In 250 words, provide a comprehensive and perfect executive summary for the following write-up

Introduction

Bombardier Inc., a leading Canadian aerospace and transportation company, seeks to expand its operations in Portugal as part of its ongoing globalisation efforts. Established in 1942, the company is recognised for its innovative products and services in both aviation and transportation industries (Bombardier, n.d.). Its internationalisation motives are driven by the quest for new markets, diversification, and the need to leverage growth opportunities in emerging economies (Ghemawat & Hout, 2016). The choice of Portugal as the target market stems from a rigorous analysis conducted in CW1, which showed a promising market growth potential, favourable competitive environment, and stable economic conditions for Bombardier’s expansion.

Over the years, Bombardier has adopted various models of internationalisation, such as exports, licensing, joint ventures, and wholly-owned subsidiaries (Hitt, Ireland & Hoskisson, 2021). Their entry into Portugal demands an in-depth evaluation to determine which strategy is best suited to the unique socio-economic landscape and competitive dynamics of the market. Portugal’s growing aerospace industry, coupled with its strategic position in Europe, presents a compelling investment opportunity for Bombardier (Silva, 2021). Furthermore, Portugal’s inclusion in the European Union translates to access to broader markets and resources within the bloc, enhancing its appeal as an investment destination (Cuervo-Cazurra & Ramamurti, 2017). Consequently, this report will focus on analysing the macro, industry, and organisational level factors that may influence Bombardier’s strategic choices in internationalising its operations in Portugal. The report will also explore potential challenges and propose suitable implementation strategies to ensure the successful execution of Bombardier’s market entry strategy.



3a. Macro Environment:

The macro environment factors play a significant role in determining the success of an internationalization strategy, as they provide a broader context for a company's entry and operations in a foreign market (Cavusgil et al., 2017). Entering a foreign market requires careful consideration of the country's political environment. Portugal has a stable political system and a pro-business government, as exemplified by its consistent improvement in the World Bank's Ease of Doing Business ranking, making the region conducive to foreign investment (World Bank, 2021). In addition, Portugal is well-known for its strong relationships with European Union (EU) nations, which makes it a strategic location for Bombardier to access the EU market, as Prazeres (2018) also notes.

Portugal has shown a consistent economic recovery since the 2008 financial crisis, with stable GDP growth and falling unemployment rates (European Commission, 2021). In addition, as a member of the EU, the country has access to funds for infrastructure development and investment incentives (Santos, 2020). These factors suggest a favorable economic environment for Bombardier's internationalization endeavors. However, it is also important to consider potential hazards, such as the effect of the ongoing COVID-19 pandemic on the economy, which could threaten both the global and local aerospace industries (Airbus, 2020). The technological environment in Portugal offers Bombardier opportunities to capitalize on the country's increasing emphasis on innovation and technological development. For instance, the government's Industry 4.0 initiative seeks to promote the modernization and digitalization of industries, which aligns with Bombardier's emphasis on incorporating advanced technology into its products (PwC, 2018). In addition, according to Bain's (2019) report, Portugal has a skilled workforce, notably in the engineering and information technology fields, which could be advantageous to Bombardier's internationalization efforts.

The legal and regulatory environment is a crucial component of the macroenvironment analysis. In this regard, Portugal provides foreign investors with an accessible and transparent legal framework (Pereira et al., 2020). Nonetheless, Bombardier should pay close regard to industry-specific regulations, including those pertaining to aerospace and transportation, as well as EU rules governing competition and incentives (European Commission, 2021). Also, Portugal's sociocultural environment is characterized by a high level of social cohesion and few cultural barriers for foreign investors (Hofstede, 2011). This factor, along with the widespread adoption of English as the business vernacular, could facilitate Bombardier's adaptation to the cultural context of the country (World Bank, 2021).

In conclusion, the macroenvironment analysis indicates that Portugal is an appropriate target market for Bombardier's internationalization strategy. Nonetheless, it is essential to keep in mind that, due to their dynamic nature and potential impact on strategic decisions and implementation, the company must constantly monitor these factors (Cavusgil et al., 2017).


3b. Sector/Industry Analysis

Bombardier's expansion strategy is dependent on the significant development potential of the aerospace and transportation industries in Portugal. The Portuguese government has prioritized the growth and development of the aviation sector, as evidenced by the Aerospace Strategy 2030 (Santos & Simes, 2018) and dedicated investment plans and policies intended at fostering innovation and competitiveness. However, Bombardier must comprehend the competitive landscape in order to assess the industry's attractiveness and determine the optimal market entry strategy.

