Cambridge Aerospace. Missile Consultancy

Transcription

1 Cambridge Aerospace Missile Consultancy

2 Missile Consultants Names Ibrahim Koeycue Michael Duignan Roles Global Strategy Planning Consultant Macro Environmental Analyst Stéphanie Masschelein Sandra Selmanovic Lewis Walsh Mariann Raboczki Micro Strategy Consultant Operations Consultant Business Development Consultant Market Analyst

3 Globalisation Influences Ibrahim Koeycue

4 YIP, G.S., Total Global Strategy

5 Climate Change Several new regulations and laws Cambridge Aerospace has created a new committee Responsible for its environment Climate Change Government influences Global Strategies Cost Advantage Global Competition YIP, G.S., Total Global Strategy

6 Government Influences Fewer influences from UK government Exchange rates Barríers on trade Climate Change Government influences Global Strategies Cost Advantage Global Competition YIP, G.S., Total Global Strategy

7 Global Competition Very high competition Increasing number of competitors worldwide Global economic turbulence Climate Change Government influences Global Strategies Cost Advantage Global Competition YIP, G.S., Total Global Strategy

8 Cost Advantages Fast changing Technology High development costs Global economic turbulence Climate Change Government influences Global Strategies Cost Advantage Global Competition YIP, G.S., Total Global Strategy

9 PEST PESTEL F.E-Pest Analysis a macro-environmental analysis Michael Duignan

10 Aerospace macro-environment The Global Aerospace Industry can be defined as 3 main areas; Commercial Aviation Military Contracts and Worldwide Defence Space Exploration

11 Adapted PEST model F.E-Pest a new macro analysis tool for the Aerospace industry M.Duignan 2008 Source: adapted PESTEL model (Johnson et al, 2006, p54) F.E Pest, Michael Duignan, 2008

12 F.E-Pest Political Issues M.Duignan 2008 Political Issues; Governmental Policy: Doubling Air Passenger Tax 2006 Increasing World Military and Defence Budgets (US, China and Russia)

13 International Military Budget Statistics US Military Spending World Military Spending, 2008 PRC Defence Expediture

14 F.E-Pest Environmental, Social and Technological Issues Environmental, Social and Technological Issues Worldwide concern for increasing carbon Emissions within aviation Research and Development needed within the field of reducing carbon emissions M.Duignan 2008 Social response to increasing carbon emissions

15 F.E-Pest Economic Issues Economic Issues; Credit Crunch ; The Financial Crisis 2007 and beyond Volatile Oil Prices

16 F.E-Pest Future Issues and Questions Future Issues and Questions; How much further will the credit crunch further damage both Aerospace and Aviation worldwide? In regards to International defence, are there any forming hostilities around the world? e.g. terrorist attacks Are there any bill trying to be passed through the government regarding carbon emissions leading to further governmental pressures? M.Duignan 2008

17 Recommendations Penetrate countries with subsidiary companies of Cambridge Aerospace to benefit from large numbers of military contracts (cash cow) Collaboration between other Aerospace companies both in the UK and worldwide in times of economic recession and financial crisis Invest highly in research and development and technological advancements regarding carbon emissions

18 Porter s 5 Competitive Forces Stéphanie Masschelein

19 Industry Competition RAF Airlift business unit : no competitor ; BUT if extension of the support to other aircraft, several competitors : - Airbus/Boeing - BAE - Systems FRA - Thales - SERCO - VT Market share in UK = 15% and no opportunity for growth Source : M.E. Porter, Competitive Strategy: Techniques for Analysing Industries and Competitors, Free Press, 1980.

20 Suppliers/Partners Several suppliers of CA in this BU : UK MoD Rolls Royce (UK) Lockeed Martin (UK) ADAT (UAE) FSS (Canada) Babcock Defence (UK) Low to high power Low to high switching costs GLOBALIZATION Source : M.E. Porter, Competitive Strategy: Techniques for Analysing Industries and Competitors, Free Press, 1980.

21 Buyers/Customers UK MoD/RAF Importance of «partnered solutions» between MoD and the industry High power because MoD is the only customer, its power is huge Low switching cost It is not expensive for the MoD to change supplier Source : M.E. Porter, Competitive Strategy: Techniques for Analysing Industries and Competitors, Free Press, 1980.

