Bombardier Aerospace: The CSeries Dilemma
In July 2004, Bombardier Aerospace announced its intention to develop a new family of aircraft called CSeries. In May 2007, three years after the initial announcement, the final decision on whether to proceed with the initiative was still pending. Moreover, during this period, the company released several confusing announcements that raised concerns among investors and industry analysts regarding the sustainability of the company's long-term strategy. In the meantime, Brazilian Embraer had invested heavily in research and development (R&D) and taken the leadership position in the regional aircraft segment from Bombardier. Consequently, Bombardier was faced with a serious dilemma: launch or not launch the CSeries project. Whatever the decision was, it was expected to have a major impact on the future market positioning of Bombardier. Students may be asked to act as advisors to Pierre Beaudoin, president and chief executive officer (CEO) of Bombardier Aerospace, and recommend whether the company should proceed with the CSeries initiative. More specifically, students should do a full analysis of the company's external environment, identify the alternatives available to Beaudoin, assess these options based on internal and external environments and recommend a course of action. For Beaudoin, the recommendation was due before the annual meeting of shareholders, scheduled on May 29, 2007.