The rail equipment industry is divided into six departments: services, propulsion and controls, total transit systems, rail control solutions, rolling stock and fixed installation. First and foremost, moneymaking policies cannot go apart from public subsidies: Government regulations are to be taken into account for companies to be efficient. The trend from public management to private companies compelled passenger rail car manufacturers to make the industry more cost-effective. To do so, those firms could bet on diversification and government subsidies.
Concerning Bombardier Transportation (BT) and its specific business model, it differs from its competitors. BT defines its business in five main operating areas (North America, Atlantic Europe, Continental Europe, Mexico and China). Contrary to a functional strategic structure, BT does not separate its activities within each region, which gives it a wide know-how plan.
[...] To conclude we can say that we think there are more positive arguments according to the view of Bombardier. However, is it the case from consumer's point of view? Is it the case for Adtranz? Indeed, the less it exists competitiveness, the fewer consumers are satisfied. Concerning Adtranz, it is very worried about diffusing its books to Bombardier as for the moment it remains a competitor. By the way, the final decision will be taken by the European Commission. What should Lortie do with Adtranz? Absorb it? [...]
[...] First of all, after reading the text, we think that it is a smart strategic move. Indeed, this acquisition will strength Bombardier‘s existing business. Adtranz is complementary to Bombardier since it has expertise in propulsion systems, high-speed and inter-city cars and signaling systems, which Bombardier has not. So this acquisition will bring needed technology and product expertise to different domains to Bombardier. To complete its product portfolio and increase its competencies are really good points for the Bombardier's future. Moreover, this acquisition would expand Bombardier's geographic scope. [...]
[...] Lortie, as CEO of Bombardier Inc. should respect the Bombardier's history and growth philosophy. As we claims above, acquiring Adtranz is a good merging strategy for BBD: there are more reasons for it than against it at a corporate level. It is consistent with outside companies' current opportunities (Emerging countries using rail technologies close to European ones, green movement in Europe meaning subsidies and help from government and the EU ) The growth strategy BBD went through has been to make acquisitions that increase the value of the whole company, by taking the time to integrate the acquired company so that even employees were backing the acquisition. [...]
[...] Should Lortie focus on top line or bottom line Management? To start the discussion, let's talk about what are the top line and the bottom line management: The Top Line refers to the top line of an Income Statement. The top line shows the Total Sales Revenue. When a company goal is to increase the top line, it means to concentrate on increasing gross sales. The Bottom Line refers to the bottom line of an Income Statement. The bottom line shows the Net Income Available to Shareholders. [...]
[...] But BBD will bring good management and processes to Adtranz, to make it more profitable, organized and efficient. The two have in common to produce the same range of products (rails, trains, trams, snow trains). BBD would then increase its market share. We believe the headquarter needs to stay in Quebec and this for two reasons: First, the pragmatic reason. BBD is a strong company, acquiring a messy, yet profitable, Adtranz. BBD is bringing strong assets to Adtranz in order to make it more efficient. [...]
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