BAE Systems' Global Expansion

Introduction

From the perspective of operational approaches, on an international basis, it could be ascertained that any substantially successful multinational organisation, with business investments which could generally span the entire globe, could resort to a variety of different modes of entry into previously unchartered and yet, sufficiently prospective market space, for the purpose of improvement of product and services sales based revenue generation. The selection is incumbent upon the particularity of different conditionalities which could be confronted by respective multinational business organisation and this leads to the determination of the particular nodes of operations and the specific mode of market entry which could be deemed to be effective by such Multinational business organisations in context to the new business horizons towards which these could be explorative about. There are three exactitudes in terms of factors which could be evaluated in this regard to explain such observations more a more nuanced perspective. There could be observed to be three actual and direct considerations concerning the selection modalities of new market spaces by such multinational business organisations. These are to be acknowledged in the manner of concurrent circumstances, objectives, functionalities and prospects of enhancement of market share possession on part of particular companies. In this context, the corresponding essay has been reflective of the supposed scenario under which a particular company, which has been selected for the purpose of the study undertaking, could opt and attempt to access a hitherto unavailable national market space of any specific county. The considered sectors of operation by such a selected organisation under consideration have been primarily associated with those of the disciplines of manufacturing, importing and exporting of products, investment in the format of Foreign Direct Investment and even functionalities such as production and financial management. However, out of such considered and evaluated categories, the core industrial operational perspective of manufacturing and goods production has been selected for the purpose of infusing greater relevancy and authentication of data regarding the perspectives of research which have been observed within the overall working architecture of the current essay report under consideration.

Analysis

The foundation of the entire study report could be evaluated to be based upon the selection of a specific business organisation which could possess global accessibility as this could have a definite effect in terms of the analysis of the probable business propagation activities which could be integrally associated with the formulation of the most accurate conclusions of the concerned research. To this effect, the research essay has outlined the selection of the BAE Systems PLC which could be identified, as has been outlined by the research of Luxton, Reid and Mavondo (2015), as a British multinational defence, security and aerospace company which could be observed to export the manufactured products throughout the world and at different national regions. According to Alon et al (2016), the headquarters of the BAE Systems PLC are located at London at the United Kingdom and this company under consideration could be comprehended, as per the research of Autor, Dorn and Hanson (2015), as the largest defence equipment contractor currently operating within the geographical territory of Europe. This capability scenario is also significant for this organisation under consideration to be rated amongst the largest companies of the world in the business field of defence equipment manufacturing and arms production organisations in the world. As has been opined by Autor, Dorn and Hanson (2016), the BAE Systems PLC could be considered to be the third largest armament manufacturing and defence equipment exporting organisation in the world if the status of revenue generation could be taken into account as the only yardstick for determination of the size and capability of such a business entity such as that of the BAE Systems PLC. This organisation has the largest export destination at the United States of America and is thus considered, as has been observed by Baker (2014), to be in the list of one of the largest of the six primary suppliers of defence equipment of the US Department of Defence. In this context, it could be further observed that other major export destination of the BAE Systems PLC have been Australia, India, and Saudi Arabia, amounting to the volume of 20% of the overall sales of the company under consideration. Back in the year of 1999, the BAE Systems PLC was established through the merger of two British companies namely the Marconi Electronic Systems (MES) and the General Electric Company PLC (GEC). This merger had a net worth of £7.7 billion.

