Global Strategy In Our Changing Aerospace Environment Stanford Ibc April 17 2010
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Transcript of Global Strategy In Our Changing Aerospace Environment Stanford Ibc April 17 2010
Global Strategy Global Strategy In Our In Our
Changing Aerospace Changing Aerospace EnvironmentEnvironment
Carrie KendrickCarrie KendrickDirector of Global Strategy for Aerospace Quality, Director of Global Strategy for Aerospace Quality,
Honeywell International, Aerospace Integrated Supply ChainHoneywell International, Aerospace Integrated Supply Chain
April 17, 2010April 17, 2010International Business Conference, Stanford UniversityInternational Business Conference, Stanford University
© Copyright Carrie Kendrick 2010© Copyright Carrie Kendrick 2010
Session Expectations
1) You will not become an expert on Aerospace Industry, Honeywell’s business or Strategy Development
2) You will gain perspective and thought-provoking examples transferrable to your business
3) You will have time to ask questions about my experience
Discussion Overview
International v. Global Business
Creating Dynamic Strategy
Translating Vision to Execution
Pop Quiz
True/False: Synonyms?– International
– Global
– Worldwide
– Multinational
– Transnational
Answer: Not in your business strategy!
International v. Global Business
Location, Location, Location
Many Aerospace Customers– Commercial Air
Transportation
– Business and Private Aviation
– Militaries
– Space
– New aircraft and maintenance
Many Different Regulations– US Government Agencies
– Export /Import Laws– Federal Aviation Regulations– Sales to non-US militaries– NASA
– Europe– China– India– …
Global Trends v. Country-Specific Needs
International v. Global Business
Strategy by the Book
Textbook Strategy:– Boston Consulting Group’s “Growth-
Share Matrix” c. 1970
– Michael Porter’s Five Forces Model
– Honeywell International CEO Dave Cote:
“Great Positions in Good Industries”
– Static frameworks = a snapshot in time
– Concept of “change” lightly treatedBusiness is Dynamic, Strategy Must Change!
Creating Dynamic Strategy
←Industry AttractivenessMarket Share ↑ Market Share ↓
Bu
sin
ess
Str
eng
th →
↓Gro
wth
↑
Gro
wth
Drivers of Change
• Customer demand, expectations evolve– Cheaper, Better, Faster (Ubiquitous!)
– New customers in growth regions, governments (i.e. China increasing air travel, Brazilian EMBRAER, Canadian Gulfstream in air transport)
– Changing government priorities (i.e. wars on terrorists v. nations, NASA Constellation program cancellation)
• Regulatory trade barriers rise/fall– Reconsideration of Export Restrictions by Obama administration
– Tariff and Tax positions in multiple countries (i.e. France works council)
• Workforce demographic shifts– Aging workforce in industry, difficulty hiring welding apprentices, etc.
External forces are always shifting
Creating Dynamic Strategy
Change Strategy with Purpose
Existing Strategic plan did not recognize this opportunity –
2) How do you identify the opportunities? – Embed an operating system for regular review of strategy
– Acknowledge that the strategy is not written in stone
– Identify resources responsible for looking outward
3) How do you decide whether to change strategy?– Is this opportunity consistent with the core growth strategy?
– Would this opportunity put other opportunities at risk?
– What is the cost of not pursuing this opportunity?
External forces shift – How do you respond?
Creating Dynamic Strategy
From “What” to “How”
• Strategy includes both end state vision and path to achieve it
• Current Example: Honeywell Aerospace and the C919 AircraftChina’s COMAC to build a narrow-body airliner like Airbus A320, Boeing 737
What is needed to win/grow/maintain that business?– Regulatory relationships with Civil Aviation Authority of China
– Physical presence (factories, capable suppliers, work force)
– Organization change to support new business, integrate with existing
– Design team working with local business partners
– Language and cultural training and interpreters
– People with expertise in all areas of our business, to travel and train
– Money, money, money! But precisely for what, when, and from/to whom?
Translating Vision to Execution
Convey the Vision, Translate to a Strategic Plan
Outsourcing, Off-shoring, Other “Bad” Words
• Restructuring: Why we do it– Position near customers, suppliers
– Positive net present value
– Acquire new “star” technologies, markets, talent
– Divest the portfolio “dogs”
– Positioning for competitiveness
• Executing it well is always difficult– Financial models can help remove emotion from decision making
– Sensitivity and risk analysis improve fidelity of financial models
– Leadership in transition is necessary to achieving expected value
– Example: Closing Montreal Honeywell Aero facility in 2008Restructuring is Key to Competitiveness
Translating Vision to Execution
Final Thoughts
• Every industry and business is unique, however the concepts are transferrable
• Use these and other industry examples to provoke thought in your arena
• Approach business dynamically, there is no one permanent solution for your business
• Change is inevitable, make yours purposeful
Open Discussion
• Connect with Carrie– Slides downloadable via LinkedIn
http://www.linkedin.com/in/carriekendrick
– Email questions, thoughts to [email protected]