Manufacturing

  • A CAT Smiles in China

    CaterpillarA corporate strategy article by Thunderbird students Shen-Chun Lin, Aimee DeGrauwe, Eli Darby, Monica Willbrand, Raymond Caruso and James Moore

    CSR: The Reputation Necessity

    For most companies, Corporate Social Responsibility (CSR) is a face-saving, repair mission in reaction to some recently identified social injustice or industrial accident.  Examples of reputation saving CSR have been seen with Nike’s early reaction to substandard working conditions or Union Carbide’s Bhopal tragic explosion in 1984.  At best, most companies treat CSR as a cost center line item akin to corporate publicity or charity, where a separate division within the organization implements a “community outreach” program.  Although these programs do have merit, they are mainly counter balances to the damages a corporation’s normal operations have on the community and environment.  This inefficiency lies in the fact that many firms’ CSR attempts pit society and business against each other, when in reality they should be dependent.  In addition, CSR tends to push firms into thinking generally, rather than about shared value.  In the developed world, national and regional laws help regulate and limit the damage a company’s presence can have at large. From environmental regulations, to worker safety standards, many US and EU companies meet or exceed the bare minimums laid out by governments.

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  • Embraer: Flying Further and Faster into the Future

    EmbraerA corporate strategy article by Thunderbird students Mitch Epstein, Chad Bonfiglio, Trudy Sharp, Edgar Khachatryan and Alyssa Watt

    Embraer, a Brazilian aircraft manufacturing company, flew into a lead role in the regional jet industry. With a tagline of “For the Journey,” Embraer faces significant pressure and competition.  In order to maintain and extend its lead in the industry, Embraer will have to build on its unique history and push harder and deeper into strategic relationships and innovations.

    National Champion

    Embraer’s unique relationship with the Brazilian government has positioned the company well to continue pursuing its lead in the regional aircraft market.  When the Brazilian government was looking for a national champion in the late 1960s, in the airplane manufacturing sector, it created its own “mixed enterprise.”  Created in 1969 as a joint venture, shareholders and the Brazilian government formed Empresa Brasileira de Aeronáutica, better known as EMBRAER.

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  • Is Boeing’s Strategy Airworthy?

    BoeingA look into the turbulent flight path that lies ahead, by Thunderbird students Alexander Espiritu, Robert Grimes, Carlos Flores, Brian Long and Arturo Furones Seco

    As one of the two giants in the commercial aircraft industry, Boeing Commercial Airplanes (BCA) currently dominates a significant portion of the commercial aircraft market.  However, as that market continues to evolve, BCA faces a number of critical strategic issues; how the company chooses to deal with them will determine whether or not the company succeeds in maintaining a tight hold on its market share and future profits.  Amongst these strategic issues, the most serious challenges to BCA’s future operations are the new entry of additional competitors to the industry, supplier and partnership relationships, and relations between the company and its labor force.

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  • Boeing in China: Creating Their Own Competitor?

    BoeingA corporate strategy article by Thunderbird students  Amanda Bhatia, David Freeman, David Wilson, Geoffrey Christanday, Jennifer Mousseau and Matthew Larson

    As China’s economy develops, so do the prospective opportunities for foreign firms eager to sell their goods and services to these new Chinese customers.  However, many multinational corporations have already tried and failed – and yet – what makes these MNC’s keep coming back?

    On March 6, 2012, Boeing and COMAC (Commercial Aircraft Corp. of China) announced[i] to the world that they will be joining forces for the first time ever, in creating a “collaboration agreement to partner in areas that will enable commercial aviation industry growth in China and potentially around the world”.  This partnership sounds well intentioned, but could make Boeing, and even Airbus (their current main competitor) nervous as to their future prospects in China and the future global market.  Will Boeing's partnership with COMAC provide Boeing with an opportunity to meet strong aircraft demand forecasts in China in coming years, or instead mean the creation of their own competitor?

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  • Razor Thin Margins: The Key to Finding Profits in Emerging Markets

    razorTo Shave or Not to Shave

    Like most men around the world, Prakash, a thirty-year-old Indian port worker wakes up in the morning facing the unpleasant but necessary task of having to shave. But unlike most men in the developed world, for Prakash shaving means sitting on the floor with a small amount of still water, balancing a hand-held mirror in low light, and experiencing frequent nicks and cuts from his double-edged razor[1].

    On the other side of the globe, with headquarters in Cincinnati, Ohio, Procter and Gamble (P&G) is one of the largest consumer products companies in the world with operations in more than 80 countries and more than 300 marketed brands sold in 160 countries. Traditionally, P&G’s product mix has focused on high-end products geared towards the developed markets. Hurt by slowing sales growth in developed markets during the recent global recession and European economic crisis P&G began to look at emerging markets for long-term growth[2].  P&G’s historic focus on developed markets left them unprepared to enter the emerging markets where they were blindsided by their competitions’ market penetration. P&G underestimated the cost of building its presence in developing countries resulting in a shortage of funds to finance its expansion in emerging markets and an inability to achieve economies of scale. This resulted in higher priced products in these regions. Compared to its competitors like Unilever or Colgate-Palmolive, P&G has been slower at reverse engineering its products to be affordable to the bottom of pyramid market segment in emerging markets.