Company specifications

In terms of the product manufacturing and export functions, as has been outlined by Bello et al (2016), the BAE Systems PLC has developed one of the most significant military equipment production inventory in terms of the variation of produced military hardware as well as software based applications which could be effectively suited to address the necessities concerning the hyper sophisticated network centric warfare. As per the research of Strauss and Frost (2016), in the financial year of 2016-17, the cumulative revenue generation of the 95% of the produced goods and services of the BAE Systems PLC could be comprehended to be that of the military equipment related sales. The primary export catalogue of the products of the BAE Systems PLC is prominently exhibitive of the extensive ranges of combat aviation based products such as the front line combat aircraft in the form of Typhoon fighter and Tornado fighter-bomber. Apart from this, the BAE Systems PLC has been operating as one of the most significant overseas partners in the overall development project of the F-35 Lightning II multi-speciality air superiority fighter development programme. In this context, as has been specified by the research of Chin (2018), the premiere aviation platform based export product of the company under consideration has been that of the Hawk advanced jet trainer aircraft. The BAE Systems PLC is also the company which manufactures and exports the High Endurance Rapid Technology Insertion or HERTI technology based Unmanned Aerial Vehicle with the internal inertial automated navigational capability. The current development scenario of the upcoming and latest combat aviation platform, under the auspices of the BAE Systems PLC has been that of the Tempest air superiority fighter which is meant to replace the existing Eurofighter Typhoon in the next two decades. This indicates a considerable export potential which could be possessed by the armament manufacturing company under consideration. De Mooij (2018)has outlined that the primary export inventory of the BAE Systems PLC, concerning the probability of exploring and attempting to enter into any hitherto unattended and unchartered national market condition, could be effectively put into utilisation regarding the extensive ranges of equipment which could be found in such an inventory with coverage of all the three dimensions of combat operations which could be undertaken in any future scenario of combat. In this context, BAE Systems Land and Armaments which is a subsidiary of the BAE Systems PLC, runs the manufacturing and export mechanism of the varied operational equipment such as M2/M3 Bradley fighting vehicles, the Advanced Gun System (AGS) which is utilised by the United States Naval forces, M113 armoured personnel carrier (APC), M777 howitzer precision filed artillery, main battle tanks such as the Challenger II of the British Armoured Corps, M109 Paladin as well as the several models of tracked and semi tracked armoured vehicles which care utilised by the armed forces various European as well as overseas countries. In terms of the various other weapons and equipment platforms which are manufactured by the BAE Systems PLC, the most prominent which could be deemed to be noteworthy, could be observed as the Astute-class nuclear submarine, aircraft carriers and various different categories of naval air defence systems. In terms of the export category enhancement through information centric operations systems, Zhu and Sarkis (2016) have stated that the BAE Systems PLC could field different products such as advanced communication and control suits for battlefield vehicles and aviation platforms, various solutions regarding the cross domain functioning such as the Cyber-security solutions portfolio, support and recovery of digital data services, general purpose and high assurance military grade Operating Software based applications, diversified ranges of electronic warfare platforms such as radio frequency countermeasures, mine neutralisation mechanisms, infrared vision equipment, geospatial solutions which could be exported to a wide domain of national applications and many more.

