In order to examine external factors that can affect Bombardier’s business operations, our group conducted a PEST analysis. The acronym PEST stands for the external political, economic, social, and technological factors that affect a company’s business activities. Moreover, the PEST framework is a business tool that helps a company improve its decision-making and timing.
The political risk that Bombardier faces is due to foreign government regulations, relations between the Canadian federal government and foreign governments, and the amount of government intervention that occurs in foreign markets. Specifically, strict regulations that are imposed by a foreign government within a market that Bombardier operates in can pose a negative effect on the firm’s revenues, such as pricing restrictions or increased taxes. International relations between the Canadian federal government and foreign governments within the markets that Bombardier operates in can pose a threat to the firm’s revenues. For example, if relations between Canada and China turn sour, Chinese state-owned airlines may opt to purchase aircrafts and trains from a non-Canadian manufacturer, as a result. Government intervention could perhaps have either a positive or negative effect on Bombardier’s global operations. For example, if the Chinese government were to increase spending on domestic air travel, this would lead to a greater demand for aircraft, which could potentially lead an increase in sales for Bombardier in the Chinese market.
The economic risk that Bombardier faces is due to several factors. Firstly, the economic policy that a foreign or domestic government initiatives in a market where Bombardier operates in could have a positive or negative effect on the firm. For example, if a domestic or foreign government decides to slash subsidies for national airlines, this could potentially