Bombardier Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Bombardier Case Solution

Attractive acquisition target for Bombardier

There are many reasons and attributes of CARRANZA that makes it an attractive acquisition target for Bombardier. Firstly, the acquisition of CARRANZA results in the increase in the revenues and profits of the Bombardier, it can be said that the management of Bombardier is keen to increase the sources of revenue and wants aggressively to increase the domination in the market. It is anticipated that acquisition of CARRANZA can help the management of Bombardier to achieve their intended purpose. On the other hand, the acquisition will also increase the skills of the key members of the Bombardier, the fact that CARRANZA is involve in the manufacturing of complex systems which are used in the trains makes it highly possible that management of Bombardier will get benefit from the acquisition of CARRANZA.

Another reason which is enforcing the management of Bombardier to acquire CARRANZA is that it is highly likely that the shares of CARRANZA are trading at a substantially lower value because of the consecutive losses it was generating. However, the generation of losses doesn’t mean that the CARRANZA don’t have potential to generate profits, given the fact that management of Bombardier is very successful in the turnaround of the performance of the companies makes it an attractive target for acquisition.

Overall Business Strategy

It can be said with certainty that acquisition of CARRANZA fits with the overall business strategy of the Bombardier Transport. The management of Bombardier has adopted a strategy to aggressively pursue inorganic growth from its initial days, since its incorporation, Bombardier has acquired many companies within the sector and outside the sector as well. Many of the acquired companies are not performing well at the time of acquisition, however, by making continuous efforts, the management of Bombardier has successfully turnaround the performance of those companies. As there are just four key players in the rail business in Europe, the market was only shared by those companies, CARRANZA and Bombardier are two of them. By acquisition of CARRANZA, Bombardier would be able to reduce the competition to acceptable lower level which helps the management top fulfill their ultimate goal or business strategy i.e. maximizing the wealth of shareholders.

Bombardier Harvard Case Solution & Analysis

Arguments against the proposed acquisition

Arguments for the Acquisition:

Acquisition of CARRANZA will result in numerous benefits towards the Bombardier; firstly Bombardier would be able to obtain economies of scale by combining the marketing and administrative function of both companies. Furthermore, Bombardier will also negotiate better with the suppliers and finance providers as it is now a much bigger company. In addition to this, the current systems of manufacturing the trains might be improved in both the companies because of the integration and communication between two of the largest train producers in the world. Moreover, the competition will also be reduced as the number of companies which are manufacturing the trains will be reduced and some serious competitive advantage will be gained by Bombardier because of the acquisition. Currently, CARRANZA is finding it difficult to maintain the quality and reliability of its trains, the reliability and quality will be improved of the trains of CARRANZA because of the association with the producer of high-quality trains...........

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Bombardier Harvard Case Solution & Analysis