January 10th, 2018
Bombadier expansion to Belgium – analysis
The intended expansion to Belgium of Bombardier can be argued in view of the country specific CAGE analysis outlined. The Cultural, Administrative, Geographical and Economical distances would affect the planned expansion of Bombardier to Belgium. One of the positives for the expansion plan is the countries well laid out infrastructure and its central location among the European Countries. Being a country with a “well-developed infrastructure” and its central location that allows it to act as an appropriate “transit and distribution center” for products destined for the rest of Europe (NZTE 10), the aerospace section (Bombardier Inc. 14-16) of the company would have an opportunity to provide cargo services to the products that are either in transit or destined for the country. Such would be aided by the existence of a well established freight terminal that is found at the Brussels airport (NZTE 10). Importers of products into the European countries would thus provide a market and increase the demand for Bombardier Aerospace line of products. The transportation section (Bombardier Inc.16-17) also could find an appropriate market to tap into in the Benelux Economic Union that also comprises the Netherlands and Luxembourg (NZTE 2). The region is characterized by a dense population with high economic development evidenced by various harbors of exemplary status with a vast continental hinterland (Bombardier Inc. 2). The culture of the community to live far away from the city centers (Vandenbulcke, Steenberghen, and Thomas 50) also provides a possible market for expansion of the transportation to such areas thus further increasing the possible revenues from the domestic market. The government tax incentive program (NZTE 3) the affiliation to a common currency with 13 other European countries – the Euro – providing a possibility of growth undeterred by currency fluctuations from the importing countries that the corporation would wish to import its raw materials from (Rogoff 442). The comparable ease with which business entities can be started and carried out in Belgium (IFC and the World Bank 2) and indicates that the country would be an optimal location for Bombardier to expand its operations into.
Challenges however exist in the planned expansion of the corporation to Belgium. One of these is the differing language orientation among different regions of the Western European country. The differences in the designated official languages – Dutch, French and German – (Kwintessential 1) could prove a barrier to carrying on of business. Only one of these languages – French- as an example, qualifies under the United Nations’ designated languages (United Nations 1). Such languages are also variants of the dialects in the origin countries (NZTE 2) which would be a limiting factor when labor mobility from international countries is taken into consideration. Further the competition for passenger and goods transportation with the automobile industry which is well developed in Belgium (NZTE 10) could be a limitation to the market for transportation services unless such services provided a cheaper and more efficient mode of transportation. The later challenge could however be addressed by the commitment of the company to provide fast rail vehicles that offer customers better services (Bombardier Inc. 4 – 8). Another challenge though exists due to the presence of ports with which countries could link with Belgium for imports thus limiting the market for rail transportation. The vast hinterland provided by the Benelux region unity (Bombardier Inc. 1), however would require rail services for the transport of bulky imports destined for areas not served by the coastline.
The probable benefits that could be derived by Bombardier through expansion to Belgium are well noted. First the central location of the country in the European Union means that the country would be a good base from where Bombardier services would be accessed throughout Europe. Further the subscription of the country to a common trading currency would further buttress such trade between the countries with a common currency (Glick, and Rose 1138) and improve the flow of capital (Blanchard and Giavazzi 3-36). Bombardier could gain from all these aspects since Belgium is notably limited in natural resources (NZTE 3) hence the corporation could rely on the imports for its raw materials. With the extensive transport network in the country (NZTE 10), the dense population and large hinterland of the Benelux region (Bombardier Inc 1) the expansion of the company to the country would be advantageous if the challenges brought about by the existing transportation modes (NZTE 10; Bombardier Inc. 1) are appropriately addressed through the provision of a better transportation option. Go to part 4.