Dassault Aviation SWOT and PESTLE Analysis

Strength

1. Dual expertise in civil and military aircrafts and robust business line-up from both sections: The dual civil-military experience of Dassault Aviation limits its vulnerability to fluctuating economic conditions. The company designs and produces military and business aircrafts in the same divisions and facilities of construction as a project integrator and designer.
The Raphale export trend started in 2015 combined with the upcoming French military spending bill for 2019-2025has boosted the defense business significantly. There have been several programs which affect the company directly like the Rafale, Mirage 2000, special-mission Falcons, ATL2, drones and nuclear deterrence. There was also a program announced for the development of the F4 standard which is to be implemented by 2022-2024. An order for 36 Rafales has been placed by Qatar Airways, the delivery of which was commenced in February 2019. The Ministry of the Armed Forces’ plan for through-life support reform has also been initiated though new support proposals for France’s Rafale and ATL2 aircraft.
This leading French A&D Company’s civil aviation business benefits from the company’s state-of -the-art technologies developed for defence. For example, revolutionary security technologies, such as fly-by-wire systems, advanced aerodynamics, composites, and data fusion, have been applied to the business jet family of Falcon. In response, new production processes and new certification and flight safety technologies have been inspired by the civil aircraft industry. The 6X is being developed as per schedule with delivery being initiated in 2022. The Falcon 6X is expected to improve the company’s long-range business jets. The work on these finally culminated with the Falcon 8X which made a spectacular non-stop flight of 14 hours between Singapore and London.

2. Centre of the aviation industry ecosystem: Dassault Aviation unifies major suppliers in the aviation industry as an industrial designer and application integrator. With developments in the United States and Asia, for instance, the company takes a pragmatic approach to managing collaborations and alliances, whether in Europe or in a wider international context. This approach encourages long-term relationships based on complementary skills, quality and efficiency. Dassault Aviation plays a key role in future combat systems by working together with European partners on various programs: the New-Generation Fighter by FCAS, MALE RPAS and Space Rider. With 2100 Falcon jets, 1K combat aircrafts in service, creator of more than 100 prototypes in the last century, with over 10,000 aircraft delivered to 90 countries, 18 specialized facilities, including 13 in France, 500 partner companies, this French aerospace company shapes the future by designing and building military aircraft, business jets and space systems.

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Weakness

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Opportunity

1. Growth in Business Jet Market: An industry research suggests that the business jet market will expand at a CAGR of 3.6% from USD 24.7 billion in 2019 to USD 36.4 billion by 2030. An increasing number of high net worth personnel and the roll out of new aircraft programs are expected to drive the growth of the market.
Based on the type of aircraft, the large segment is expected to lead the demand for business jets during the forecast period. This rise can be traced to the luxury of large business jets. Large jets consist of standard heavy jets and ultra-long-range heavy jets, which are priced far higher than small and medium-sized jets. The delivered amount of large jets is 1/3rd that of total business jets, and its price is more than twice the average business jet price, contributing to a larger market share. It is projected that North America will account for the largest share of the jet market in 2019 accounting for the largest share of the global market in 2019. This can be attributed to the maximum number of high net worth individuals in the region and the presence of major jet manufacturers in the region, such as Textron (US), Bombardier (Canada), and Gulfstream (US), among others.

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Threat

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Political

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Economic

1. Pre-owned aircraft market: The recovery of the business aircraft market has allowed the company to significantly reduce the number of pre-owned aircraft in stock. Nevertheless, this market remains highly dependent on the economic environment, and too many pre-owned aircraft available for sale can have an impact on demand and market prices for new aircraft.
The operating margin in 2018 was 13.2%, compared to 7.3% in 2017. Without the compensation of USD 280 million received from Safran following the termination of the Silvercrest engine contract, the operating margin would stand at 9.2%. The improvement in the operating margin can also be explained by the recovery in the pre-owned aircraft market and by the improvement in the hedge rate (USD 1.19/EUR in 2018 vs. USD 1.21/EUR in 2017).

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Social

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Technological

1. Digitalization, Disruptive Technologies and 3D printing: There has been continuous innovations in the aerospace and defence sector by the Silicon Valley players. Artificial Intelligence, 3D printing, extended reality, cloud computing, IOT and Blockchain are the trending technologies that drives supply chain efficiencies, faster time to market, and new value propositions.
Dassault Aviation specializes in the development of revolutionary technology like making airframes out of composite materials, resin transfer molding (RTM), hot forming, thermoplastic direct manufacturing and carbon fiber placement. This ability of the company give its products a unique quality and finishing which helps to set it apart. The robotics utilized in its workshops is the best in class. Product lifecycle management (PLM) IT tools is used extensively for the commercial development of the Falcons. The company is also well known for its expertise in implementing flight control, stealth and pyrotechnical technologies in all phases of mass production right from the design phase. Another achievement of the company is that it has achieved manufacturing success right from the computer screen without the need for any paper blueprints or prototypes. This has taken the aerospace sector and the entire industry forward by leaps and bounds. The company has thus managed to build a digital factory and take competition to a whole new level.
A Memorandum of Understanding to support the development of 3D printing technologies for aerospace was signed between Dassault Aviation and the Auvergne-Rhone-Alpes region of southern France on November 5, 2018.

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Legal

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Environmental

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