Strategy Management: Boeing / Airbus

Résumé du document

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.

Extraits

[...] Boeing on the other hand can focus on a long range fuel efficient aircraft which will cater to the segment which needs cost effective operations. Finally, if Boeing does not change quickly its way of functioning, the company will continue to lose shares in the market and Airbus will unchecked by any other will become the best in the market. Indicative bibliography by Oboulo.com Boeing Versus Airbus: The inside Story of the Greatest International Competition in Business by John Newhouse. [...]

[...] After all these analyses, we can say Boeing has to focus on its international operations. It seems to be that Boeing has a very large number of suppliers. In order to reduce the fixed costs, they decided to minimize their suppliers. They should continue to decrease the number of suppliers especially in China because it is easier to negotiate prices if you buy in significant quantities from specific vendors. And what's more, it is easier to create a good and long lasting relationship with their suppliers if there are a small number of suppliers. [...]

[...] 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'. With this strategy, the company will be more competitive against Airbus. [...]

[...] So a tight structure allows tight control, it is very easy to manage work of the employees because the information comes from their central structure. The strategy is based on the global scale efficiency. Even the supply-chain knowledge is obtained from the center to the regional subsidiary to ensure the implementation of the global process. Boeing's regional offices are very small and do not employ a lot of people; their mission is only to provide sales support to the locally based airlines. [...]

[...] Management strategy of Boeing and Airbus 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 of the Asian market of the US market of the Latin American market and of the European market. The second competitor in the market was Airbus, with of the Asian market of the US market of the Latin American market and of the European market. [...]