Thales Group: History, Business Structure And Strategies

Thales Group Overview

Discuss about the Business: A Research Portfolio Of Thales Group.

Digital transformation has become a significant shift in not only the social landscape but also in the modern corporate world. It has brought significant changes in how most companies or business work and deliver services and solutions to their customers. It has impacted on the way companies develop their strategic plans in a bid to achieve their strategic goals. The modern corporate world has been faced with increased competitiveness which requires most companies to strategically position themselves in developing effective business plans which will give them a competitive edge in the market or industry they are operating (Fernandez et al. 2014, p. 228). Most companies or organizations have been focused on understanding and developing their internal environments by focusing on their inner strengths and weaknesses which include the company resources and competencies. The success of any organizations is therefore dependent on its ability to develop and implement effective strategies. This report seeks to provide an understanding of the Thales Group with the aim of understanding its origin, its business structure as well as the developed business strategies helping the company achieve their strategic goals and remain competitive in the industry they operate.

Thales Group is a multinational company having operations in 56 countries however it is a French-based company with most of the activities in France. The company is engaged in the design, manufacture, and provision of electrical systems for markets such as the aerospace, defense, and security as well as the transportation markets with the aim of making the world a safer place. The company was founded in the year 1968 through a business merger of the Thomson Brandt with the CSF Company (Compagnie Generale de Telegraphie San Fil (Botelho de Sousa et al. 2014, p. 14). However, these companies were operational before the year 1968 with the Thomson Brandt Company having been founded in the year 1893 while the CSF Company was established in the year 1918. Both companies boasted of success in different fields with the Thomson Brandt Company leading in the power generation and transport while the CSF Company is leading in broadcasting services.

The company is a leading player in French high technology industry with over 70 operational sites in 7 different regions where it has been able to employ 34 000 employees. Globally it has operations running in 56 countries where it has operated 64, 000 employees. With such data, it is evident that over 50 percent of the activities are based in France (Allal-Chérif & Bidan, 2017, p. 34). Over the years the company has been able to develop excellent relationships with their local customers making the group a significant player in its local counties such as France, Australia, United Kingdom, Canada, United States and the Netherlands. The company has been able to expand its operations and business in Asia, South America, and the Middle East for company strategic purposes of growth and taping to emerging markets.

Business Operations

The principal company activities are based on aerospace, space activities, transport, defense, and security as well as market-specific solutions. Through their team of experts comprising of over 5000 IT engineers and over 200 exerts in cyber protection the company has gained significant recognition for its capacity to develop dual civil and military technologies (Gerow et al. 2014, p. 1024). The global company sales are estimated to be $ 12.7 billion according to the company 2016 sustainability report with the defense and security activities recording $ 6.4 billion, transport 1.5 billion while the aerospace activities marked sales return of $ 4.7 billion. France recorded sales returns of 28%, UK 11% while the rest of Europe recorded sales return of 21%. The company has been built with careful strategic planning that has enabled it achieves most of the company strategy and growth objectives.

PESTEL also was known as PESTLE is a strategic analytical tool used by most businesses for strategic planning and plays an essential role in helping most organizations understanding the factors influencing their firms from the external environments. Such knowledge puts the companies or businesses in a strategic position to maximize the available opportunities and minimize the threats to the organization resulting from the external environments they operate in (Foreman & Gurugubelli, 2015, p. 97). The acronym stands for political, economic, social, technological, legal and environmental influences for business operations.  

POLITICAL	ECONOMIC	SOCIAL	TECHNOLOGICAL	ENVIRONMENTAL	LEGAL
1.The growing populist sediments 2. Political tensions	1. Dynamic defense budgets 2. currency volatility and Brexit effect	1. increasing aviation demands 2. growing urbanization	1. development of cross over technologies 2. differentiation of innovations as a competitive advantage	1. call for innovative solutions to curb climate change 2. global shift towards the use of renewable energy	1.intellectual property rights 2. the new quality management regulations

Environmental factors or influences: the global markets and many governments have engaged in strategies aimed at improving and conserving the environment. Therefore most innovations by the company are required to offer solutions which will help in curbing climate change. The French economy has shifted its strategic economic goals to meet international environmental conservation regulations by moving into the use of renewable energy. Thales Company has been committed to reducing carbon emissions, limiting discharge and reducing wastes as well as reducing the consumption of natural resources.

