Evaluation Essay on Thales' Group

Paper Type:  Case study
Pages:  7
Wordcount:  1687 Words
Date:  2022-06-04


Thales Group is a French multinational corporation leading international high-tech industry in design and building of electrical systems that are essential in defense, transportation, aerospace, and security fields. The world is increasingly fast moving, unpredictable, and full of opportunities. Thales Group has embraced these dynamics with broad ambitions to make life better and safe. (Thalesgroup.com). As a result they combines unique diversity of experts, talents, skills, and cultural practices in their architectural designs to deliver extraordinary high technology solutions to resolve contemporary and future problems. From all corners of the world, Thales Group has helped their customers to resolve challenging situation by advising and encouraging them to act smart and fast in making decisive decisions while dealing with complex issues (Cardin, et.al 2016). The group aims at making tomorrow better by influencing peoples' activities and choices they make today. Therefore, this paper will discuss the background, business landscape, competitors, a business level strategic analysis and benefits of Thales Group.

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Thales' Group Background

Thales Group has a rich history as the company was built slowly and with careful planning to adapt to prevailing structural conditions. In 1968, Thomson-Brandt and Compagnie Generale de Telegrahie Sans Fil (CSF) merged to form Thomson-CSF. The two companies were professional electronic businesses leading in broadcasting, shortwaves and electronic acoustics (Thalesgroup.com). Thomson-CSF later diversified into telephone switch gear, medical imaging and silicon semiconductor after expounding its operation in Middle East. In 1980s, despite landing major contracts in Gulf States, the company constantly faced financial crisis. Thomson-CSF refocused on professional and defense electronics from civil telecommunication. However, by 1987, Thomson -CSF anticipated an inevitable reduction in defense spending. Therefore, the company reconsidered initiating radical restructuring process to maintain its profit margin. Consequently, Thomson-CSF adopted proactive policies in favor of mergers and acquisitions as a mean of expanding the company's industrial base in Europe.

In April, 1998, majority of capital of Thomas-CSF was under private ownership after the French government endorsed a cooperative agreement among Aerospatiale, Alcatel, Dassault industries and Thomson SA (Thalesgroup.com). As a result, Thomson-CSF strengthened its scope of business, consolidated its market position and expanded its business presence in Europe. After privatization, the company extended its services to Australia, South Africa, Singapore and South Korea. The growth made Thomson-CSF change its business portfolio to focus on aerospace, defense, and information technology and services. On December 2000, Thomson-CSF was renamed Thales Group. From 2001 to 2004, Thales continued to divest non-strategic civil businesses and to consolidate its capability in security market. In 2004, Thales announced its new organization based on six divisions servicing separate markets (Thalesgroup.com). Today, Thales' Groups operates in nearly 56 countries and employs over 65,000 employees worldwide.

Business Landscape

PESTEL Analysis is one of the tool used in analyzing business landscape. It revolves around identifying various external variables that affects business's performance in the market. Thales Groups was founded in France and expounded its operations internationally. Over the years, the group has managed to establish themselves in the French market but this has been made possible through the support the company has received from the French government. The following are the external variables affecting Thales Group operations in France Australia and Singapore.

Political Variables

The French government has been an active member in the European Union and some of the cooperative international policies it have agreed with other nations have continued to affect the operation of Thales Groups. Initially, the French government actively took part in the privatization process of the company by initiating mergers and acquisition processes. Likewise, the ecofriendly policies the government has initiated have been boosting the growth of Thales Groups, which are committed in increasing reliability and life cycle of different infrastructures in defense, security, transport and technology. Australia is also a safe destination for Thales Group investment because the country has stable and progressive political and regulatory environment (Bergmann, 2017). The Australian government have embraced the telecommunication industry as an integral part of the economy. As a result, Thales Group have benefited from supportive policies aimed at distributing internet access to Australians. Similar to Australia Singapore is an integrated economy but maintains a heavy trade -dependent economy. The Singapore government retains a free market through government-linked corporation networks that Thales can benefit from to successfully venture in the various industrial fields of specialization.

