Marketing Audit: BAE Systems Regional Aircraft Division
Overview of BAE Systems Regional Aircraft and Market
“BAE SYSTEMS has a proud heritage that dates back to the early days of manned flight and wireless communications.” (BAE Systems, 2011)
BAE Systems Regional Aircraft was a major manufacturer of aircraft such as the Avro family of regional jets including the 146 and the Jetstream 31 and 41 as well as turbo prop aircraft. These aircraft achieved much success especially in Europe and the US market as the regional airline passenger market took off in the late 1980s and throughout the 1990s. However, despite the favourable factors at play such as new regulations which liberalised the market through open skies policies, no one could have predicted the 9/11 terrorist attacks on the World Trade Center in New York in 2001 which impacted enormously on the airline market and severely affected all players. Subsequently, regional passenger transport declined at an astounding rate. In addition to these catastrophic events, strategies being pursued by other players, particularly Boeing and Airbus, before and immediately following 9/11, had also changed the competitive environment and had made it increasingly difficult for the smaller players such as Regional Aircraft, Fokker and Bombardier to compete effectively against the bigger players in the market. The demographics of the passenger market had also changed considerably and increases in travel at a more global level ultimately implied that the regional market for aircraft was under threat as airline operators now required larger and more costeffective aircraft to remain competitive and cope with global demand. Consequently, due to the variety of largely negative factors impacting on BAE Regional Aircraft, it took the decision to cease production towards the end of 2001.
Its new strategy was based on
providing an engineering support business from its UK base in strategic partnership with a number of small distributors of spares in the market, primarily Saywell in the USA. The company also retained its asset finance/leasing division which sought to place aircraft with customers globally as well as being active, though on a relatively small scale in comparison to other companies in this sector, in third party aircraft placements.
Marketing Audit Sample
1. Marketing Environment
a. Macro Environment
Political and Legal Environment
Political and legal factors are often perceived in terms of presenting specific threats or challenges to industry but in the case of air travel, in the 1990s, new legislation relating to “open skies” in the USA and in Europe, is regarded as a major factor impacting the sector positively, especially in the case of the low cost carriers. Regional Aircraft was able to benefit from such changes in Europe
More recent factors have impacted negatively for regional aircraft manufacturers as the pressure to be more fuel-efficient and eco-friendly has implied that manufacturers have had to radically alter their business models and produce more fuel-efficient aircraft. While the Regional Aircraft division of BAE Systems no longer manufactures, this impacted directly on its asset management business, as it became increasingly difficult to lease its aircraft as it is not considered to be eco-friendly or fuel-efficient. This is regarded as one of the main reasons as to why the division decided to sell its leasing business in 2011 as it appeared no longer viable for the company or as providing a “strategic fit” (Mintzberg, 1994)
Marketing Audit Sample
“...international aviation is driven in large part by GDP growth and the nature and extent of the economic slowdown...” (Gillen, 2009, pg.3)
Recessionary pressures globally impacted substantially on the sector, with the period 20082009 seeing many airlines going bankrupt. In the case of the maintenance, repair and...