Market penetration perspectives

According to Gabrielsson, Seppälä and Gabrielsson (2016), it is inherently a complicated process for any business organisation, regardless of the extent and reach of the company within the global or the regional context, to integrate and apply concise strategic marketing approaches for exploration and penetration of new market spaces within any country where the respective organisation could not have been operating previously. In this context, the purpose of development of the study report has prompted the selection of one of the prescribed countries where the selected multinational business organisation BAE Systems PLC has not been active in the course of the export and associated business operations previously. As has been outlined through the research of Grewalet al (2018), this country has to be in possession of sufficient prospects of enabling the BAE Systems PLC to expand the sales and revenue generation propositions regarding the equipment and products which the company under consideration could be able to export into the internal market of this selected country. This specific aspect of utilitarian perspective has thus prompted the selection of the country of China. The research of Holmes et al (2016) has highlighted the factor that the continuous growth and expansion of the economic capability and business propositions of China are reflective of the enhancement of the efficiency of the business infrastructure of that country which could lead to the impartation of specific value proposition development on part of different business organisations which could be investing in the Chinese import sector in the manner of Foreign Direct Investment mechanisms. The particular rationale in this respect, as could be analysed from the research of Jiaet al (2014), regarding the probable attempts by the BAE Systems PLC to invest in the manufacturing sector of the Chine economy as well as in the exporting of the products and services which this company possesses within the product inventory, is associated with that of the dual measure of increase of wealth and levels of disposable income which could be observed within the greater Chinese structural domain of Chinese consumerism. However, the factor that the company under consideration, the BAE Systems PLC, generally manufactures products and equipment of military utilisation and such products are only exportable to institutionalised customers such as private contractors and official Chinese armed forces, could lead to the realisation of the fact that, in the most extensive measures, the second tier applications such as electronic components and the sensor based equipment which could be utilised for civilian purposes as well, such as in the civilian aviation sector in the form of avionics and other similar dual purposed technologies, could be utilised by the manufacturing company to launch into the Chinese market region. This could, as per the perception of Johanson and Mattsson (2015), translate the efforts of the BAE Systems PLC into a probableboon for the targeted demand generation process. This could be as well indicative of a specific situation within the entire market space of China. As has been observed by Kostova, Marano and Tallman (2016), this could be identified in the manner of the opportunities which could be in existence regarding the sales propositions of the Chinese markets. The statistical aspects in this regard could as well be determined from the research of Lasserre (2017). This could be better delineated from the perspective that the financial year of 2016-17 attested to the total amount of foreign trade value generation of US$3.87of the Chinese economy.This closely involved the export value of US$2.05 trillion and the import value of US$1.82 trillion. Such statistical observation, according to Zhao, Park and Zhou (2014), has been indicative of the fact that currently, the financial position of China is of greater strength than that of the United States of America as well, in terms of export import value generation and from the perspective of the annual GDP as well. In terms of the trade surplus which has been in existence in between the China and the European Union, the value could be estimated at US$122 billion.

Particularities of Chinese commercial administration

In this context, as has been observed by Luxton, Reid and Mavondo (2015), the objective of maintenance of long term development which could be sustained in a consistent manner, has been the core aspect of the Chinese economic planning in the previous years. This has resulted in the active shift from an economy which could import led towards an export oriented financial structure. This economic growth model has two significant aspects, namely the expansion of the domestic demand and consumption, both of locally manufactured and the imported products. According to Nagle and Müller (2017), the investing companies within China are necessary to understand the regulatory framework of import and export processes. Thus, it is necessary to note that either the business entities or the business individuals, who could be interested in the engagement of both import and export undertakings, are first required to register themselves with the concerned Chinese Ministry of Commerce or MOFCOM.

As per the observations of Piercy (2014), there are three classificatory categories under which the Chinese imports could be placed. These are the Permitted, Restricted and Prohibited categories of imported goods and services. In this context, the most significant category has to be the permitted goods category since such imported goods and products are directly catalogued under the list published by the MOFCOM and the General Administration of Customs (GAC) of the Chinese government. The import of these products, according toYin and Jamali (2016), could be provided automated licensing facility on a per annum basis. The various goods which could be identified to be included within this format of permissible products and which are entitled to be provided licences in an automatic manner include the goods and products which are imported for the purpose of processing trade and these are often re-exported to other destinations such as other countries by the Chinese. These are often exempted from any retrospective licensing scenarios as well. Weapons are integral into this category since the Chinese government also exports some of the combat systems and weapons platforms to various other client countries after acquiring these from the external sources. Thus, some of the products of the BAE Systems could be subjected to this permissible category of goods and products. However, this may not be applicable for all of the products and range of services since some of the electronic and communication combat applications could be acknowledged to be the products which could be excluded from such category of permissible goods and services.

Regarding the evaluation of the propagation of the international export business services by various governmental institutions within the geographical extent of the selected country of China, one specific organisation could be taken under consideration. This organisation could be perceived as the Australian Trade and Investment Commission or the Austrade. This specific organisation is responsible for the promotional operations concerning the commercial activities, trade and educational operations of the Australian Government as well as the national economy of Australia. As a statutory agency operating under the aegis of the portfolio of Foreign Affairs and Trade of the Australian national government, this organisation Austrade, generally maintains various offices and information as well as liaison centres within the overseas embassies and consulates of the Australian government at various foreign nations including that of the People’s Republic of China. According to Chin (2018), the operations of trade promotions undertaken by Austrade at the Chinese territory are primarily reflective of the provisioning of assistance to the Australian companies to establish effective linkages and connection with the domestic Chinese purchasers and buyers and with separate companies. The centres of Austrade primarily operate within different Chinese metropolitan areas which could be identified to be TradeStart locations where formulation of partnerships with local Chinese operatives along with the establishment of different industrial associations and regional as well as local business development institutions are generally put into operations.

