...affect the financial bottom line. The last three decade we have seen such imponderables make in the battle between Airbus and Boeing even more fascinating. For Taylor (2003), the fight for supremacy between these two manufacturers puts such titanic confrontations as Ford versus Chevy and Nokia versus Motorola in the shade. This paper takes an empirical approach to examining international competition and marketing strategy adaptation in the wide-body aircraft market. The discussion topic will be organized into three sections, beginning with failure start of Airbus Industry GIC. Explaining in deep analysis of the reason behind the difficulties that Airbus faced when entering upon the civil aviation industry. While we continue on to the second part where Airbus have broken ground with a leading market share in the late 90s, what marketing strategy did Airbus initiate in order to achieve this enormous success when going against its sole competitor the mighty Boeing. Last but not least, the current market condition. The difference in strategy that each of the duopoly has apply, Airbus going for the large airliner in hub-and-spoke system and Boeing targeting at manageable size and fuel efficient in a point-to-point configuration. Airbus has come far and long, with a sizable success in gaining market share from its monopolistic competitor. But our supposition is whether Airbus marketing strategy is sustainable in the turbulence future of global airliner manufacturer domination. Aviation...
Words: 2910 - Pages: 12
...Executive Summary Activities in the commercial aeroplane manufacturing industry have been outshined by the competition involving the European owned Airbus and the USA owned Boeing. These two companies exist as a duopoly at the top end of the commercial aeroplane manufacturing industry that covers the development of airplanes with a capability of more than 200 persons. Other aeroplane manufacturers also exist but at the lower end of the industry, these smaller firms mainly develop low capacity airplanes that basically convey less than 150 persons. Boeing is a United States of America based company which was founded by William Edward in 1916, the firm has been dominating the industry since its inception while on the other hand Airbus was founded in 1970 by the European Aeronautic and Space Co. (EADS) with its headquarters in Toulouse, France in other to challenge the monopoly thus far enjoyed by Boeing. The trade disputes or disagreements involving the European Union (EU) as well as the United States (US) take precedence in the rivalry or fight between this two firms. Whilst Airbus receives subsidies in the form of launch aid from the European Union while at the same time Boeing is granted right to use the United States military’s Research and development technology. Owing to the soaring operating fund as well as long product break even time associated in the airplane manufacturing industry, it can be reasonably debated or argued that it will be somehow difficult for each of...
Words: 7131 - Pages: 29
...Boeing versus Airbus: The ‘endless’ crusade for continuation of subsidy! (A case study) Case reviewer: Angelica Sharma* Brought up in a family in which my parents were always ready to help anyone, closely or even remotely related to them, but not without being duly satisfied about the urgency, righteousness / desirability of assistance (mostly financial) that was asked for, I have, overtime, come to view non-market incentives like subsidies, grants and tariffs from a mind-set that I have found moulded in their company. I look upon my parents as really great protagonists of market-economy without undermining their sense of sympathy and concern for the hapless lot around them in that country, they proudly refer to as India. They always made a distinction between who deserved and who did not deserve the favour that has been asked for. And also, they were particular to find out when, in what form, how much and for how long the assistance, if any, was to be there. Strangely, even to day, they remorsefully recall the few instances of having wasted their scarce productive resources on individuals who, they later-on found, never wanted to be on their own. But they did learn a lesson from these experiences. I have grown in such family environment of respect for merit, hard work and self-pride. It is endowed with this sense that I intend to ponder over the Boeing-Airbus subsidy-related trade-rift and comment on the perceptions, policies, arguments and counter-arguments...
Words: 2870 - Pages: 12
...conducted for the purpose of researching this phenomenon have concluded that the inertia occurs amongst individuals and groups who are risk averse and ill-informed about the nature of change. Thus it can be asserted that individuals resist loss. To argue that we naturally resist change because we naturally resist loss would lead to an argument which would be alluding to correlation by causation and hence be a fallacy. The social cognitive theory postulates that people References Pilot's handbook of aeronautical knowledge. (2008). Washington, D.C.: U.S. Dept. of Transportation, Federal Aviation Administration. AERO. (n.d.). AERO. Retrieved May 14, 2014, from http://www.boeing.com/commercial/aeromagazine/articles/2014_q1/archive.html Boeing 787 Dreamliner. (2014, November 5). Wikipedia. Retrieved...
