Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Aerospace industry adapts to global marketplace

21.03.2013
Concordia study says future of aircraft manufacturing rests on increased attention to market development

The aerospace industry is a key sector of the Canadian economy. With sales of over $22.4 billion in 2011, Canada ranks fourth globally in aerospace production. Nearly half of that revenue was generated in Quebec, where Montreal is one of the few places worldwide in which all the components needed to assemble an aircraft are available within a single metropolitan area.

To determine whether Canada can keep up with the global pace, Industry Canada commissioned a study to evaluate how well Canadian aerospace firms, both large and small, are adapting to the changing marketplace. The research was conducted by Isabelle Dostaler, a professor in the Department of Management at Concordia’s John Molson School of Business. The results, published in Operations Management Research, indicate that by adopting a “smaller is better” attitude, Canadian aerospace companies can to adapt to their new business environment.

In recent years, the aerospace industry has undergone major changes. The development and assembly of aircraft is now divided between numerous companies, with a handful of large manufacturers, like Bombardier, acting as “system integrators” — meaning that they assemble large sections designed and manufactured by their suppliers to produce a complete aircraft. With globalization on the rise, the competition to be part of that supply chain is more intense than ever. Canadian aerospace suppliers often find themselves in competition with suppliers based in China, Brazil or Mexico, where labour costs are lower.

To conduct her study, Dostaler interviewed executives from several Canadian aerospace companies about best practices for winning contracts in this new business environment. She asked them about their particular business strategies and assessed the fit between their capabilities and the key success factors to win contracts in the industry. Respondents emphasized the increased pressure to keep costs low and added that dependability and quality were also critical concerns.

Dostaler’s research reveals that successful aerospace companies pursue what is known as an “integrated low-cost differentiation strategy” which means that they provide a higher-quality product at a price that is still reasonable. In the new competitive landscape, buyers are no longer willing to pay a premium to buy differentiated products. By using the integrated business strategy, seven of the 13 companies studied created a good fit between their capabilities and the changing market; four more achieved an average fit.

This is encouraging news, but interview questions about the firms’ weaknesses suggested room for further growth. Many companies saw their relatively small size as a weakness in the current industry structure. That’s because the large manufacturers prefer to work with partners who can share the risks in new business ventures. The smaller the company’s size, the more risk-averse it’s likely to be.

The combat this situation, Dostaler suggests that “it might be time for smaller Canadian aerospace companies to focus more on market development.” She also thinks that they should develop a marketing plan to convince large global companies that “small is beautiful.” This may be the piece of the puzzle that is missing from some firms’ efforts to adapt to changes in the industry.

Dostaler thinks that government policies should be used to encourage the aerospace industry to recognize the competitive threat of emerging economies. Says Dostaler, “If Canadian aerospace companies could form a cohesive group, their collective strength would be greater than the sum of their individual talents – meaning a great outcome for the industry.”

Source:

Cléa Desjardins
Senior advisor, media relations
University Communications Services
Concordia University
Phone: 514-848-2424, ext. 5068
Email: clea.desjardins@concordia.ca
Web: concordia.ca/now/media-relations
Twitter: twitter.com/CleaDesjardins

Clea Desjardins | EurekAlert!
Further information:
http://www.concordia.ca

More articles from Studies and Analyses:

nachricht Multi-year study finds 'hotspots' of ammonia over world's major agricultural areas
17.03.2017 | University of Maryland

nachricht Diabetes Drug May Improve Bone Fat-induced Defects of Fracture Healing
17.03.2017 | Deutsches Institut für Ernährungsforschung Potsdam-Rehbrücke

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: A Challenging European Research Project to Develop New Tiny Microscopes

The Institute of Semiconductor Technology and the Institute of Physical and Theoretical Chemistry, both members of the Laboratory for Emerging Nanometrology (LENA), at Technische Universität Braunschweig are partners in a new European research project entitled ChipScope, which aims to develop a completely new and extremely small optical microscope capable of observing the interior of living cells in real time. A consortium of 7 partners from 5 countries will tackle this issue with very ambitious objectives during a four-year research program.

To demonstrate the usefulness of this new scientific tool, at the end of the project the developed chip-sized microscope will be used to observe in real-time...

Im Focus: Giant Magnetic Fields in the Universe

Astronomers from Bonn and Tautenburg in Thuringia (Germany) used the 100-m radio telescope at Effelsberg to observe several galaxy clusters. At the edges of these large accumulations of dark matter, stellar systems (galaxies), hot gas, and charged particles, they found magnetic fields that are exceptionally ordered over distances of many million light years. This makes them the most extended magnetic fields in the universe known so far.

The results will be published on March 22 in the journal „Astronomy & Astrophysics“.

Galaxy clusters are the largest gravitationally bound structures in the universe. With a typical extent of about 10 million light years, i.e. 100 times the...

Im Focus: Tracing down linear ubiquitination

Researchers at the Goethe University Frankfurt, together with partners from the University of Tübingen in Germany and Queen Mary University as well as Francis Crick Institute from London (UK) have developed a novel technology to decipher the secret ubiquitin code.

Ubiquitin is a small protein that can be linked to other cellular proteins, thereby controlling and modulating their functions. The attachment occurs in many...

Im Focus: Perovskite edges can be tuned for optoelectronic performance

Layered 2D material improves efficiency for solar cells and LEDs

In the eternal search for next generation high-efficiency solar cells and LEDs, scientists at Los Alamos National Laboratory and their partners are creating...

Im Focus: Polymer-coated silicon nanosheets as alternative to graphene: A perfect team for nanoelectronics

Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are less stable. Now researchers at the Technical University of Munich (TUM) have, for the first time ever, produced a composite material combining silicon nanosheets and a polymer that is both UV-resistant and easy to process. This brings the scientists a significant step closer to industrial applications like flexible displays and photosensors.

Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

International Land Use Symposium ILUS 2017: Call for Abstracts and Registration open

20.03.2017 | Event News

CONNECT 2017: International congress on connective tissue

14.03.2017 | Event News

ICTM Conference: Turbine Construction between Big Data and Additive Manufacturing

07.03.2017 | Event News

 
Latest News

Researchers shoot for success with simulations of laser pulse-material interactions

29.03.2017 | Materials Sciences

Igniting a solar flare in the corona with lower-atmosphere kindling

29.03.2017 | Physics and Astronomy

As sea level rises, much of Honolulu and Waikiki vulnerable to groundwater inundation

29.03.2017 | Earth Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>