In terms of the principal exports of the company under consideration, regarding the weapons and armament packages which are specifically manufactured regarding the utilisation potential realisation at the three dimensional warfare scenario, including the land, air and naval battle conditions, the certification process which the Chinese government could impose upon the import of these products upon arrival at China, could be stringent enough. Apart from this, the inspection process of the Chinese government authorities are also considerably more complex in terms of bureaucratic cold shoulders and feet dragging which delay the export could permit issuance by the Chinese government authorities concerning the permissible products and services of BAE Systems PLC. Only consequent to the inspection completion, would the formal certification of clearance be provided and recognised by the Chinese government authorities concerning the permissibility of the goods and products which could be exported to that country by the BAE Systems. According to Zhu and Sarkis (2016), the administrative directorate which operates directly under the supervision of the State Council of the Chinese Government is known as the General Administration of Quality Supervision, Inspection and Quarantine (GAQSIQ). This directorate is the supreme authority in terms of supervision of quality and inspection of goods and services which could be imported across the borders of China. The GAQSIQ is also responsible for the execution of the responsibilities such as the supervision of Certification and Accreditation Administration (CAA) as well as the Standardization Administration (SA) departments of the Chinese national government. Furthermore, the China Compulsory Certificate (CCC) could be identified as the certificatory mark which is necessary for any of the imported products which could be transported across the Chinese border into the mainland of China and which could be bought by any Chinese individual or institution. The catalogues of the products which are provided with the CCC marks are generally approved by both the GAQSIQ and the CAA in a joint and simultaneous manner. The products and goods which are not approved by the CCC marking could thus be excluded from the permission to be imported into the Chinese market. This is a specific challenge which the BAE Systems PLC would have to overcome regarding the fulfilment of all of the criteria which could be deemed to be mandatory under the regulation of the CAA and the GAQSIQ. According to Rottig (2016), multiplicity of licences of export could be obtained regarding the Chinese governmental policies by any exporting MNC. However, the specificities of the contracts of import under which this provision could be accessed are quite complicated. Notwithstanding this observation, Ryan (2016) has outlined that the acquisition of certification from the GAQSIQ could lead to the acquisition of the particular license which could be valid for a total of six batches, which denotes the fact that any exporter in possession of such a license could have the benefit of exporting the goods and products for six consecutive calendar months.

Concerning the strategies of market penetration and the management of the challenges from the market competitors, as has been observed by Spann, Fischer and Tellis (2014), BAE System PLC could better utilise an amalgamation of different market penetration and market share possession strategic tactics. The initial one could be understood to be the price adjustment methodical approach. Under such an approach, the company which could be willing to access any new market space could judiciously evaluate the cost of production and transport as well as the advertisement undertakings associated with that of the products and services which it could be planning to launch in comparison with the similar product specifications of the market based competitors and then could readjust and lower the initial offering prices of the products and services to encourage greater sales volumes regarding the product offerings. However, this tactic is often fraught with danger since this could lead to the devaluation of the necessary pricing standards associated with the product and services offerings and could generate adverse consumer opinion in terms of the perception formulation that the products of such a company could be of substandard quality. In terms of the BAE Systems PLC exports into China, this strategy has limited utility since the products which are offered by the company under consideration are primarily not consumable by the general populace and are thus considered to be high end cost based products since the manufacturing costs are considerably higher regarding the military equipment which are produced by the BAE Systems PLC.