Words: 402 - Pages: 2
...Table of Contents 1. Executive Summary 2 2. Reasons Boeing cancelled its development of the SuperJumbo 3 2.1. Boeing had an alternative to developing a new aircraft 3 2.2. Boeing already had market share 3 2.3. Boeings market analysis did not show sufficient demand 3 3. Strategic weaknesses in Airbus’s customer strategy 4 3.1. Strategic Analysis of Airbus 4 3.2. Analysing resources and capabilities of the organisation 5 3.3. Shaping the organisation through vision, mission and purpose 5 3.4. Customer strategy at Airbus 6 4. Is the Airbus strategy driven by customers? Or rather more by a sense of rivalry with Boeing? 6 5. Airbus’s demand estimates and implications for a customer driven strategy 7 6. Support for Airbus’s decision to proceed with the SuperJumbo 9 7. Conclusion 10 8. Bibliography 11 1. Executive Summary Boeing cancelled the development of the super jumbo after it had conducted a research. What informed this decision was the fact that there was no sufficient demand to justify the $7 billion investment. Instead of pursuing further the super jumbo development they decided to stretch their existing aircraft to cater for more passengers. They had no pressure to develop the super jumbo because they had the largest passenger aircratf at the time and had no competition at that segment of the market. This means that the segment of the market was monopolised by Boeing Airbus on the other hand wanted to penetrate the long range passenger...
Words: 3009 - Pages: 13
...Boeing versus Airbus: The ‘endless’ crusade for continuation of subsidy! (A case study) Case reviewer: Angelica Sharma* Brought up in a family in which my parents were always ready to help anyone, closely or even remotely related to them, but not without being duly satisfied about the urgency, righteousness / desirability of assistance (mostly financial) that was asked for, I have, overtime, come to view non-market incentives like subsidies, grants and tariffs from a mind-set that I have found moulded in their company. I look upon my parents as really great protagonists of market-economy without undermining their sense of sympathy and concern for the hapless lot around them in that country, they proudly refer to as India. They always made a distinction between who deserved and who did not deserve the favour that has been asked for. And also, they were particular to find out when, in what form, how much and for how long the assistance, if any, was to be there. Strangely, even to day, they remorsefully recall the few instances of having wasted their scarce productive resources on individuals who, they later-on found, never wanted to be on their own. But they did learn a lesson from these experiences. I have grown in such family environment of respect for merit, hard work and self-pride. It is endowed with this sense that I intend to ponder over the Boeing-Airbus subsidy-related trade-rift and comment on the perceptions, policies, arguments and counter-arguments of the two...
Words: 2871 - Pages: 12
...homepage: www.elsevier.com/locate/techsoc The politics of airplane production: The emergence of two technological frames in the competition between Boeing and Airbus Alexander Z. Ibsen* University of Arizona, Department of Sociology, P.O. Box 210027, Tucson, AZ 85721-0027,United States a b s t r a c t Keywords: Airplanes Boeing Airbus Two-party democracy Frames Technological philosophy Economic models of technological innovation, as well as modern sociological approaches to the study of organizations, predict that two-actor markets will eventually evolve into one dominant technological logic. Why is it, then, that the only two global manufacturers of large commercial airplanes have developed diametrically opposed technological philosophies? Based on secondary historical sources, this article employs a theory of twoparty democracies from political science and the theory of sociotechnical frames to explain why Boeing pilots are allowed ultimate command of their aircraft whereas Airbus confers this authority to the flight computer. Ó 2009 Elsevier Ltd. All rights reserved. 1. Introduction For anyone who has ever flown on a large airplane owned by an airline based in an affluent country, the chances are almost exactly 50% that the plane will be made by Boeing Commercial Airplanes, and 50% that it will be made by Airbus S.A.S. At the same time, it is 100% certain that it will not be made by anyone else. Most passengers probably cannot tell the difference, nor will they...
Words: 7006 - Pages: 29
...Topic Paper – Week 3 Boeing Commercial Air versus Airbus Group Submitted by Cita Renee’ Reid Prepared for Professor Greg Gotches BUSN 6120, Managerial Economics Spring 1, 2015 Section OE Webster University 24 January 2015 CERTIFICATE OF AUTHORSHIP: I certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course. Cita Renee Reid________________________24 January 2015 Signature Date Introduction For nearly four decades, Boeing Corporation and Airbus Group have battled for supreme dominancy of the large civil aircraft (LCA) market. In years past, U.S. held Boeing had dominated the commercial aircraft industry; however, between YY and 2013, European-owned Airbus, had slightly edged Boeing out as the top supplier. In 2014, the precarious balance was tipped once again, as Boeing delivered more aircraft to its customers; thereby, reestablishing itself as the number one manufacturer. This paper will explore the history of the companies, how they are alike and different (particularly their production process), how they approach the aircraft marketplace, where their rivalry will likely head and the most probable outcome of their ongoing competition. It will also give a brief history and overview of the World Trade Organization (WTO) 2012 ruling over the receipt of governmental subsidies...
