This case was made in 2004. It explains the performance of the aerospace industry at that time. Two companies shared the market, Boeing and Airbus SAS. In 2002, Boeing was the leader in the global market, with 70.7% of the Asian market, 67.2% of the US market, 56.9% of the Latin American market and 39.3% of the European market. The second competitor in the market was Airbus, with 23.4% of the Asian market, 23.3% of the US market, 16.6% of the Latin American market and 29.9% of the European market. All the other companies were not big enough to fight against the duopoly. The case explains further that Airbus is in the process of developing new technologies compared to Boeing and is on the way to winning better market shares while Boeing will lose some.
What can make Airbus so successful? How can Boeing hold on to its position as the number one in the market?
To answer these questions, we will analyze the strategic moves that Boeing should undertake in order to achieve profit stability, increase its market share and align its global strategy with its global structure.
Tags: Boeing business strategy, Boeing and Airbus strategies, Boeing management style, Boeing on the Asian market, Airbus vs Boeing
[...] In order to stay competitive in this area, Boeing should develop its partnership with Ryan-air, which is a European low cost company; because Airbus signed a contract with Easyjet, the other European low cost company. With the purpose of focusing on low cost companies, Boeing should further develop cheaper aircrafts, smaller than Airbus A single order can generate a lot of profit as well. For example, in 2002 easy jet ordered many A-300's of Airbus which is wide bodied medium range aircraft . [...]
[...] But in 2006, Boeing's market share slightly decreased by while Airbus's increased by How did Airbus achieve it? This is due to the fact that Airbus chose to replace its old aircraft with another. The losses appeared for Boeing because of its failure in renewing its product range for over ten years. Airbus, on the contrary spent 40 to 50 billion USD to improve its product range. Moreover, Airbus is a consortium of aerospace companies of Germany, the UK, France and Spain. [...]
[...] To align its global strategy with its global structure, Boeing used a lot of outsourcing in order to focus on the development of new aircrafts. Today, outsourcing has incredibly developed especially in the Asian countries. So Boeing has to act like a connector to all the aircrafts. That means Boeing can focus on integration, assembly and development. The company will earn time and money. But Boeing will have to be careful on the element of quality. Boeing has to focus on its core business and should let specialized suppliers do the works'. [...]
[...] Moreover, Boeing has to invest more than present in their research and development division, Just like Airbus did in order to be competitive in terms of products. It also has to focus on low cost companies because the customer's demands change and people do not want to spend a lot on flights. There is already a big argument that the airbus is trying to produce one of the biggest aircrafts in the world, which is the A380 A project which will elevate the company into new heights of [...]
[...] The global traffic to Asia decreased by and passenger traffic to China by 45%. It was a crisis for Asian Airlines which lost 160 million USD. The competition is really hard in this case because Boeing and Airbus are the two main companies in this sector and they compete with each other to offer their best . The forecasts for 2006 were incredibly ambitious particularly for Airbus. Boeing is also expecting to increase its market share in the Asian market. [...]
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