Economic Variables

France is among the developed countries with a GDP of approximately $ 2.57 trillion. French citizens enjoys a high standard of living and has a large purchasing power. The country has also dominated internationally in health care, civil liberties and human development. The country has also invested heavily on security and defense which offers an opportunity to Thales Group to expound their operations (Jenkins, 2017). On the other hand, Australia has had a progressive consumer spending rates raising the household consumption and GDP. Australia has a GDP of $ 1.205 trillion with the telecommunication industry taking an integral role in developing an interconnected economy (Bergmann, 2017). Singapore also enjoys an economic freedom making its economy the second freest based on 2018 index. The country has GDP of $ 297 billion and mainly relies on exports especially in electronics, pharmaceuticals, and information technology products. Therefore, Thales Group investment in Singapore would face completion from existing firms but through mergers and acquisitions the company can positively influence Singapore economy.

Social Variables

Social trends have also continued to influence the demands for firm's services and products and the willingness of employees to work. France, Australia and Singapore are some of the countries whose working class are widely composed of the millennial generation. Thales has a recruitment policy aimed at integrating the young people in the workforce. For example, in 2014 the group signed over 1,201 contracts in France, and Australia and implemented a policy to ensure that over 30% of its employees are under the age of twenty six years. Likewise, France and Australia have been accumulating collective bargaining power through corporations. Thales have developed out of similar process and would match the objective of unions to offer satisfactory services mainly in security and transport sectors. Therefore, Thales can integrate well with the prevailing social changes in the three countries making it more productive.

Technological Variables

Advancement in technology has been essential in creating new and convenient products and processes. Developed countries such as France, Australia and Singapore continues to rely on technology to reduce cost of production, improve quality and promote innovation mainly in infrastructures, defense and health sectors. For this reason, Thales continues to expand in Singapore as the largest hub for repair services in aerospace. Advancement in technology in military has increasingly been considered as a key area of defense globally (Gilson, et.al 2016). As a result, countries such as France, Singapore and Australia have continued to seek for professional firms to aid in their security strategies which offers an opportunity to Thales to deliver their services internationally. Additionally, Singapore has a relatively small labor and land which are essential factors of production. The country relies heavily on technology to get the best out of the available resources making it an area of interest to Thales' Groups

Environmental Variables

The change in climate has been an essential factor affecting expansion of business. Different countries have been promoting ecofriendly means of production to reduce the advance effects of climate change. In France, climate change and air pollution tops French environmental concerns. Therefore, Thales whose objectives are to formulate a solution today to make tomorrow better fits well in guiding France in clean technology programs. Australia have been working to promote the use of renewable sources of energy as a means of reducing the levels of carbon emitted in the atmosphere. Likewise, Singapore have been advocating for ecofriendly means of production. Therefore, Thales' Groups will be of great significance to the three countries primarily in their industrial sectors.

Legal Variables

France is among the nations advocating for environmentally friendly, digital and inclusive society in which development is shared by all. As a result the country has initiated the 34 sector-based program aimed at promoting economic and industrial stakeholders' development and creating job opportunities. Also, the French Ministry of Justice has sanctioned the interception of communication and online data sources to investigate the intense haggling over several contracts. In Australia, the initiated a Cyber Security Strategy to monitor the challenges of digital age and protect the interests of the country online. Likewise, Singapore leads Asians in cyber security policies to empower business and society through safe and trustworthy means. Thales have been in frontline in fighting the cyber threats and promoting progressive online integration making it one of the most sort company in the sector.

Competitors to Thales

Thales faces competition in different area of specialization. However, there is stiff competition in the aerospace, information technology, defense and cyber security sectors. Some of Thales main competitors include

Computer Science Corporation (CSC)

Computer Science Corporation is an American multinational corporation specializing in providing information technology facilities among other related professional services. CSC offers services that overlaps with those of the Thales group in the IT sector. Over the years, CSC has been using cost takeout initiative to improve their supply chain efficiency and reduce overhead costs mostly in Middle East, Africa, Australia and Europe. The company has a weak suppliers bargaining power as its supply chain comprises of moderate size individual suppliers. However, contrary to suppliers CSC has a strong buyers bargaining power and most of its customers have been benefiting from discounts and loyalty programs.

On competitive rivalry, the IT sectors remains progressive with several firms including Thales strategizing their operations to attract more customers. International Business Machines, Hewlett Packard Enterprise, and Accenture among others companies have continued to establish themselves in the IT industry. As a result, CSC experiences a strong force of threat from companies offering similar products and services, which is also a challenge to Thales' Group. Nevertheless, new entry to market is moderate as those willing to venture into the industry will have to face stiff competition and incur large initial capital to establish a global enterprise.


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