Strategic Management of Thales: A Comprehensive Analysis

This report offers a comprehensive analysis of Thales' strategic management, beginning with an overview of the company's background, including its founding, global presence, and key business areas such as aerospace, defense, and security. It then applies strategic analysis tools, starting with a PESTEL analysis, to assess the political, economic, social, technological, environmental, and legal factors influencing Thales' operations. The report proceeds to evaluate the competitive landscape using Porter's Five Forces, examining the threats of new entrants, bargaining power of suppliers and buyers, threat of substitutes, and competitive rivalry for both Thales' AE systems and Northrop Grumman. Furthermore, the report provides a business-level strategic analysis, focusing on Thales' protect vehicle division and cyber security division, highlighting key strategies, objectives, and the company's approach to cyber security, including the use of Big Data and Artificial Intelligence. The analysis emphasizes Thales' efforts to mitigate risks, foster innovation, and maintain a competitive edge within the industry.

Running head: STRATEGIC MANAGEMENT
Strategic management of Thales
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Table of contents
Introduction................................................................................................................................2
Explanation of Thales’ background...........................................................................................2
PESTEL......................................................................................................................................3
Porter’s five forces of AE systems.............................................................................................4
Porter’s Five Forces of Northrop Grumman..............................................................................6
Business Level Strategic Analysis (cyber security division).....................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

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Introduction
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.
Explanation of Thales’ background
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.

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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).
PESTEL
Political  Political instability
 Political ideology
Economic  Depreciation of currency
 Varying budget
Social  Smart cities
 Increased demands of flight services
in developing countries
 Recruitment of strong and flexible
workforce
Technological  Innovative design of aircrafts
Legal  Quality management regulations
 Property related rights
Environment  Renewable sources of energy
 Social innovation ecosystem
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.
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

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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:
Porter’s five forces of AE systems
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

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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.
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

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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.
Porter’s Five Forces of Northrop Grumman
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.

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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).
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

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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.
Business Level Strategic Analysis (cyber security division)
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

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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.

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