TLDR An Aerospace Component Manufacturer faced rising production costs and declining market share due to aggressive competition and increased raw material prices. By adopting additive manufacturing, establishing strategic partnerships, and launching sustainable products, the company reduced production costs by 15% and increased market share by 8%, highlighting the importance of Operational Excellence and Innovation in addressing core challenges.
TABLE OF CONTENTS
1. Background 2. Industry Analysis 3. Internal Assessment 4. Strategic Initiatives 5. Organizational Behavior Implementation KPIs 6. Organizational Behavior Best Practices 7. Organizational Behavior Deliverables 8. Technological Modernization 9. Development of Strategic Global Partnerships 10. Investment in Sustainability 11. Organizational Behavior Case Studies 12. Additional Resources 13. Key Findings and Results
Consider this scenario: An Aerospace Component Manufacturer, specializing in precision parts, faces significant challenges impacting its Organizational Behavior and market competitiveness.
The company has experienced a 20% increase in production costs while its market share has declined by 12% over the past two years, due to rising raw material costs and aggressive competition from emerging markets. The primary strategic objective is to optimize operational efficiency and expand market share through strategic partnerships and technological innovation.
While the Aerospace Component Manufacturing industry is known for its high barriers to entry and stringent regulatory standards, this organization is contending with operational inefficiencies and a shrinking market share. An initial analysis indicates that these challenges may stem from outdated manufacturing technologies and a lack of strategic global partnerships that could provide access to more cost-effective materials and new markets. Additionally, there seems to be a significant misalignment between the company's current capabilities and the evolving demands of the aerospace industry.
The Aerospace Component Manufacturing industry is characterized by high capital intensity and a slow rate of technological change, which has historically limited the entry of new competitors. However, recent advancements in manufacturing technologies and materials science are beginning to shift this dynamic.
We begin by dissecting the competitive forces shaping the industry:
Emergent trends include the increasing adoption of additive manufacturing (3D printing), which presents both opportunities and risks:
For a deeper analysis, take a look at these Industry Analysis best practices:
The organization possesses a strong track record in manufacturing high-quality aerospace components, but its production processes are becoming increasingly uncompetitive due to high costs and inefficiencies.
Strengths include a well-established reputation for quality and reliability, while weaknesses are seen in high production costs and outdated manufacturing technologies. Opportunities lie in adopting new technologies and forming strategic partnerships, but threats come from intensifying global competition and rapidly evolving technological standards.
VRIO Analysis
The company's commitment to quality and its skilled workforce are valuable and rare, offering a competitive advantage. However, its operational processes and technological capabilities are not sufficiently unique or difficult to imitate, suggesting the need for strategic innovation.
Capability Analysis
Success in the aerospace component market demands excellence in innovation, cost control, and strategic partnerships. The organization's current capabilities align with these requirements in terms of quality and reliability but fall short in technological advancement and global market penetration.
Based on the comprehensive analysis conducted, the management has identified the following strategic initiatives to be implemented over the next 36 months :
KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.
Monitoring these KPIs will provide insights into the effectiveness of the strategic initiatives, guiding adjustments to ensure alignment with the organization's overarching goals and market demands.
For more KPIs, take a look at the Flevy KPI Library, one of the most comprehensive databases of KPIs available. Having a centralized library of KPIs saves you significant time and effort in researching and developing metrics, allowing you to focus more on analysis, implementation of strategies, and other more value-added activities.
Learn more about Flevy KPI Library KPI Management Performance Management Balanced Scorecard
To improve the effectiveness of implementation, we can leverage best practice documents in Organizational Behavior. These resources below were developed by management consulting firms and Organizational Behavior subject matter experts.
Explore more Organizational Behavior deliverables
The organization adopted the Technology Acceptance Model (TAM) and the Balanced Scorecard approach to guide the technological modernization initiative. TAM, developed by Davis (1989), provided a framework to assess how employees would accept and use the new manufacturing technologies. It proved invaluable for predicting and enhancing user acceptance, ensuring a smoother transition to advanced manufacturing processes. Following this insight, the organization undertook several steps:
Simultaneously, the Balanced Scorecard, introduced by Kaplan and Norton, was employed to align technology adoption with strategic objectives. This framework allowed for a multi-dimensional view of the organization’s progress beyond traditional financial metrics.