Political influences: globally there have been reported cases of increased political tensions as well terrorist activities have increased cost governments concerns about keeping their people safer. Most governments have therefore focused on the acquisition of privatized security services instead of developing their existing capabilities. This has provided the company with an opportunity to venture into these markets and provide security and defense systems to such markets (Wheelen et al. 2017, p. 26). The organic populist sediments have also impacted the operations of the company negatively in various landscapes since they have promoted anti-globalization ideas as well regional divisions. The company needs therefore to develop effective strategies to deal with these ideas since they act as a threat to the business growth.

PESTEL Analysis

Economic influences: Most governments such as the United States, UK, and Australia governments have had tight budgets whereas other countries such as the Middle East countries and India have increased their defense and security budgets. The company, therefore, has to develop effective strategies aimed at venturing into these markets with high budgets for military and defense systems. Currency volatility has affected most Europe and United Kingdom countries due to the impact of Brexit and therefore or making the pound and dollar appreciate (Goztepe et al. 2014, p. 16). This has exposed the country into a significant rivalry regarding their exports from countries such as China in offering military and defense equipment.

Legal influences: There have been increased concerns over regulations of quality information technology services and innovations. Globally the international markets have embraced the use of the revised quality management regulations. There are also increased concerns over increased intellectual property rights protecting innovations. Such standards and regulations require the company to invest more in the production of quality products and services.

Technological influences: with the rapid growth in technological advancements there is a need for the company to keep up with the current technologies. There has been increased development of crossover technologies and innovations which have been differentiated are now considered to present a competitive advantage in the Thales markets. There is a need therefore for Thales Company to adopt technologies which will give the company a competitive advantage in the industry.

The Aerospace, transport, defense and security markets or industries are intensely competitive globally as the world seeks to intensify various mechanisms of making the world safer. With increased technology and different resource, endowment competition has increased, and competitive advantage is achieved by companies which offer quality services to solve various market problems (Fleisher &  Bensoussan, 2015, p. 68). The porters five forces analysis provides an assessment of the competitiveness of industry in developing corporate strategies. The five forces used in the evaluation include; the supplier power, the buyer’s power, competitive rivalry, threat of substitution and the risk of new entry. Thales main competitors include the Boeing Company as well as the BAE Systems Company.

The Boeing Company is the most significant aerospace company globally with revenue of $ 94.6 billion and therefore regarding supplier’s power the company has few suppliers and hence has been able to control their power in the market giving the company an advantage. It has employed over 140 000 employees globally and does not relies on specific high purchasers of their products however their services are diversified enabling the company to control the buyer’s power. Regarding competition the company is very competitive regarding quality service provision and increased innovative solutions primarily in the transport market (Foreman, J.C., and Gurugubelli, D., 2015, p. 367). It does not face the substantial threat of substitution however different airlines such as the Canadian airlines, Australia airlines; Lock Heed Martin company has increased competition to the company by offering short distance aerospace services. But regarding new entry into the market, the company is more competitive and does not face a significant threat from new or emerging companies.

Porter’s Five Forces Analysis

The BAE systems Company has a higher revenue compared to the Thales Company of $ 22.3 billion and has been able to employ over 83 000 employees. The company also operates in the same markets as Thales Company and has an average supplier power with most of the company suppliers influencing the company decisions. The buyer power has been controlled since the company serves most of the medium and small-scale purchasers and has few high purchasers. The company is competitive in the industry and has been able to rival Thales Company regarding sales returns. The company also faces the threat of new entry from small companies offering the same products to the small and growing markets globally.

Australia has been in the forefront to address the defense and military systems of the country.  Thales had developed the Bushmaster vehicle which was used for defense and security purposes. However due to increased security measures the company has sought to create new machines with the new protected mobility as the new business strategy through the development of the Hawkei in Thales protected vehicle division in Bendigo (Khan et al. 2015, p. 958). The plan is aimed at creating a future defense capability for the Australian governments as well as to other countries. The advantage of having this new protected vehicles include increased mobility of the car allowing soldiers to penetrate harsh conditions, the vehicle is well protected, increased lethality and has increased survivability compared to the Bushmaster. The Hawkei provides unparalleled situational awareness and also incorporates very high levels of ballistic and blast protection. However, the technology used to develop these military and defense systems is very expensive for the company but offer quality services. It has enhanced defense and military facilities in Victoria and ranked the Australian Military and defense systems very high in the global map.

