Globalization strategy

A European aerospace and defense leader had developed a global presence in commercial aircraft, defense systems, helicopters, missiles, electronics, and space. This organization recognized the increasing reality of globalization, brought about through the growth of a capable but low cost supply base in Asia, Eastern Europe, and South America.

Challenge
The organization wanted to understand both the merits and challenges of this trend in order to make strategic decisions on new market access and sources of supply, and the potential risks and benefits. In particular, they needed to better understand the ambitions of the new “Tigers” for building indigenous aerospace industries to compete, eventually, with the West. Consequently, they launched a company-wide Globalization Project.

Approach
A.T. Kearney was invited to identify and assess the globalization experiences of 20 aerospace and non-aerospace companies in six target countries. They were asked to create benchmarks of best practice and key success factors, and draw conclusions and recommendations to support strategic decisions for the aerospace sector.

To deliver leading-edge insights, A.T. Kearney developed globalization scenarios, covering political, demographic, and economic trends for each country around which the conclusions could be considered. The selected companies were typically associated with high-capex programs and included aerospace, automotive, power, rail, and energy sectors. An assessment framework was designed to assess organizational, operations, management, and technology criteria. This framework covered the globalization life-cycle from preparation, to entry, through maturity.

Through research, interviews, and input from global experts in the industries and companies involved, we were able to draw powerful conclusions in areas such as:

• Investment
• Technology and Intellectual Property Rights
• Political and Partnering
• Organization and Human Resources
• Country-specific key success factors

Results
As a result of documented conclusions and a number of workshops in which leading industry practitioners were able to pass on their insights to the client’s senior decision-makers, the company was able to refine their globalization strategy for country selection, acquisition and partnering imperatives, supply chain and manufacturing, and penetration approaches.