In terms of market trends, Porter's Five Forces model (Porter, 2008) is an invaluable tool for analyzing the competitive environment of an industry, evaluating factors such as the bargaining power of suppliers and buyers, the threat of substitutes, the possibility of new entrants, and the intensity of competitive rivalry. Notably, the bargaining power of suppliers in the Portuguese aerospace industry is relatively high, as specific raw materials and sophisticated technologies are required for the development and production of aerospace components (Carvalho, Sousa, & Cunha, 2020). Consequently, this factor can impact Bombardier's pricing strategies on the Portuguese market by increasing production costs. Given the presence of a limited number of critical customers, such as airlines and governments, the bargaining power of buyers on the Portuguese market is also substantial. For Bombardier to differentiate itself from competitors and develop long-term relationships with Portuguese buyers, it will be crucial for the company to comprehend the requirements and preferences of its customers.

Due to the high barriers to entry, which include stringent regulations, the necessity of economies of scale, and significant research and development investments, both the threat of substitution and new entrants in the Portuguese aerospace sector are relatively low (Carvalho et al., 2020). However, the emergence of potential disruptors, such as new technologies and business models in the transportation sector (e.g. ride-hailing and electric vehicles), can pose indirect threats to Bombardier's market growth (KPMG, 2019).

The competitive antagonism in Portugal's aerospace and transportation industries is moderate. Major competitors such as Airbus, Embraer, and Lockheed Martin operate in the market, presenting Bombardier with significant competition. Recent reports indicate that these companies have formed strategic alliances with Portuguese firms in order to expand their presence in the country (Tavares et al., 2020). Therefore, Bombardier will need to consider potential opportunities for collaboration in order to effectively penetrate the market and secure a competitive advantage.

In conclusion, the industry/sector analysis indicates that the Portuguese aerospace and transportation market presents Bombardier with significant growth prospects.


3c. Organizational Level

In order to create a sustained competitive advantage, resources must be valuable, rare, inimitable, and non-substitutable (VRIN), according to the resource-based view (RBV) of the firm (Barney, 1991). Building high-quality aerospace and transportation products requires significant manufacturing and engineering skills, according to Bombardier (Miclea, 2017). Additionally, the company's potent worldwide brand and well-established position as a market leader support its edge over rivals on the international stage (Hitt et al., 2018).

A key feature that sets Bombardier apart from its rivals is its end-to-end product portfolio in the aerospace sector, which offers consumers a wide range of product options from business to commercial planes (Brett, 2021). This enables the company to serve a variety of market sectors and take advantage of synergies between its divisions. The dynamic capabilities framework, according to Teece (2014), implies that businesses should constantly adjust and reorganize their resources and skills in response to shifting market conditions. In this regard, Bombardier has a demonstrated history of innovation and research and development (R&D), as shown by its dedication to funding R&D and its regular product launches (Bombardier, 2019). These capabilities not only increase the firm's competitiveness but also equip it to deal with the dynamically shifting market environment.

According to Ghemawat's (2001) CAGE (cultural, administrative, geographic, and economic) paradigm, Bombardier may face difficulties as a result of the cultural, linguistic, and economic contrasts between the Canadian and Portuguese contexts. When entering a new market, adaptation takes precedence over standardization, as Hutzschenreuter et al. (2015) argued. Bombardier must therefore be prepared to adapt its current resources and capabilities in order to satisfy the particular needs of the Portuguese market.

Engaging in cooperative ventures with local partners might help to solve these issues by facilitating knowledge transfer and utilizing local skills (Lu & Beamish, 2006). Such partnerships might improve Bombardier's comprehension of the Portuguese market, guide its marketing initiatives, and give it access to regional networks and resources. Bombardier can also take use of Portugal's unrealized potential by investing in capacity building and the creation of a competent workforce there (Olson & Stone, 2020). Innovative items suited to the Portuguese market can be produced by fusing the company's own expertise with regional resources.