Thales cybersecurity division in Canada has developed a business strategy that seeks to deliver safety, secure and resilience services to any company or organization critical infrastructure. The division has developed cutting-edge security strategies through cryptographic security products aimed at offering optimal performance for securing critical information systems. The company has specialized in providing end to end information security for organizations or businesses in not only preventing and detecting attacks but also in helping the systems react rapidly to the attacks (Pestle et al. 2014, p. 102). The division has also engaged in the development of entirely secured information systems throughout their life cycle to help the businesses master critical data. The company has been able to attract a team of over 5000 essential IT engineers as well as 2000 experts in cybersecurity. Despite having these experts, the division seeks to attract the best human talents, and this can only be achieved through developing practical, innovative strategies and reward systems for the division employees.

Over the period of operation, the company has been able to develop specific strategic relationships aimed at improving the performance of the company. One of the benefits resulted from having the French state become a shareholder in the company by owning individual rights in the form of golden share. This has enabled the company to enjoy constant support from the state as it is the only French company by which the state owns shares. Secondly, the company has benefited from the strategic relationship of a business merger with the CSF Company which helped the company in improving their broadcasting and communication information systems (Lawrence & Braddon, 2017, p. 37). Lastly, the company was able to acquire the `Quavers Company which has helped the company in enhancing their essential data analysis in a bid to strengthen their cybersecurity services.

Conclusion

The development of strategic business plans is very vital for business growth. The effectiveness of a company and its ability to remain competitive in the industry is determined by the company able to develop effective business strategies. From the above research portfolio, Thales Company can be said to having an action plan aimed to provide defense and security systems. However, there is a need to attract best talents in their various divisions to enhance their innovative capabilities with the aim of improving their competitiveness in the industry and rival their competitors.

List of References

Allal-Chérif, O. and Bidan, M., 2017. Collaborative open training with serious games: Relations, culture, knowledge, innovation, and desire. Journal of Innovation & Knowledge, 2(1), pp.31-38.

Botelho de Sousa, T., Soares Camparotti, C.E., Müller Guerrini, F., da Silva, A.L. and Azzolini Júnior, W., 2014. An overview of the advanced planning and scheduling systems. Independent Journal of Management & Production, 5(4).pp. 14.

Fernandez, A.S., Le Roy, F. and Gnyawali, D.R., 2014. Sources and management of tension in co-opetition case evidence from telecommunications satellites manufacturing in Europe. Industrial Marketing Management, 43(2), pp.222-235.

Fleisher, C.S. and Bensoussan, B.E., 2015. Business and competitive analysis: effective application of new and classic methods. FT Press.pp. 68.

Foreman, J.C. and Gurugubelli, D., 2015. Identifying the cyber attack surface of the advanced metering infrastructure. The Electricity Journal, 28(1), pp.94-103.

Gerow, J.E., Grover, V., Thatcher, J.B. and Roth, P.L., 2014. Looking toward the future of IT-business strategic alignment through the past: A meta-analysis. Mis Quarterly, 38(4), pp.1059-1085.

Goztepe, K., Kilic, R. and Kayaalp, A., 2014. Cyber Defense In Depth: Designing Cyber Security Agency Organization For Turkey. Journal of Naval Science and Engineering, 10(1), pp.1-24.

Khan, U.A., Alam, M.N. and Alam, S., 2015. A critical analysis of internal and external environment of Apple Inc. International Journal of Economics, Commerce and Management, 3(6), pp.955-961.

Lawrence, P. and Braddon, D., 2017. Strategic issues in European aerospace. Taylor & Francis.pp. 37.

Nag, B., Han, C. and Yao, D.Q., 2014. Mapping supply chain strategy: an industry analysis. Journal of Manufacturing Technology Management, 25(3), pp.351-370.

Pestle, W.J., Crowley, B.E. and Weirauch, M.T., 2014. Quantifying inter-laboratory variability in stable isotope analysis of ancient skeletal remains. PLoS one, 9(7), p.102.

Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy. pearson.pp.24-32.