"Strategic Management in Action: The Global Perspective: Sukhoi Holding Company”

Read "Strategic Management in Action: The Global Perspective: Sukhoi Holding Company”

a. Research various aircraft manufacturers?

b. Conduct a mini-SWOT analysis of Sukhoi Holding Company.

c. How is Sukhoi Holding Company going to develop a competitive advantage over other aircraft manufacturers?

d. Explain if strategy should be low cost provider, differentiation, or focus. Explain.

A) Research various aircraft manufacturers?

Hawker BeechCraft

It combines two of aviation's most ¬storied names. In 1937, Walter Beech introduced the Model 18, arguably the first cabin-class twin-engine business airplane. In 1964, Beech had debut the twin-turboprop King Air, which remains in production to this day. Raytheon bought Beech in 1980 and added the UK's Hawker brand to the fold. It sold the company in 2007 to an investment group led by Goldman Sachs. Hawker Beechcraft pioneered the use of composites in business aircraft construction, including in the current Premier 1A and Hawker 4000 business jets.

BOMBARDIER AEROSPACE

Bombardier started out as a snowmobile manufacturer in 1942 and has grown into one of the world's largest producers of business jets and regional airliners. Over the years, the company has expanded its aircraft business mainly through acquisitions, buying brands such as Canadair, De Havilland, Learjet and Shorts.

In the last 15 years, the Montreal-based company has introduced several business jet models, including the Learjet 40 and 45, Challenger 300 and 605 and Global 5000 and Express XRS. The forthcoming Learjet 85 will be the first all-composite business jet. The ultra-long-range Global 7000 and 8000 models will join the fleet in 2016 and 2017, respectively.

Lockheed Martin

Lockheed Martin, one of the world's largest defense manufacturers, reported net sales of $21.95bn for the first half of 2014. Net earnings of the company stood at $1.82bn for the same period. Lockheed Martin's business segments include Aeronautics, Information Systems & Global Solutions (IS&GS), Missiles and Fire Control, Mission Systems and Training and Space Systems. The company, based in Bethesda, Maryland, employs about 116,000 people worldwide. It develops and produces Aircraft, Land Vehicles, Unmanned Systems, Missiles and Guided Weapons, Missile Defense Systems, Sensors and Radars, Naval Systems, Satellites, Launch Vehicles and Spacecraft, IT Systems and emerging technologies.

Airbus

The concept of airbus made a great impact on the human world. Airbus entered the bizliner market in 1997 with the Airbus Corporate Jet (ACJ), an executive version of its A319 airliner that sold initially for $35 million. Early on, ACJ sales lagged those of the Boeing Business Jet, which had been introduced to the market the year before. More recently, ACJ annual sales have eclipsed Boeing's. Encouraged by orders from the Middle East and Asia-Pacific regions, Airbus has added the longer-fuselage A320 Prestige and a shorter variant, the A318 Elite, to its executive lineup. For VVIP, government and other customers requiring the ultimate in space and long-distance capability, Airbus also offers executive versions of its A330, A340, A350 and A380 wide body jetliners.

EMBRAER

Embraer has been building airplanes for more than 30 years, but it wasn't until 1994 when the Brazilian government privatized the company that the business took off. Today, Embraer is the world's fourth-largest commercial aircraft manufacturer. Its ERJ 135/145 airframe served as the foundation for the company's first business jet, the ¬Legacy 600, which was introduced in 1999. In the past ¬decade, Embraer has laid the foundation for a strong push into the business jet market by developing the Phonon 100 and 300 small-cabin jets, the Legacy 450 and 500 midsize jets and the Lineage 1000 bilinear. The longer-range ¬Legacy 650 was certified last year.

CESSNA-AIRCRAFT

Cessna is arguably the best-known brand in all of aviation. The Wichita Company built its first airplane in 1927 and has rolled out more than 190,000 in the eight decades since. Of the roughly 16,000 business jets in operation worldwide, Cessna has produced a third of them. The company's 10 business jet models range from the Mustang very light jet to the world's fastest business jet, the Mach 0.92 Citation X, which will soon spawn the upgraded and faster Citation Ten. Cessna had planned to target the large-cabin market with the Citation Columbus, but canceled that program soon after the country's financial crisis began.

Raytheon Company

Raytheon Company reported net sales of $11.2bn for the first half of 2014. Income attributable to the company for the same period was $1.14bn. Raytheon is an international aerospace and defense company offering products for defense and commercial customers. Headquartered in Waltham, Massachusetts, it operates offices in 19 countries and sells products and services to customers in 80 countries. The company's business segments are missile systems; space and airborne systems; integrated defense systems; and intelligence, information and services.