4a. Bombardier Internationalisation Initiative in Portugal Value Proposition

Bombardier's internationalization goal in Portugal is to deliver a differentiated and integrated aerospace and transportation portfolio (Thomas, 2019). Chernev (2018) says a solid value proposition is essential for international market success. Bombardier's value portfolio for Portugal includes innovative and eco-friendly mobility solutions, high-quality goods, and excellent after-sales support (Bombardier Inc., 2021). These features distinguish the firm from its competitors. Kaplan and Norton (2016) suggest balancing customer and shareholder value in a compelling value proposition. Bombardier's value proposition supports its ambition of worldwide expansion and long-term profitability (Bombardier Inc., 2021). According to Ferraro and Brody (2017), Bombardier's value proposition would appeal to governments, investors, and end-users, enhancing its chances of success in Portugal.


4b. Analysis of Strategic Choices

To successfully enter the Portuguese market, Bombardier must select an appropriate business-level strategy. Porter’s (1985) generic strategies – cost leadership, differentiation, and focus – provide a useful framework to guide the company’s strategic choices. Bombardier has consistently pursued differentiation as its primary strategy on a global scale, capitalising on its innovative capabilities and strong brand reputation (Thomas, 2019). In line with this approach, Bombardier should maintain its differentiation strategy in Portugal, emphasising its advanced and eco-friendly technologies, as well as its comprehensive product and service offerings.

However, solely focusing on differentiation may limit Bombardier’s ability to be competitive in the face of aggressive pricing strategies from rivals (Besanko et al., 2019). Therefore, it is crucial to also consider interactive strategies, such as game theory (Dixit & Nalebuff, 2010), which can help the company anticipate and respond to competitive threats. For instance, adopting a tit-for-tat strategy, wherein Bombardier mirrors the actions of competitors, can deter rivals from initiating price wars and promote cooperative behaviour in the market (Axelrod, 2000).

Furthermore, combining the differentiation strategy with a focus strategy, targeting specific market segments or niches, can enhance Bombardier’s competitiveness in Portugal (Porter, 1985). In this context, the firm can leverage its extensive product portfolio to cater to specialised customer needs in areas such as urban mobility and accessible transportation. Ultimately, a strategic approach combining differentiation, interactive strategies, and focused targeting will position Bombardier favourably in the increasingly competitive Portuguese market.


4c.  Potential Point Of Differentiation From Present Competitors

The Portuguese market presents an opportunity for Bombardier to acquire a competitive edge by separating itself from its existing competitors through the provision of one-of-a-kind value offerings, technological innovation, and exceptional customer service. According to the theory put forth by Porter (1985), differentiation is essential for businesses seeking to acquire a durable advantage in the landscape of competition. In addition, Dunning's (2000) eclectic paradigm proposes that the success of multinational corporations like Bombardier in new markets can be attributed to a combination of ownership, location, and internalization advantages. These advantages can make a company more competitive.

In accordance with the argument that Caligiuri and Stroh (1995) made on the significance of investigating the local competition, it is essential to take into account the competition that Bombardier faces in Portugal. Embraer is a Brazilian aircraft manufacturing firm that is known for its cutting-edge technology and unique product offerings (Figueiredo, 2010). The company is a prominent player in this market. Therefore, in order for Bombardier to separate itself from Embraer, it needs to place a greater emphasis on innovation and technology. For instance, Bombardier can increase their appeal to customers by introducing cutting-edge airplane models that feature improved fuel efficiency, environmental performance, or modern avionics.

According to Zeithaml et al. (1996), one of the most important factors in differentiating a business from its competitors is providing exceptional customer service. This element is associated to higher levels of customer satisfaction and loyalty. This can be accomplished by Bombardier by putting into practice service quality models such as SERVQUAL (Parasuraman et al., 1988) in order to monitor customer feedback, rectify identified service gaps, and constantly enhance client-facing operations. In addition, the company is able to capitalize on the local knowledge and capabilities available to it by forming strategic alliances with local suppliers, educational institutions, or research institutes (Rugman and Verbeke, 2001). These alliances will allow the company to further develop its expertise in the Portuguese setting.

Bombardier has the ability to differentiate itself from its competitors in the Portuguese market by adopting differentiation strategies focused on technological innovation and great customer service. This will make Bombardier more appealing to potential buyers in the Portuguese market. According to Johnson et al. (2017), this would lead to an increase in market share as well as an improvement in the overall performance of the organization.

4d.  How Business Strategy Can Contribute To The Decision-Making Process

A well-planned business strategy, such as the differentiation-based approach utilized by Bombardier, has the potential to make a substantial contribution to the corporate-level strategy of a firm by aiding the company's growth and expansion into new markets. Since Barney (1991) stressed that resources and capabilities play a vital part in building a firm's competitive advantage, Bombardier's distinctive value offer, technological innovation, and customer service have the potential to strengthen the company's position in the global aerospace and transportation market.