Words: 3041 - Pages: 13
...Harvard Business School Strategy Working Paper Series Working Paper Number: 02-061 Working Paper Date: February 2002 “Airbus vs. Boeing in Super Jumbos: A Case of Failed Preemption” Benjamin Esty (Harvard Business School) Pankaj Ghemawat (Harvard Business School This paper can be downloaded without charge from the Social Science Research Network electronic library at: http://ssrn.com/abstract_id=302452 Airbus vs. Boeing in Superjumbos: A Case of Failed Preemption* August 3, 2001 Rev. February 14, 2002 Benjamin C. Esty Morgan 381 Harvard Business School Boston, MA 02163 Tel: (617) 495-6159 e-mail: besty@hbs.edu Pankaj Ghemawat Morgan 227 Harvard Business School Boston, MA 02163 Tel: (617) 495-6270 e-mail: pghemawat@hbs.edu *Acknowledgements: Ramon Casadessus-Masanell, Bruno Cassiman, Richard Caves, Ken Corts, Tarun Khanna, Julio Rotemberg, Vicente Salas Fumas, Xavier Vives and seminar/workshop participants at Boston University, Copenhagen Business School, Harvard Business School, INSEAD, New York University and Universitat Autonoma de Barcelona provided helpful comments. So did senior executives at both Airbus (Adam Brown, John Leahy) and Boeing (Tim Meskill, Randy Baseler, and Jim Jessup), although their comments do not constitute an endorsement of the material in either the teaching case or this paper. We also gratefully acknowledge help from Ed Greenslet, Don Schenk, and The Airline Monitor in obtaining data and insights about the commercial jet aircraft industry...
Words: 21672 - Pages: 87
...homework Kristin Kopicki MIS510 Boeing Case Study Due: 10/15/14 1. Why did Boeing adopt the radical change approach for designing and developing the 787 Dreamliner? What were the risks? In your opinion, was it a good move? Defend your choice. Boeing adopted the radical change approach for designing and developing the 787 Dreamliner because they were in competition with Airbus and needed a new approach in which they could use innovation to stand out upon their competitiors. Boeing was looking to reduce manufactur- ing costs and development times. Boeing took an aggressive approach to apply their techniques. There was not enough time to fully establish the project or to even communicate with vendors. The project was delayed mainly because of their global supply chain network. Boeing did not have the necessary technology to fulfill the needs of the 787 Dreamliner which unfortunately caused it to have many delays and problems. In my opinion, this was not a very good decision. It was a financial burden to the company and caused unnecessary stress on the company as a whole. They were left with no choice but to make up for the losses to airlines that purchased the 787 Dreamliner. Kristin Kopicki MIS510 Boeing Case Study Due: 10/15/14 1. Why did Boeing adopt the radical change approach for designing and developing the 787 Dreamliner? What were the risks? In your opinion, was it a good move? Defend your choice. Boeing adopted the radical change approach...
Words: 1144 - Pages: 5
...Germany and Spain joined forces but it wasn’t until over ten years later before Airbus started to make an impact on the market. The commercial aircraft industry is one that can only support a few major players due in large part to the large developments costs as well as demands that are volatile. No one questions that Airbus received subsidies to become a major player but they also had a solid product strategy and had produced some state of the art aircraft (Gregory, 2010). The U.S. and the governments who backed Airbus entered into a agreement in 1992 that was projected to resolves the disputes over subsidies and unfair practices. The U.S. felt the agreement was fair and that it provided a more level playing field for the two companies. The commercial aircraft industry also was keenly aware that the international business of a complex one and that both companies utilized similar suppliers. Making too much stink over the trade disputes... Boeing versus Airbus: Two Decades of Trade Disputes (2010); the main issue is whether fair competition is available in the commercial aircraft industry, and if Europe and the U.S. are providing subsidies to the commercial aircraft industry providing a disadvantage to the other. The U.S. opening criticizes the European governments for directly subsidizing Airbus; the European governments claim that the U.S. government is providing support to Boeing through their defense programs that are almost certain to spill over into the...