22 New entrants Main threats are : Middle East Russia China India High threat They represent a high threat but not in the short term Source : M.E. Porter, Competitive Strategy: Techniques for Analysing Industries and Competitors, Free Press, 1980.

23 Substitutes It is a capability driven market and not a technology driven (importance of experience and approvals on aircraft type) BUT need of a continuous improvment Low threat in the short term because the experience increase with the time DIGITALIZATION Source : M.E. Porter, Competitive Strategy: Techniques for Analysing Industries and Competitors, Free Press, 1980.

24 Other forces? Environmental force Obligation to develop sustainable aircraft Technological force CA has to develop new technologies for answering to the environmental need Economic force Financial crisis has an influence on aerospace industry, even if it is low Source : M.E. Porter, Competitive Strategy: Techniques for Analysing Industries and Competitors, Free Press, 1980.

25 Balanced Scorecard Sandra Selmanovic

26 Cambridge Aerospace Vision & Mission Vision: To build on our history to grow a set of sustainable, geographically diverse engineering and aviation related businesses, strategically aligned, delivering best in class support, service and solutions to Civil, Military and OEM Customers across world markets and to be the partner of first choice. Mission: To provide our customers with innovation, responsiveness and best value through delivery of integrated operational support, technology services and people services Source: Cambridge Aerospace Internal Documentation

27 Cambridge Aerospace RAF Airlift Customer: Ministry of Defence (MoD) C-130 Hercules (HI) L-1011 TriStar (TRI) Integrated Project Teams (IPT)

28 RAF Airlift Strategic Guidelines Diversify beyond traditional C-130 business Transform the business from being engineering-led to business performance led, by embedding a culture of output-based performance Deliver projects to quality, cost and timeliness targets Source: Marshall Aerospace Internal Documentation

29 RAF Airlift Balanced Scorecard (I) company s own scorecard Objectives Targets Measures Initiatives Become preferred Tristar service provider to MoD Secure TRI and then engines and accessories contract TRI contract award in Nov 08 Seek view on engine support options Customer Become MoD s Preferred choice for non-hi C130 work Establish open and mutually beneficial relationships at all levels of MoD Frequent visits to senior management All senior MoD staff to be relaxed about MA winning more work and confident in our abilities Attend Stakeholder Reviews and other MoD forums Visit Air Cmd and DEC twice per year to cement wide relationships Explore options for making this attractive to IPT Ensure CA always delivers on its commitments Source: Cambridge Aerospace Internal Documentation

30 RAF Airlift BSC (II) company s own scorecard Objectives Targets Measures Initiatives Financial Increase Revenue Win more work Perform to 09 budget, which includes additional activity Increase success rate of Sales Enquiries Win a greater % of work bid Exceed current rate of 75% Increase ease of contracting and openness Source: Marshall Aerospace Internal Documentation

31 RAF Airlift BSC (III) company s own scorecard Internal Business Processes Objectives Targets Measures Initiatives Develop successful TR processes To have a complete set of processes, which support the achievement of contract performance measures Transition being completed by October 09 KPIs being met at point transition period ends Define staffing and recruit Provide training, supervision and incentives where suitable, Learning & Growth Drive change through the business to improve IPT perception of performance To continue to enhance performance By 2010 have improved scores and impression Ensure CA always delivers on its commitments Source: Cambridge Aerospace Internal Documentation

32 Company balanced scorecard critique The company BSC is surprisingly qualitative. This company is missing the basic purpose of the balanced scorecard quantitative KPIs quantitative objectives and targets Where are the important numbers? Source: Cambridge Aerospace Internal Documentation

33 Customer Revised RAF Airlift BSC (I) our version has KPIs (key numbers) Perspective Objective KPI Target Initiatives Become preferred Tristar service provider to MoD Become MoD s Prefered choice for non-hios C- 130 work Establish open and mutually beneficial relationships at all levels of MoD through completing work on time and within budget Increase customer satisfaction Promote diversification to meet customer needs on a broader basis Percentage of the total MoD expenditure for TRIOS Number of visits to IPT senior management Percentage of projects delivered on time and within budget Number of customer complaints Percentage of implemented changes requested by customer Percentage of R&D dedicated to develop new products and services 2% of the total MoD Expenditure per year Seek IPT view on engine support options as discussed pre-trios 2 visits per year Frequent visits to IPT Senior Management Explore options for making this attractive to IPT 100% of deliveries completed on time and within budget Create central Project Office Customer complaints = 0 Run customer satisfaction surveys, quality circles, develop and implement comprehensive CRM 100% of changes requested implemented 30% of R&D

