Business Strategy of Zodiac, a company specializing in aerospace
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Zodiac is a French company that has existed for over a 100 years and over the years, it has specialized in the aerospace sector. Indeed, its founder Maurice Mallet was the inventor of the first airship in 1896 and he acquired many acquisitions for Zodiac which has now become a leader in several markets, all oriented around aviation.
The development strategy of the company kept diversifying through acquisitions aggressively. Indeed, Zodiac has bought several companies that were leaders and challengers in the market and Zodiac has now become the new leader in the market. Today's aerospace business represents over 90% of the turnover of the company, it includes four parts: Aero-safety Systems, Aircraft Systems, Cabin Interiors and Technology. However, the aviation market is experiencing some difficulties in view of economic conditions.
The problems for weapons are just like the aerospace market, which tends to decrease in view of declining defense budgets of OECD countries. So this makes one wonder what will be the new development strategy of Zodiac which is already the market leader in many markets. These markets are meanwhile struggling and some are even undergoing a downturn.
In addition, new purchases would be extremely expensive. Will the company Zodiac be able to pursue its external growth? How will society assert its position as a firm? The company positions itself as a supplier to aircraft manufacturers, airlines, governments, armies and others. However, it happens to buy raw materials and semi-processed materials from suppliers, but it has a greater bargaining power with these 'small' suppliers. Finally, by conducting an aggressive upstream growth, the company may enjoy bargaining power over suppliers.
Most customers of Zodiac correspond to major clients (military, airline etc.) which have enormous bargaining power. The peculiarity of the contracts signed between Zodiac and the major contractors is that they can settle over several decades which makes trading even more vehement. However, by acquiring companies specializing in certain areas, Zodiac becomes more and more a reference in the aeronautics sector, it gains in popularity and thus may benefit from a little bargaining power with its largest customers.
Zodiac is a specialist, and has been for many years, its reputation is well established. In addition, new entrants are faced with many barriers.
Financial barriers such as: the aerospace market represents huge sums in terms of both turnover and in terms of investments. There are also technological barriers: the mastery of new technologies, research and development, the race for innovation, safety skills etc. which are vital in the aerospace sector and are not accessible to 'non-specialists'.
The Zodiac Group has internationalized over the years through the implementation of appropriate and always relevant strategies.
It also owes its success to its inventive and daring engineers, especially ballonniers. But still, the company has maintained the character of a family by listening to its employees who were motivated and that adhered to the philosophy of the group. Their involvement was crucial in the successful development activity of Zodiac.
In terms of marketing strategy, the Zodiac Group has established itself as highly specialized, often with high technological potential. Growth through acquisitions (external growth) is a major focus of the group's strategy.
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