Bombardier has the ability to increase its worldwide footprint and improve its corporate reputation for quality and innovation if it puts into action a robust differentiating strategy in the Portuguese market. In turn, this would assist the company's strategic goals of increasing profitability, maintaining growth, and increasing market penetration (Grant, 2016).

According to Prahalad and Hamel (1990), if Bombardier is able to successfully integrate its business-level strategies into its overall corporate-level strategy, the firm will be able to ensure that its development into Portugal is in line with the company's vision and objectives, which would pave the way for the company's long-term growth and success.

4e. International Strategy To Adopt 

To determine the most appropriate international strategy for Bombardier’s expansion into Portugal, it is essential to consider established frameworks such as the Bower-Ghoshal (B-G) matrix (Ghoshal and Bartlett, 1991), Porter’s diamond model (Porter, 1990), and the international value chain (Porter, 1985). These frameworks serve to analyze competitive advantage, home country conditions, and value creation mechanisms in the context of international business expansion.

According to the B-G matrix, firms can choose between global, international, transnational, and multidomestic strategies based on their strategic goals and competitive pressures (Ghoshal and Bartlett, 1991). Considering Bombardier’s need to differentiate itself from its competitors in the Portuguese market, a combination of transnational and multidomestic strategies appears most appropriate. A transnational strategy allows Bombardier to integrate its operations worldwide while adapting its products to specific market demands (Teece, 2014) concurrently. A multidomestic strategy enables the firm to customize its offerings to cater to local preferences and regulatory requirements (Hill and Hult, 2016), enhancing Bombardier’s competitiveness and market shares in Portugal.

Furthermore, Porter’s diamond model can help identify potential sources of competitive advantage for Bombardier in the Portuguese market. Factors such as domestic competition, supplier clusters, specialized workforce, and innovation capabilities can contribute to Bombardier’s success (Porter, 1990). In this context, the firm should capitalize on local partnerships and knowledge transfer to strengthen its position in Portugal’s aerospace industry (Rugman and Doh, 2008).

Lastly, analyzing Bombardier’s international value chain offers insight into the company’s value creation processes in Portugal (Porter, 1985). By engaging local suppliers, tapping into skilled labor forces, and investing in the development of new products and services, Bombardier can create additional value for its customers and generate competitive advantage (Pisano and Shih, 2012).

In conclusion, adopting a combined transnational and multidomestic strategy, supported by insights from Porter’s diamond model and the international value chain, presents the most suitable approach for Bombardier’s expansion into the Portuguese market. By effectively leveraging local resources, knowledge, and market opportunities, Bombardier can establish a strong presence in the Portuguese aerospace and transportation industry and effectively compete with existing players.




5a. Entry Mode

The entry mode for Bombardier’s internationalisation strategy in Portugal is an essential aspect of its expansion plan. According to Dunning (2000), entry modes determine factors such as resource allocation, commitment levels, and control over a foreign market. Root (1994) asserts that a proper choice of entry mode can significantly mitigate entry barriers and optimise the opportunities in the target market.

While joint ventures, franchising, and partnerships are popular entry modes in international business (Hill, Hwang, and Kim 1990; Doole and Lowe 2012), the choice of entry mode for Bombardier in Portugal should be based on the firm’s unique competencies, resources, and the industry requirements in Portugal. According to Prahalad and Hamel (1990), the core competence of Bombardier lies in its technical expertise and innovative capabilities in aerospace and transportation product development. This expertise can be further leveraged through a wholly owned subsidiary (WOS) entry mode, allowing Bombardier to maintain control over its resources and technology while expanding its operations in Portugal (Sharma and Erramilli 2004).

A WOS entry mode would also enable Bombardier to benefit from Portugal’s favourable business environment and market growth opportunities (Enderwick 2011). According to Porter (2008), Portugal has advanced infrastructure, skilled workforce, and strategic geographical location, providing a favourable environment for a WOS. Furthermore, under the EU rules and regulations, Bombardier can enjoy various trade benefits and patent protection rights that can facilitate the company’s expansion in Portugal (Stoetzer and Wulfert 2018).

The chosen WOS entry mode will also allow Bombardier to gain a competitive advantage over existing local and global competitors (Peng, Wang, and Jiang 2008). By investing in research and development and collaborating with local research institutions, Bombardier can enhance its market positioning in Portugal while developing tailor-made solutions for its customers (DePamphilis 2012). This would enable the firm to effectively address its target market’s needs, contributing to its long-term success in the region (Brouthers and Hennart 2007).

