SAAB and Sustaining a Competitive Advantage!

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During our second day in Gothenburg, we visited the Defense and Security company (SAAB). SAAB serves an international market (Such as South Korea and the United States) with services, products and military defense solutions. Although we had little knowledge of SAAB, we were excited to learn more about SAAB's international role in defense and security. We found it interesting because we both had limited awareness that a Swedish company would be involved in defense and security on a global scale. When one thinks of Scandinavia, one does not think about defense and security. Therefore in our second blog, we discuss how SAAB sustains a competitive advantage in this particular industry. SAAB has sustained a competitive advantage due to effective employee strategies and new technologies, which have meet their customers' needs.

During the tour, we learned that SAAB follows employer of choice concept; they are deeply concerned about employee satisfaction since it reflects on the employees’ level of performance. Furthermore, managers have all the right to restructure teams and reposition employees as long as it will help in increasing the productivity and affect the company’s performance as a whole. They want to gather employees with exceptional experience and ideas to create an inspiring workplace. Therefore, SAAB has created a performance-driven culture which involves an individual performance management plan to every employee, they also help the employees identify their goals, which are tied with the company’s goals and provide opportunities to the employees for self-development.

Moreover, Since SAAB is working in an international market with a small number of competitors in the same industry -comparing to other industries, they need to have a very strong presence in order to stand out and sustain a competitive advantage..

In fact, one major difficulty that SAAB faces is that during the years 2000-2007, SAAB’s budget was cut by 20%, which led them to start purchasing systems and technologies that were already developed, regardless if they were developed within the country or by foreign suppliers. Therefore, this new policy of cutting the military defense budget was not placed at any of the other competitor companies, which increased the exposure of the competition on the Swedish market.

However, we believe that SAAB's emphasis on research and development enables them to sustain a competitive advantage and allows them to compete with the few other competitors. Additionally, they develop new technologies and test all of their products and services before giving them to the customers in their own laboratories which are equipped with advanced technology that can sense errors and problems. They also have trained and skilled engineers who are able to work with this new technology and fix multiple errors.

This new policy has forced SAAB to react immediately and do some changes. These changes were mostly internal, where SAAB decided on creating new resources in order to finance their products, systems and service development. To do so, they had to implement new strategies and follow a certain type of strategic planning, which helps them to maintain their competitive advantage.