The French aerospace sector

Résumé du document

Each country tries to realize a comparative advantage in a sector and also to have the benefit of producing goods.

In the past, at the earliest of capitalism, Ricardo explained this comparative advantage with two main factors, the natural resources and the labor force.
Nowadays, in a world economy, other factors are also needed to get a comparative advantage.

Also, Porter (1990) developed a new model of this comparative advantage called ‘Porter's diamond' which describes an interconnected system of four major determinants: Factor conditions, Demand conditions, Related and Supported industries and Firms strategy, structure and rivalry.

Two other factors are the government and the chance.
We are now adapting this model for the aerospace sector in France to determinate the French comparative advantage in this sector.

As the aerospace industry is a very large sector, it is appropriate to restrict our research on civil aircrafts because this market is the most dynamic and the military sector depends on the government, a secondary factor in Porter's theory.

Extraits

[...] The geographic concentration is another comparative advantage for France with a lot of suppliers and infrastructures, who are reducing transport costs and improving the communication. To Finish, France is a reception country for Multinational companies and has lot of groups who are leading in their own areas. And as a last point, forecasts for this industry are positive but with environmental problems and the growth of new emerging countries. [...]

[...] In the aerospace sector, the main factor of competition is the product. Aircraft companies are buying a very expensive product; also they want a good quality and many factors are important for the companies such as: - The capacity of the plane - Environmental respect - The sound of the plane - Finishing quality - Components To have a high quality, innovation allows to discover news materials or a new technological in order to get a comparative advantage. Innovation is crucial in this sector. [...]

[...] Government The aerospace sector is an expensive industry with important costs of production and demands a lot of investments Also, governments play an important role of support for this industry with the research that is crucial for aerospace. In France, a large number of institutes of research exist and 8400 people are working for research. Government can be sometimes demanding of this industry with the military sector and for public utility. To conclude, France has a lot of strengths in this sector, which is an historic industry. The employment is qualified; the government helps this sector with the research which is an important factor for this industry in France. [...]

[...] French companies invest a lot for research and development to commit 16% of turnover for this activity and the global amount for research and development in France reaches to 2.3 billion Euros. This brief outline of the French aerospace sector will be completed in details with Porter's Analysis model. II. Porter's Analysis model: Each country tries to realize a comparative advantage in a sector and also to have the benefit of producing goods. In the past, at the earliest of capitalism, Ricardo explained this comparative advantage with two main factors, the natural resources and the labor force. [...]

[...] With the deregulation of this traffic since the end of the 20th century, the public demand has been decreasing but the French government is interested in aircrafts for the police force or firefighters, with helicopters for example. Related and supporting industries This sector needs a large production channel with a lot of different practices in order to complete a plane or a helicopter. We can tell about the aerospace industry that includes all the companies of this industry. The first comparative advantage is with supplier industries. In France, suppliers are a decisive element for the aerospace industry. Suppliers are of different sizes. [...]