Five Force Analysis

This report provides a strategic management analysis for Thales, including PESTEL and Five Force analysis. It also includes a business level strategic analysis of Thales' protected vehicles and cyber-security divisions, as well as an explanation of the benefits of Thales' strategic relationships.

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Name of the student
Name of the university
Author note

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Executive summary
The report is aimed at understanding the different characteristics of the company, Thales, and the
manner in which it can take steps in order to reach out their offerings to the nations where it
operates. The report enumerates the pestle analysis, which helps in determining the external
factors that affects the growth of the organization in the international markets. Therefore, the
report helps in understanding the steps that are required to be taken by the organization for
bringing in improvements.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Thales' background......................................................................................................................3
3. PESTEL analysis of Thales operating in three countries............................................................4
4. Five Force analysis and two competitors.....................................................................................8
5. Business Level Strategic analysis of Thales protected vehicles division (Bendigo).................10
6. A Business Level Strategic analysis of Thales cyber-security division....................................11
6.1 Prospects of the field...........................................................................................................11
6.2 Remuneration.......................................................................................................................11
6.3 Technological innovations and the issue of patents............................................................12
7. An explanation of the benefits of Thales strategic relationships...............................................12
8. Conclusion.................................................................................................................................13
References......................................................................................................................................14

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1. Introduction
The strategic management that is being taken by the organizations helps in determining
the decisions that are being undertaken by the organizations in order to bring in improvements in
the functioning and the structure of the same in the market. The major aspects of the change that
is being undertaken by the organizations are based on the objective of sustaining in the different
and competitive market situations (Onyeji, Bazilian and Bronk 2014). The strategies that are
undertaken by the organizations are based on their requirement of adhering to the objectives of
the organization to bring in the change in the structure and the functioning of the business in the
markets. The major aspects of the change are based on the understanding of the situation of the
organization and the different trends that is affecting the preferences of the consumers. It is also
based on the advancements in the technology that the organization is required to undertake
strategic decisions in order to sustain themselves in the market.
The major purpose of the report is to understand the strategic decisions that are being
taken by Thales in order to sustain themselves in the competitive market. On the other hand, it
also helps in determining the chief success factors of the organization while operating in three
different nations.
2. Thales' background
The Thales Group is a French multinational corporation that designs electrical systems
as per the needs of the consumers in the international markets. The group also extends out its
services to the development of the aerospace, defense and the transportation companies
throughout the world (Thalesgroup 2018). The company retained its headquarters in La Défense,

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which is considered as the business district located at Paris (Thalesgroup 2018). The company is
partially owned by the French government and operates in around 56 countries of the world.
According to a survey undertaken in the year 2016, the revenue of the company was around
€14.885 billion (Thalesgroup 2018). The operating income of the company is estimated to be
€1.354 billion and the net income being €946 million (Thalesgroup 2018). It has helped in the
understanding of the growth of the organization in the international markets through the
activities that are undertaken by the same. The expansion of the business is also portrayed
through the enumeration of the number of employees that are involved in the processes that are
being undertaken by the organization.
3. PESTEL analysis of Thales operating in three countries
FRANCE UNITED KINGDOM AUSTRALIA
Political Political stability has
helped the organization
to undertake the smooth
functioning of the
processes (Cherdantseva
et al. 2016)
The effect of Brexit and
the currency volatility
has affected the
functioning of the
organization in the UK
markets (Wadsworth et
al. 2016)
Positive tax policies
and lower trade
restrictions has helped
the organization in
planning outs its
functioning on a
smooth and
uninterrupted basis
Economic Highly competitive
market of the nation has
helped the organization
to emphasize more on
the innovations in order
The cost of involving
the labor force has
affected the growth of
the organization in the
The economic stability
of the nation has
helped in the growth of
the organization in the
Australian markets

