Thales Group: Strategic Alliances, PESTEL Analysis & Business Review

This report provides an analysis of Thales Group, a global leader in aerospace and defense, focusing on its strategic alliances, structure, and overall business strategy. It begins by explaining Thales' preference for contractual alliances over mergers, highlighting its major shareholder, the French government, and its significant role in designing defense and electronic systems for France. The report discusses Thales' merger with Finmeccanica and its acquisition of Guavus, illustrating its efforts to expand and remain competitive. It also touches upon the advantages of forming alliances, such as sharing costs and leveraging local partner advantages. The analysis references peer-reviewed academic articles and considers the origins, structure, and strategy of Thales Group, commenting on its strategic strengths and weaknesses.

Thales Strategic alliances
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7. Explanation of strategic alliances of Thales
Being a giant in the market for aerospace and military defense across the globe, Thales
has found itself in a position whereby it serves upcoming companies in the security and defense
sector. Thales has many connections but it is significant to note that most of Thales connections
have been more of alliances than mergers with different companies. Thales has always opted for
a contractual agreement as one of its strategy in forming alliances with these companies.
Details on one major shareholder (150 words)
The French government is one of the major shareholders of Thales Company. The French
government used to own about 31.1 percent of Thales until 2006 when the firm acquired
Alcatel’s Rail signalling solution and part of its space business. The result of the merger saw the
French government decrease its ownership of Thales to 27.1 percent while raising Alcatel’s share
to 21.66 percent. Due to its tight link with the French government, Thales has been one of the
sole companies that have been contracted to design electronic devices, naval and aerospace
weapons used by the French Army. Moreover the French government has involved Thales as the
major contractor to work on various electronic systems in various state owned departments
including energy, finance and the health sector.

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one merger (103 words)
Thales merger with Finmeccanica
Finmeccanica is a high-tech company based in Italy. It is majorly concerned with the
design and manufacture of military aircraft and helicopters. It also boasts in the developing of
space infrastructure and this includes satellites, aerostructures and defense electronics. The
company also has its tentacles in the transport and energy sector in the European market.
Finmeccanica has made this possible through well-established alliances with some of the big
players in the European and American manufacturing sector. The company, which has formed an
alliance with Thales, is also listed in the Milan stock exchange and has approximately 60,000
staff globally (Miltenburg, J.2005,89).
One acquisition (103 words)
Thales Acquisition of Guavus
To remain afloat in the competitive analytics market Thales acquired Guavus a U.S based
company. The company offers critical support for large communication services providers
around the globe. As a result, Thales acquired the company to cater for its growing need for a
connected global ecosystem. One of the main reason as to why Thales has opted for an alliance
with most companies is, for starters this option gives the company the advantage of sharing costs
or any operational risk with the local partner. In this arrangement, Thales also stands to benefit
from the home ground advantage its local partner may be enjoying. (Rugman, A.2002,48).

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References
Rugman, A.2002, International Business:Critical Perspectives on Business and Management,
Taylor & Francis.
Miltenburg, J.2005. Manufacturing strategy: how to formulate and implement a winning plan,
Productivity Press