TransDigm in 2017: The Beginning of the End or the End of the Beginning?

Description

TransDigm was a highly acquisitive company that manufactured a wide range of highly engineered aerospace parts for both military and commercial customers. Over the ten years ending in 2016, its stock price had increase ten times, and both EBITDA and revenues had grown at compound annual rates in excess of 20%. But in early 2017, investors, customers, and government officials began to question the implementation, sustainability, and ethics of the firm's unique value creation strategy. That strategy consisted of three parts: value-based pricing, cost reductions, and new product development. In the short term, CEO Nick Howley had to decide whether to respond to the barrage of criticism; in the longer term, he had to decide whether to change the firm's highly successful strategy.

Keywords

Antitrust laws Business ethics Business growth Business law and ethics Competitive advantage employee performance management Environmental sustainability Financial strategy Growth strategy International business Leadership styles Mergers and Acquisitions Pricing strategy Private equity Procurement Suppliers Value creation