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to sustain in the market UK markets. (Quan, Heidemann and
Pradkin 2013).
Social The high education
level of the people has
helped in determining
the different aspects of
the change on which the
company relies in order
to bring in the change in
the structure and the
functioning of the
business in the markets.
The young population
of the nation and their
adaptation to the new
technologies has made it
challenging for the
organization in order to
function in the
economy. The company
is required to take
continuous steps in
order to develop and
innovate new processes
in order to suffice the
needs of the young
population of UK.
The cultural diversity
of the nation has
affected the
functioning of the
organization while
analyzing the needs of
the people based on
their preferences and
the technological
advancements of the
region (Sommestad
and Hallberg 2012).
Technological The risks that are being
faced by the
organization while
functioning in the nation
is based on the
development of the new
technologies, which
might be interrupted
through the little
The governmental
regulations of the nation
have affected the
growth of the
organization in the
market (Choucri,
Madnick and Ferwerda
2014). The regulations
relating to the use of
The increase in the
development costs and
the taxes that are
levied by the state
governments for
undertaking the
different projects has
affected the growth of
the organization in the

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resources that are made
available to the nation.
technology and the risks
associated with the
same has affected the
smooth functioning of
the organization in the
respective market,
which has affected the
growth of the same in
the nation.
Australian market.
Environmental The environmental
factors that are being
faced by the
organization while
operating in the French
market is based on the
frequent change in the
weather conditions that
affects the smooth
functioning of the
processes undertaken by
the organization
(Baden-Fuller and
Haefliger 2013). The
different aspect of the
change that is being
undertaken by the
The organization is
required to undertake
the sustainable options
in order to function as
per the regulations of
the nation. Therefore, it
has affected the smooth
functioning of the
organization, as there
might be some affect of
the activities on the
environment, which is
not permitted in the
nation.
The environmental
protection acts of the
nation has restricted
the functioning of the
organization which
might cause ill effects
on the trees based on
the deforestation that is
being undertaken by
the organization in
order to establish a
warehouse for the
organization. It has
affected the smooth
functioning of the
organization in the

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organization is based on
the understanding of the
factors that affects the
frequent changes in the
weather conditions.
Australian markets.
Legal The revised quality
management regulations
of the nation has helped
the organization in
monitoring over the
processes and thereby
undertake steps in order
to maintain the quality
of the security products
and services
(Schneiderman 2012).
The legislations and the
rules of the nation being
unstable in nature have
affected the growth of
the organization in the
UK markets. Brexit has
affected the free
functioning of the
organization as the
terms and the conditions
for undertaking the
business activities are
made diverse from that
of the nations in the EU.
It has affected the free
functioning of the
organization in the
markets.
The imposition of the
taxes by the
government has
affected the smooth
functioning of the
organization in the
market (West and
Bogers 2014). The
growth of the
organization in the
Australian market is
affected through the
imposition of the
various taxes. It has
resulted to the
imperative growth of
the organization in the
Australian markets.

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The Boeing Company
BAE Systems
Buyer power
1. Customers
from around 56
nations
2. Same industry
3. Variety of
products
New entrants
CASIC is an initiative by the Chinese in the development
of the security systems.
Supplier power
1. Huge number
of suppliers
2. Global
functioning of
the systems
Threat of substitutes
Substitute products from the Chinese markets often
affect the functioning of the organization in the market
(Bleda and Del Rio 2013).
4. Five Force analysis and two competitors

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Low price
High price
High qualityLow quality
The Boeing Company
BAE Systems
Thales
CASIC
5. Business Level Strategic analysis of Thales protected vehicles division (Bendigo)
Target scope Advantage
Low cost Product uniqueness
Broad Cost leadership strategy that is
being undertaken by the
organization is facilitated through
the functioning of the same in the
small regional town (Johnstone et
al. 2012). It has helped the
organization in reducing the cost
of operations that are undertaken
by the organization.
The Bendigo that is being created
by the organization is unique and
therefore, the differentiation
strategy is being established by
the organization through the
undertaking of the change in the
systems and the functioning of
the business (Hair et al. 2012).
The small regional town might
help the company in retaining the
secrecy of its production and the
whereabouts of the product,
which will help the organization
in gaining a competitive
advantage in the market.
Narrow The major focus of the
organization is based on the
understanding of the different
aspects of the product costing
which determines the demand for
the product. The minimization of
The differentiation of the
products might help the
organization in gaining over a
competitive advantage (Boons et
al. 2013). However, there is an
uncertainty relating to the