Safran Group

Safran Group's revenues in the first half of 2014 accounted for $9.65bn, making it one of the world's top 10 aerospace and defense contractors. Safran is a high-technology international group and a top class component provider to the aerospace, defense and security industries. The company employs 66,300 people. Safran operates three major businesses including aerospace, defense and security. It develops, manufactures and sells engines and propulsion systems for civil and military aircraft/rotorcraft, ballistic missiles, launch vehicles and satellites. It also offers a range of components and systems for civil and military aircraft and helicopters.

B) Conduct a mini-SWOT analysis of Sukhoi Holding Company.

Sukhoi Holding Company is Russia's major aircraft holding company, employing more than 26,000 people. 100% of stock of the Sukhoi Aviation Holding Company (JSC) belongs to the United Aircraft Corporation (JSC). The Company supports a complete cycle of work in aircraft engineering: from fronted engineering to comprehensive after sales support. The holding's products, such as Su-marquee combat aircraft, are state-of-the-art weapons systems in the global market, which form the backbone of the front line aviation of Russia and tactical air forces of many other countries. The Company is Russia's major manufacturer of export aircraft, placed 3rd in the world in terms of the numbers of modern fighters produced. The Company is currently implementing promising programmed in the field of military and civil aircraft engineering.

SWOT Analysis of Sukhoi Holding Company

Strengths:

Reputed and strong brand image.
Technology advancement
Largest aircraft holding company
Different Product line, from fighters plan to military forces to passenger carrier commercial planes
Export quality aircraft manufacture in world
Effective fast delivery time after contract signed
Best HR practices for employees' motivation

Weaknesses:

Mainly focus on internal market with comparison of foreign market
Insufficient advertisement and marketing exercise
Main focus on military products
Increasing demand of aircraft in global market
Capacity for new generation product and huge coverage of market share
Can create competitive advantages by doing agreement and contract (merge, acquisition) with other small competitors in industry

Opportunity:

Production of low cost commercial aircraft by outsourcing as cheap airbuses are being produced in China.

Threats:

Increasing competitions
China rising as the cheapest and quality product supplier
Global economy downturn
Possible decline in military products due to peace agreements

C) How is Sukhoi Holding Company going to develop a competitive advantage over other aircraft manufacturers?

Sukhoi Holding Company (JSC) engages in the design, manufacture, sale, and export of military and civil aircraft to customers in the Russian Federation and internationally. He company's civil aircraft comprises multi-role mixed cargo aircraft, regional jets, and aerobatic aero planes. It also offers logistics support, upgrading, repair, training and consulting, spare part supply, practical assistance, technical. The Company supports a complete cycle of work in aircraft engineering: from frontend engineering to comprehensive after sales support. The holding's products, such as Su- marquee combat aircraft, are state-of-the-art weapons systems in the global market, which form the backbone of the frontline aviation of Russia and tactical air forces of many other countries. The Company is currently implementing promising programs in the field of military and civil aircraft engineering.

When the company increase price for the super jet 100 aircraft in 2012, it was still cheaper than its rival company. The price was still 15% below then the other rival company. This means that the company was able to utilize effectively its resources and create competitive advantages of cost leadership. In this way the company can maximize productivity by proper and optimal utilization of its core competencies. The Company supports a complete cycle of work in aircraft engineering: from fronted engineering to comprehensive after sales support. The holding's products, such as Su- marque combat aircraft, are state-of-the-art weapons systems in the global market, which form the backbone of the front line aviation of Russia and tactical air forces of many other countries. The Company is currently implementing promising programs in the field of military and civil aircraft engineering.

D) Explain if strategy should be low cost provider, differentiation, or focus. Explain.

According to my opinion, the strategy for future progress of the company should differentiation. There was much similar kind of aircraft manufacturers. To become the leader in the industry Sukhoi Company should differentiate its product and they also can differentiate in term of services such as; after sales services. Since the competition has increased highly in the industry, the Sukhoi Company has been facing different threats in market. China coming up with cheap product in market is making great influence in market and attracting the demand. So to overcome the completion the company should go with product differentiation strategy so that it can retain its market share and also create new market. If their differentiation strategy works, they may be able to charge their customers a premium for their product or service. They can design, manufacture, sale, and export of military and civil aircraft to customers and differentiate themselves from their competitors. Also they can produce new-generation aircraft for front line aviation, civil aviation and unmanned flight vehicles which can be achieved through alliances with international partner and spending resources on research and development.

However this differentiation strategy works, they may be able to charge their customers a premium for their product or service. They can design, manufacture, sale, and export of military and civil aircraft to customers and differentiate themselves from their competitors. By continuous R&D they can provide commercial aircrafts having capacity of Boeing in low cost, which differentiates their product than their competitors.