34 Internal Business Processes Learning & Growth Revised RAF Airlift BSC (II) Perspective Objective KPI Target Initiatives Develop successful TRIOS processes through completing transition on time Percentage of monthly transition completion 5% completed per month (Transition being completed by October 09) Complete sub-processes Timeliness of procedures 100% of sub-processes on time completed on time Drive change through Percentage of staff 15% of staff trained per training and commitment trained per quarter quarter of staff Ensure staff well-being Number of sickness days To be defined according per quarter to current trends and industry benchmarking Better forecasting, efficiency circles Provide training, supervision and incentives where suitable To be assessed

35 Finance Revised RAF Airlift BSC (III) Perspective Objective KPI Target Initiatives Increase Revenue Annual revenue Revenue equal to 09 budget, which includes additional activities Increase ease of contracting and openness Increase success rate of Sales Enquiries Cut costs % of successful work bid Exceed current rate of 75% % of annual costdecrease Decrease costs by 2% annually Improve information flows about competitors, conduct extensive research on Promote innovation and efficiency, lean management, enhance logistics Increase ROI ROI ROI minimum 15% To be assessed

36 Recommendations from the revised Balanced Scorecard Identify strategic objectives, which reflect mission & vision and establish strategy map, quantitative KPIs and target values on top-level Cascade down KPIs to business unit level and provide guidance in implementation process; ensure commitment through active involvement of all parties Review process regularly and prioritize initiatives

37 Miller s Reasons To Diversify Lewis Walsh

38 Diversification

39 Balance Cash Flows Boston Matrix

40 Extend Competencies

41 Strategy Clock

42 Increase Market Power New Geographical Location

43 Recommendations

44 Miller s Reasons for Diversification and the Ansoff Matrix We will now look at two major aspects of diversification: the reasons / motivations (based on Miller) and the strategy options (based on Ansoff)

45 Miller Motivations Vs Ansoff Matrix

46 Ansoff s Matrix Source: Adapted from H.Ansoff,Corporate Strategy,Penguin,1988,Chapter 6. Mariann Raboczki

47 Business Units Aerospace Solutions Cambridge Aerospace Business Aviation Based on the 9 business units on the Cambridge Aerospace website

48 Ansoff Developmental Alternatives Long-term arrangements with military customers M A R K E T Existing New PRODUCT/SERVICE Core Business Sticking with their knitting Civil&Military Aircraft RAF Airlift Aerostructures Aerospace Solutions Manufacturing Existing New HI contract (RAF C-130 Hercules fleet 2030) Contract by UK MoD for (RAF Tristar fleet 2015) Contract with Boeing Integrated Defence Systems (IDS) for the design and manufacture of the Auxiliary Fuel System (AFS) for the Multi Mission Maritime Aircraft (MMA) Partnership Lockheed Martin,BAe Systems,Airbus, Corus, Alenia Marconi,CAV Aerospace,Boeing, and BAe Systems,Land Systems Source: Adapted from H.Ansoff,Corporate Strategy,Penguin,1988,Chapter 6. 48

49 Ansoff Developmental Alternatives PRODUCT/SERVICE M Existing New A Existing R K E T New Market Development Civil&Military Aircraft RAF Airlift Aerostructures Aeropeople Test Services Business Aviation Cambridge City Airport Marshall Solutions Manufacturing Opportunity European economy Poland,Romania expanding overseas Source: Adapted from H.Ansoff,Corporate Strategy,Penguin,1988,Chapter 6.

50 Ansoff Developmental Alternatives M A R K E T Existing New PRODUCT/SERVICE Existing New Product Development RAF Airlift Aerostructures Test Services Aerospace Solutions Manufacturing Tristar package Products are developed by cost and weight efficiency (light HondaJet) Risk reduction for the new Europrop International TP400-D6 Turboprop engine Create, develop&expand new products, services and manufacturing processes Source: Adapted from H.Ansoff,Corporate Strategy,Penguin,1988,Chapter 6.

51 Ansoff Developmental Alternatives M A R K E T Existing Existing New PRODUCT/SERVICE Diversification Miller s Strategy New Source: Adapted from H.Ansoff,Corporate Strategy,Penguin,1988,Chapter 6.

52 Any questions? Thank you for your attention!