Conclusion

On the other hand Strauss and Frost (2016), the method of augmented promotion could be utilised by the BAE Systems which involves immense effort investment within the perspective of the product and service promotion within any specific segment or throughout the entire market space. This is primarily a tool of promotion through the targeted customer and consumer segments and the purpose is to increase the brand awareness prospects regarding the product offerings. However, the fact remains that this format of market penetration strategic approach is inherently a costly proposition and it depends upon the companies whether to apply such augmented promotional activities for longer terms or to utilise such processes for a limited format of time. For the BAE Systems PLC to apply this strategy for a prolonged period of time, it could be required that particular effort be invested into the careful planning and calibrated proportions of budgetary investments and the analysis of the dividends which could be derived out of such advertisement campaigns since the competitors would be expected to attempt the same tactic.

Recommendation

Stummer et al (2015) have outlined that the best possible market penetration strategy could be the combination of the tactics of improvement of the existing products and services from a quality and innovation based perspective and the concentration of emphasis on the diversification of the distribution channels of the company under consideration. Formulation of local partnerships with the pre-existing Chinese companies who could be offering similar product portfolios, constituting deliberate joint ventures of manufacturing the products of the BAE Systems PLC at China through the utilisation of the local infrastructure and labour force as well as the impartation of training and other improvement services to the partnership holding companies and to their manpower could all be deemed to be effective propositions through which the BAE Systems PLC could focus on the possible solutions of the existing challenges which could emerge while it could be attempting to enter and establish itself at the Chinese industrial markets. Diversification of the channels of distribution is a core aspect of such solutions.

In the preceding learning unit, I have managed to learn certain aspects regarding the international trading and business practices concerning the export and import of goods and services. The influence on my perceptual understanding has been profound concerning the overall process of global import and export businesses. The emphasis has been completely on the various trading issues which any company could come to encounter while attempting to do business at newer market spaces in new countries. The most profound effect on me in this regard has been the infusion of interest in me concerning the requirements and outcomes of becoming an international business practitioner. The intention of mine would be to establish myself in the most credible manner within the global export market and to achieve the most coveted position within the export business. I am intending to indulge myself in the business of joint ventures within the Chinese and the European market spheres so that the comparatively greater customer segments of these two regions could be accessed and utilised for the progression of my future career. My objective is to operate as an international business exporter. In this context, I have interest in working within the structure of the BAE Systems PLC due to the global reach which it has and for the reason of it being a global defence exporter with a vast array of product ranges. Being a global defence business exporter could assist me in utilisation of the brands of equipment and services produced by the BAE Systems PLC.

The overall experience, from the perspective of learning as well as researching into the topic of interest which has been deliberated above, from a personalised point of view, could be determined to be that of a progressive perception formulation regarding the efficacy of selecting the field of study within the greater precincts of the career discipline of being an international business practitioner. In this respect, it could be observed that this perspective is significantly greater complicated and multidimensional in comparison to the unidirectional perspectives of the working personnel who could operate as direct employees of either any business organisation or of other institutions which could be operating within the marketing domain of any particular country such as that of China. In this context, it could be further observed that the field of international business practices is much incumbent, regarding the process of deliberate operations and successive utilisation of career growth opportunities, on the attained training from the learning processes which could involve first hand experiences in terms of Primary research based analytical study of any particular research subject. In case of the perspective of pursuing the choice of such practices of international businesses, the learning which could be attained had imparted a definite influence on the formation of proper understanding regarding the issues and the prospects which determine the overall structure and dimensions of such a subject. The learning which has been received, has been influential from three different perspectives, in context to the gradual development of the psychological and knowledge based perceptions concerning the actualities of international business practices which prevail within the global context. The first has been indicative of the different phases through which the general business practices in the current global dimension does progress. This has been especially assistive in case of development of the understanding regarding the variables of international business, on a personal footing. The deliberations regarding the functionalities undertaken by both the private business institutions and by those of the government sectors of various countries such as China have been also successful in the impartation of the perspectives of comprehensive cognisance formulation regarding the various internal and external factors which could influence the responsibilities and assignments which an international business administrator or practitioner could come to face during the business development and career progression discourse.

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