New Entrants:
Threat of new entrants for Bombardier in Canada is found to be moderate as it is difficult for the new entrants to enter in the market because of the existing giants like Chinese and Russian companies. Further, the cost to enter in the market is high along with massive capital investment. According to the data given in the case, the cost related to Cseries was more than $100 million by the end of 2007 along with $2 billion of the overall cost. Further, giants in the industry were enjoying economies of scale and already reached at the lower end of the learning curve.
Supplier Power:
The bargaining power of suppliers is found to be on the lower side because the regulatory bodies have embossed high-quality standards that cannot be overseen by the suppliers. Suppliers do not have the option to make any compromise on the quality of equipments used in the industry. Further, the industry is full of providers who are engaged in supplying 55000 components of the airplane.
Buyer Power:
Bargaining power of customers for Bombardier is found to be low because the buyers don’t have many choices, and thus, they have to limit themselves into few companies. Limited powers to buyers have a positive impact on the companies and have a momentous impact therefore; one has to put more weight for this attribute.
Threat of substitutes:
Threat of substitutes is found to be low because Performances of the other means of transportation are not superior to the airline industry, thus; there is less chance that the customers will switch to another substitute. Further, substitutes that are available are of low quality that would never be a consumer’s priority.
Industry Rivalry:
Competition in the aerospace industry has been intensified with the passage of time. Now, technology advancement and increased number of travelers has increased entity’s interest in the industry. Along with that, there are high barriers to entry because of the four major rivals in the industry that include Boeing, Airbus, Bombardier and Embraer.
In addition to that, the company is encountering with several environmental concerns as well that are affecting the operations of Bombardier. These factors include strict environmental regulations, the credit crunch in the financial market and intense competition.