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the cost of operations has helped
in determining the change in the
systems and the functioning of
the organization in the
international markets.
exposure of the product to the
external world away from the
small regional town where the
product is being developed. It
will be affecting the availability
of the product in the markets.
6. A Business Level Strategic analysis of Thales cyber-security division
The strategy that the organization might undertake in order to attract the best talents to
the cyber-security divisions of the organization is being enumerated in this section of the report.
It will helps in the understanding of the different perspectives of the change in the structure and
eth functioning of the business in order to retain and recruit the skilled workforce.
6.1 Prospects of the field
The determination of the prospects of the field of action and the job roles helps in making
the candidates aware of the importance of the job role. The major aspects of the strategy is based
on making the candidates aware of the progress and the growth of their career while working in
the cyber security division of the organization.
6.2 Remuneration
The increased remuneration for the job role will be helping the organization to attract the
attention of the potential candidates and thereby retain the skilled workforce, which will be
helping the organization to undertake the smooth functioning of the business as per the needs of
the market (Wu 2012).

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6.3 Technological innovations and the issue of patents
The issue of the patents will be helping the organization to attract the attention of the
eligible candidates and providing them with the opportunity of practicing their expertise in the
systems. The technological innovations that are being undertaken by the organization are
supported through the enthusiasm of the candidates and the skill of the same. Therefore, the
company might take steps to develop the different criteria in order to facilitate the functioning of
the skilled workforce and their retention in the organization.
7. An explanation of the benefits of Thales strategic relationships
The strategic relationships that the organization undertakes help them in promoting their
products in the different nations. The company designs equipments and tools for defense and the
international security. Therefore, the strategic relationship that the company holds with the other
companies located in the different regions has helped the company in its growth through the
support in the technological factors and the providence of the raw materials.
Thales acquired GUAVUS, which was regarded to be a pioneer of the Big Data Analytic
has helped the organization in developing the technologies that are undertaken by the
organization (Binz, Truffer and Coenen 2014). The proper understanding of the change that is
being undertaken by the organization is based on the technological advancement, which has
helped in the development of the organization in the market.
On the other hand, the major shareholder of the company is French State has helped in
undertaking the progress in the systems and the functioning of the business in the markets. The
shareholder provides funds for the growth of the organization’s projects, which helps in

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maintaining the different aspects of the change in the structure and the functioning of the
organization in the market.
8. Conclusion
Therefore, from the above analysis it can be stated that the identification of the different
aspects of the strategies that are implemented by Thales in order to improve and sustain their
market positioning. The report enumerates the PESTEL, which clearly portrays the functioning
of the organization in Australia, UK and France. It has helped in determining the hindrances that
the organization is facing while operating in the international markets. On the other hand, the
enumeration of the advantages and the disadvantages of the Bendigo help in determining the
changes that are required to be undertaken by the organization.

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References
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Binz, C., Truffer, B. and Coenen, L., 2014. Why space matters in technological innovation
systems—Mapping global knowledge dynamics of membrane bioreactor technology. Research
Policy, 43(1), pp.138-155.
Bleda, M. and Del Rio, P., 2013. The market failure and the systemic failure rationales in
technological innovation systems. Research policy, 42(5), pp.1039-1052.
Boons, F., Montalvo, C., Quist, J. and Wagner, M., 2013. Sustainable innovation, business
models and economic performance: an overview. Journal of Cleaner Production, 45, pp.1-8.
Cherdantseva, Y., Burnap, P., Blyth, A., Eden, P., Jones, K., Soulsby, H. and Stoddart, K., 2016.
A review of cyber security risk assessment methods for SCADA systems. Computers &
security, 56, pp.1-27.
Choucri, N., Madnick, S. and Ferwerda, J., 2014. Institutions for cyber security: International
responses and global imperatives. Information Technology for Development, 20(2), pp.96-121.
Hair, J.F., Sarstedt, M., Pieper, T.M. and Ringle, C.M., 2012. The use of partial least squares
structural equation modeling in strategic management research: a review of past practices and
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Johnstone, N., Haščič, I., Poirier, J., Hemar, M. and Michel, C., 2012. Environmental policy
stringency and technological innovation: evidence from survey data and patent counts. Applied
Economics, 44(17), pp.2157-2170.
Onyeji, I., Bazilian, M. and Bronk, C., 2014. Cyber security and critical energy
infrastructure. The Electricity Journal, 27(2), pp.52-60.
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[Special reports]. IEEE Signal Processing Magazine, 29(1), pp.8-11.
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https://www.thalesgroup.com/en [Accessed 6 Apr. 2018].
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Immigration on the UK. CEP Brexit Analysis, (5), pp.34-53.
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