The combined application of TAM and the Balanced Scorecard facilitated not only the successful adoption of new technologies but also ensured these changes were in alignment with the broader strategic goals of the organization. Employee resistance was minimized, and the organization was able to track the impact of technology adoption on operational efficiency, market competitiveness, and financial performance.
For the strategic initiative focusing on developing global partnerships, the organization utilized the Ansoff Matrix and the Resource-Based View (RBV) framework. The Ansoff Matrix helped in identifying growth strategies through new markets and new partnerships, highlighting areas with the highest potential for market expansion. This strategic tool was critical in determining the direction of the partnership development efforts. The process involved:
The Resource-Based View (RBV) framework complemented this by focusing on leveraging internal strengths to achieve competitive advantage in new markets. This approach emphasized the importance of the organization's unique capabilities and how they could be augmented through strategic partnerships.
Implementing these frameworks led to a systematic and strategic approach to global partnership development. The organization successfully identified and entered into several key partnerships, significantly expanding its market reach and enhancing its resource base. This strategic move not only diversified the organization's market presence but also fortified its competitive positioning through collaborative innovation and shared resources.
In addressing the strategic initiative of investing in sustainability, the organization applied the Triple Bottom Line (TBL) framework and the Blue Ocean Strategy. The TBL framework, emphasizing the importance of balancing economic, social, and environmental performance, guided the organization in integrating sustainability into its core operations. This approach was instrumental in identifying areas where sustainable practices could be implemented without compromising financial performance. The steps taken included:
The Blue Ocean Strategy was utilized to carve out a new market space in the aerospace component industry, where competition was irrelevant. By focusing on sustainability, the organization aimed to differentiate itself and create new demand.
The application of the Triple Bottom Line and Blue Ocean Strategy enabled the organization to not only enhance its environmental and social contributions but also to open up new market opportunities. This strategic focus on sustainability led to the development of innovative products that set the company apart from competitors, driving growth and reinforcing its commitment to responsible business practices.
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Here is a summary of the key results of this case study:
The initiative's results are commendable, particularly in reducing production costs and expanding market share, which directly address the company's primary challenges of high production costs and shrinking market share. The 15% reduction in production costs through technological modernization and the 8% increase in market share due to strategic partnerships are significant achievements that highlight the initiative's success. However, while the launch of sustainable products has increased customer satisfaction, the 5% increase suggests there is room for improvement in market penetration and product impact. The successful implementation of a real-time KPI dashboard represents a strategic advancement in operational efficiency, yet the full potential of this tool in driving continuous improvement and strategic alignment may not be fully realized. The initiative's less successful aspects, such as the modest impact of sustainability efforts on market differentiation, suggest a need for a more aggressive marketing strategy and possibly further product innovation to meet evolving market demands.
For next steps, it is recommended to focus on enhancing the market penetration of the sustainable product line through targeted marketing campaigns and further innovation to meet the unmet needs identified. Additionally, leveraging the real-time KPI dashboard to identify areas for continuous improvement and further cost reduction could amplify the initiative's success. Exploring additional strategic partnerships, especially in emerging markets, could further expand the company's global footprint and market share. Finally, ongoing investment in employee training and development, particularly in areas related to new technologies and sustainability, will ensure the organization remains competitive and aligned with industry advancements.
The development of this case study was overseen by Joseph Robinson. Joseph is the VP of Strategy at Flevy with expertise in Corporate Strategy and Operational Excellence. Prior to Flevy, Joseph worked at the Boston Consulting Group. He also has an MBA from MIT Sloan.
To cite this article, please use:
Source: Global Strategy for Infrastructure Firm in Smart City Solutions, Flevy Management Insights, Joseph Robinson, 2025
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