Words: 620 - Pages: 3
...Introduction The goal of the study is to provide overall financial statement overview of The Boeing Company using the knowledge obtained during the Financial Management course. The main question of the study is how financially well the company is at the moment and what investment expectation it generates on the market nowdays. The Boeing Company background The company was originally founded by William Boeing on July 15, 1916, as "The Pacific Aero Products Company". Two years later it was renamed into “The Boeing Company”, on May 9, 1917. Since that date the company grew and acquired a lot of its competitors, including the McDonnell Douglas in 1997. [pic] The Boeing’s structure consists of two main divisions and two supporting divisions: - Boeing’s Commercial Airlines (BCA) - Boeing Defense Space & Security (BDS), which in turn consists of: o Boeing Military Aircraft o Network & Space Systems o Global Services & Support - Boeing Capital Corporation (BCC) - Other segments (including own Fire department and other non-profile activities) [pic] The Boeing Company’s Commercial Airliners division took the leading market positions up to 2003. Financial Ratios Analysis Liquidity Boeing’s liquidity ratios increased in 2010 and 2009 in comparison to 2008 values, but current and acid-test ratios are still below the industry average. Reasons: - the amount of money and short-term investments...
Words: 4587 - Pages: 19
...The Boeing 7E7 ‘Dreamliner’ Case #3 Section 1, Group 8 Introduction: The Boeing 787 Dreamliner case provides us with a brief background of Boeing’s business through the end of the 1990’s, and how company management recognized the importance of reinventing their core business in order to remain competitive in the consumer air travel segment. We learned how in-depth of a process it can be to successfully design and produce a new airplane with revolutionary technology and high-tech manufacturing requirements. Boeing struggled with these aspects of the plane, and as we learned, greatly underestimated the amount of time and money that the project would require. 1.) A: Boeing and Airbus both issued corporate reports regarding the demand for aircraft in different segments going forward. Despite differences in the overall outlook in terms of segment popularity and the exact volumes of aircraft to be required by the market, both reports were very obviously positive. The main differences between the reports were seen in Boeing’s willingness to forecast for the increased popularity of mid-range aircraft, versus Airbus’ decision to place a higher weight on the importance of international-scale jetliners. Boeing predicted demand over 20 years would call for “5,437 intermediate twin-aisle airplanes; and 889 747-size or larger airplanes” (Boeing’s 2003 Current Market Outlook). Airbus’ predictions were shifted toward the larger aircraft segments, citing “3,842 twin-aisle aircraft;...
Words: 2595 - Pages: 11
...Outsourcing of the Boeing 787 | | | | | | |David Mahmoodi | |01/31/2009 | |How much of a service can be outsourced before the benefits stop outweighing the costs? For the first time in the history of the company, Boeing is| |outsourcing more than 70% of the production of its new aircraft the 787 Dreamliner. This is not just the production or assembly of the plane, but | |also the specifics of engineering the individual parts. With so many parts being designed and assembled in other countries there have been | |communication issues, lengthy delays and increased costs. This paper will explore the benefits and costs of outsourcing such a big public project. | |It will discuss how Boeing or similar companies can better mange outsourced projects or more efficient alternatives to outsourcing them all | |together. ...
Words: 7024 - Pages: 29
...Aircraft Manufacturing Industry Outsourcing in a Global Market Aircraft Manufacturing Industry Outsourcing in a Global Market Table of Contents Table of Contents 1 Abstract 2 Introduction 3 Growth of Outsourcing 5 Benefits of Outsourcing 6 Disadvantages of Outsourcing 8 The Global Market and Aircraft Manufacturing 9 Conclusion 12 Bibliography 13 Abstract The aircraft manufacturing industry is dominated by a few key players: Bombardier, Boeing, and Airbus being the most prominent. It is in a constant struggle to deliver ever more intricate machinery that are safe and reliable - while maintaining a competitive cost structure. With countries such as China and India becoming more commercialized, air travel will continue to grow at a consistent rate; however, steady growth is not without its challenges: rising fuel prices and mounting material costs have forced aircraft manufacturers to look for other ways of maintaining a competitive structure. One way of maintaining a competitive cost structure is through outsourcing of non-fundamental core jobs. This practice has become so prominent with some of the world’s major aircraft manufacturers that the parts used to build planes today come from all over the world. The airline industry is a fairly resilient industry, even with slow economic times the need for people to travel for business and pleasure is still present. Outsourcing of non-core jobs may be the answer for cost efficiencies but can have serious...
Words: 3083 - Pages: 13