In conclusion, Bombardier should adopt a WOS entry mode in Portugal to leverage its unique competencies, exploit the favourable business environment, and achieve a sustainable competitive advantage in the aerospace and transportation industry.

5b.Potential Challenges

Despite the advantages of a WOS entry mode, Bombardier may face potential challenges in Portugal’s internationalisation initiative. According to Yip (2018), companies expanding into foreign markets often face adaptation hurdles, especially in terms of cultural, political, and regulatory differences.

One potential challenge for Bombardier is understanding and adapting to Portugal’s unique cultural context. Hofstede (2001) highlights the importance of cultural awareness and sensitivity for successful international business operations. Bombardier may need to invest in understanding the local business practices, customer preferences, and communication styles to forge strong relationships with stakeholders and avoid conflicts (Steers, Sanchez-Runde, and Nardon 2012).

Another challenge for Bombardier is navigating the complex regulatory environment in Portugal, which may be distinct from the regulations applicable in other European countries or Canada. As stated by Buckley et al. (2007), regulatory differences can present significant barriers to market entry and affect a firm’s ability to operate in the new market. Bombardier should be vigilant and proactive in understanding and complying with local regulations, industry standards, and legal requirements to avoid complications and disputes (Czinkota and Ronkainen, 2012).

Additionally, operating in a new market also exposes Bombardier to macroeconomic risks and uncertainties in Portugal, such as fluctuations in exchange rates, inflation, or political instability (Rugman and Verbeke 2004). To mitigate these risks, Bombardier should adopt a comprehensive risk management strategy, including monitoring the economic and geopolitical landscape, scenario planning and adopting hedging strategies to safeguard its financial position (Miller 1992).

In conclusion, while a WOS entry mode offers significant advantages for Bombardier in Portugal, it should adopt a proactive approach to identify and address potential challenges associated with cultural adaptation, regulatory compliance, and operation in an uncertain environment to enhance the likelihood of its successful internationalisation therein.

5c. Potential Risk Mitigation Strategies?

To overcome the potential challenges and risks associated with Bombardier’s internationalisation in Portugal, the company must develop a comprehensive risk mitigation strategy. According to Luo (2001), a well-crafted risk mitigation plan enables firms to minimise the impact of unpredicted events or negative trends while enhancing their prospects of success in foreign markets.

One crucial risk mitigation strategy is to invest in cultural intelligence and develop a deep understanding of Portugal’s unique cultural context (Earley and Mosakowski 2004). By conducting regular cultural training and workshops for employees, Bombardier can build cultural competencies and bridge the communication gap between its workforce and Portuguese stakeholders (Thomas and Peterson, 2017). Additionally, Bombardier should promote an inclusive and diverse work environment to further strengthen its cultural adaptability and increase its ability to establish meaningful relationships with local stakeholders (Eisenhardt, Myers, and Sharma 2019).

For addressing the regulatory challenges, Bombardier can benefit from engaging local legal advisors and consultants to gain comprehensive insights into the industry-specific regulations and legal requirements (Cavusgil et al. 2014). These local experts can provide guidance on navigating complex regulatory frameworks, ensuring compliance, and identifying potential legal conflicts in advance (Eden and Miller 2001). Additionally, Bombardier should assign a special task force responsible for staying updated on regulatory changes and continuously examining its operations for compliance with evolving rules and standards (Cuervo-Cazurra and Genc 2008).

To mitigate macroeconomic risks, Bombardier should adopt a portfolio of risk management practices (Jorion 2007). These might include securing long-term and fixed-price contracts with suppliers to minimise the exposure to exchange rate fluctuations, inflation, and price volatility (Aabo, Fraser, and Simkins 2005). Additionally, Bombardier should closely monitor the economic and geopolitical landscape in Portugal, using scenario planning as a tool to prepare for multiple contingencies and identify plausible responses (Chermack and Lynham 2002).

In summary, by implementing a robust risk mitigation strategy that includes cultural adaptation, regulatory compliance, and macroeconomic risk management, Bombardier can enhance its resilience to potential challenges and increase the likelihood of its successful internationalisation initiative in the Portuguese market. This proactive approach will enable Bombardier to take advantage of the vast opportunities in Portugal’s aerospace and transportation industry while minimising the risks associated with its expansion.