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  • Luxury Goods MNCs Collaborate to Battle Counterfeiting in China

    China counterfeitsA corporate strategy article by Thunderbird students David Curtis, Merissa Gordon, Kori Joneson, Emily Mahoney, and Robert Thompson

    The luxury goods market in China is a must-enter space for global companies in this industry. Research indicates that multinational corporations (MNCs) need to assess their current strategies and take advantage of challenging, yet rewarding opportunities in emerging markets1.  By 2015, China will represent 20% ($27B) of the market in luxury goods, and MNCs like Marc Jacobs cannot afford to hesitate in penetrating this emerging market2.  The Chinese view these high-end products as “trophies of success” and are worn as such3.  Labels and visible brand symbols are critically important for show in public, but rarely of value in the home. While this new market opportunity presents promising avenues, the Chinese market is known for its battles with infringement through counterfeiting, parallel importing, or unauthorized selling of goods.  Companies like Marc Jacobs are forced to address this issue head on and seek ways within their global strategy to develop solutions.

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  • The ABC’s of Aviation: Airbus, Boeing, China

    COMACA corporate strategy article by Thunderbird students Brett Davis, Don Dennis, Tras Obsuwan, Kyungwhan Park and Ryan Wegner

    How comfortable would you feel if you boarded an aircraft that was entirely developed, manufactured, and assembled in China by a wholly-owned Chinese company?  That reality may occur in the near future. With global industry revenue projected to increase to $4 trillion by 2029[i], of which approximately 12% [ii] is expected to occur in the Chinese market, new competitors are quickly strengthening their positions in the historically duopolistic airline industry. Amongst these players is Commercial Aircraft Corporation of China (COMAC), a Chinese state-owned aircraft manufacturing company, which is focused on fiercely competing with industry leaders Boeing and Airbus. COMAC’s aspirations are to obtain market share and at the behest of the Chinese government reduce the country’s reliance on foreign airline manufacturers.

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  • Beneath the (Under) Armour: A Green and Ethical Company?

    Home_brandingUnder Armour (UA) competes in an industry that faces ethical challenges in all operations.  The ethical standards of UA span to all sectors of the business to include the following: product production, manufacturing, operations, and global aspects of the corporation. Yet, UA is leading the way in concurring ethical challenges through successful tactics that make them stand out from competitors.  UA is a market leader, not only in innovation, but in ethical standards, eco-friendly operations, and business practices, throughout the active wear industry.

    Athletic Apparel: A Tainted Industry?

    True to the apparel industry, active wear has not been immune to labor issues as outsourcing to less developed countries has introduced questionable practices and possible human rights violations.  The lack of environmental and human labor regulations has given the industry a suspect reputation and often times a stigma that, “no news is good news” for the industry’s human labor practices.

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  • How do you say Caterpillar in Chinese?

    Caterpillar in China and IndiaBy Edward Matloub, Thomas McIntyre, Peter Rohlfer, Caelie Fryers, Bert Valencia Jr. and Aditya Koyyalamud

    Caterpillar has survived the recession and enhanced its global presence, but at what cost? Caterpillar is a quintessential American company with a highly differentiated brand that is recognized for quality and dependability. Founded in 1925, as a result of the merger of the Holt Company and C.L. Best Tractor Trailers, the company has left an indelible mark on American society. The Holt Company gained notoriety during the First World War with the production of heavy-duty tractor-trailers. The company also produced other machinery during World War II to build bridges, airstrips and an entire logistical network used to support the Allies. This cemented the company’s position as an all-American brand capable of attaining the highest quality. This image has remained with the company for three generations, and in 2008 Global Brands ranked Caterpillar number sixty-eight out of the top one hundred global brands. Despite this rich legacy, the firm operates in a highly competitive industry and is at a crossroads which will determine the future of the company and potentially re-define its image throughout the world.

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  • Lockheed’s Joint Strike Fighter: Are you paying too much for your fighter jet?

    High Price tag: The F-35 Joint Strike Fighter, unveiled at a ceremony in Washington, is part of the most expensive weapon program in history. Photo: APBy Dawn Swearingin, Rohan Verma, Jameson Neuhoff, Travis Wattles, Priyanka Jain and Wei Zheng

    One of the few positive outcomes of the current financial crisis is the emergence of taxpayers as informed stakeholders in the activities of government. The U.S government, mindful of this development, is conceivably more cautious when allocating funds to its different departments. One exception is the Department of Defense, which has consistently seen on average a rise of 5 percent in its budget allocation throughout the last decade, whereas most other departments have faced major reductions.

    This is partly understandable due to the geo-political scenarios in Iraq, Afghanistan and North Korea. As this is a matter of national security, it does provide a plausible explanation of why it has not attracted the wrath of taxpayers and media activists yet. But, have you ever wondered whether this increased allocation is justified on the basis of national security alone, or are there glaring inefficiencies in the Department of Defense that drive up project costs and timelines?

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