478 Memo 2 - good assignment example PDF

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Memo To:

Anthony Chan President

From:

Linda Evangelista VP of Communications

Date:

May 26, 2021

Subject: Bombardier’s Launch of the CSeries _____________________________________________________________________________ This memo contains recommendations on how to successfully proceed with the CSeries program. Bombardier has dominated the regional aircraft market for many years, but with recent entry of new competitors its losing market share. Launching the CSeries may have some financial risks, but with lower energy consumption and the limited number of close substitutes, airlines will consider it the best candidate to replace their aging aircraft. The aircraft market appears to be repairing, which means this is the perfect opportunity for Bombardier to recover its market share and profits. The projected demand for new regional jets shows an increase in the ~150 seat category. Approximately 4,355 regional jets in this seat range will be purchased by the year 2025. The CSeries caters to this category and has the competitive advantage of consuming less fuel than its competitors. The C110 model consumes almost 50% less fuel than the Embraer 195AR. Since the market is recovering, the door has opened for new player to enter. The rivalry between established Aircraft manufacturers is already high and with new BRIC players gaining market share, it is important that Bombardier does something to stand out. By taking a risk and launching with the CSeries, Bombardier will be making a strong attempt to defend its market share. Due to the fact that airlines are basically competing on price alone, the bargaining power of their buyers is high. Thus, there is an incentive for them to purchase aircraft that will decrease costs. In order to capitalize on first-mover advantage, Bombardier would benefit from launching the CSeries before its competitors can create a similar model. Airlines will see the CSeries as an innovative, cost-saving and fuel-efficient model. It is notable that a rival company, Embraer, may have a project in the works, but with that uncertainty, it is advisable to keep the focus internal and prepare for a successful launch. Finally, one major upside to proceeding with the CSeries is the strategic alliance with the Canadian Government. With the site being in Montreal, their offer to provide financial support for the launch will allow Bombardier to create jobs and, in turn, help the Canadian economy. This will establish good will with Canadian airlines and secure buyers for the CSeries models.

As market conditions begin to recuperate, Bombardier should plan to take over the market with the CSeries program. Predictions show high demand regional aircraft for the next 20 years, and with financial assistance from the Canadian Government, the program will be successful. It is very important to help differentiate the company in a such highly competitive space. If Bombardier makes this move and launches the CSeries they will gain first-mover advantage. Bombardier is a highly respected competitor and should capitalize on the CSeries. Thus, selling airlines the cost-saving benefits, such as lower energy consumption.

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