January 10th, 2018
Case study: Bombardier expansion to Belgium
The advantages provided by the expansion into the global market are numerous but the expansion to any one market should be guided by the analysis of such a market. Companies expand to other countries to achieve the benefits offered by such markets such as raw-material acquisition and increase the market share. These advantages may however not be realizable if the analysis of a country-specific qualities is not done in order to formulate the expansion plans to fit the desired market. Ghemawat proposes that industries wishing to expand to the global market successfully should make an analysis of the “cultural, administrative,…geographic and Economic” – CAGE analysis – of the desired market (as cited in, Sanne 5). Sanne (5) further points out that the cultural distance is crucial when “the products have a high linguistic content, are part of the cultural or national identity, [and/or] vary in features” according to the country they are being introduced to. Such variance probably could be influenced by the administrative distance between the initial country of operation and the proposed expansion country due to policies that could limit or allow the inclusion of specific features in the products. For products that are easily perishable or fragile, then geographical differences are worth the analysis which also could be true for bulk products (Sanne 5). The Economic distance assessment is crucial in cases where demand variation is affected by the level of income, the economies of scale that could be derived are limited, there are salient differences in the cost, and the business systems and demand for the product significantly differ from those the corporation has been operating under (Sanne 5).This paper seeks to analyze the expansion of Bombardier – an aircraft and train manufacturer – into the Belgium Industry. The paper makes a CAGE analysis of Belgium and makes recommendation on the expansion proposition to the management of Bombardier. go to part 2.