a) Provide a historic perspective regarding how the rivalry Between the US and the Soviet Union unfolded.
It started in the early 1990s. The Soviet Union made regulations to control over many aircraft manufactures. Many brands and companies were merged. During the years past the collapse of the Eastern Bloc, large airline manufactures left the market because of bad sales. Therefore, only Boeing and Airbus stayed on this market. We call this situation duopoly. In past ten years, the competition was very tight. At first, Boeing had advantages over Airbus in orders. However, in past years, Airbus received more orders than Boeing. In addition, Airbus is the winner in the number of the aircraft delivered, but Boeing is not far behind.
b) Identify at least three (3) distinct factors that provided Boeing and Airbus with a competitive advantage over each other, and three distinctive missteps by each firm that caused it to lose a competitive advantage.
Boeing
Three distinct factors:
Technology. Boeing 787 is made of composites that reducing fuel burn to some extent Even though Airbus improved its technology, the technique of Boeing is more advance.
Strong outsourcing capability: Boeing has maintained a long and outstanding relationship with Japanese suppliers who provide high quality components and efficient assemble line.
Historical prestige: Boeing has a long history to provide trusted services and a good public image.
Three distinctive missteps:
Battery issues: It is about electricity problems that cause several safety incidents such as fires accidents. Battery issues result in side effect of Boeing’s public image. Supply chain: Boeing lacks of experience in managing a multitier supply chain, which results in that Boeing cann...
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Reference:
1. Parimucha, J. (2010, November 3). Airbus vs Boeing: The history in short.WhichAirline.com. Retrieved April 25, 2014, from http://www.whichairline.com/news/airbus-vs-boeing-the-history-in-short
2. SUBSIDY DOGFIGHT – BOEING VERSUS AIRBUS. (n.d.). Global Trade and Logistics. Retrieved April 25, 2014, from http://www.globaltradeandlogistics.net/?p=39
3. Competitive factors in the Aircraft Manufacturing Industry (Airbus: Challenger to Market Leader). (2011, March 17). Competitive factors in the Aircraft Manufacturing Industry (Airbus: Challenger to Market Leader). Retrieved , from http://assignmenthelpseries14.blogspot.com/
4. How Your Competition Affects Your Strategic Plan. (2011, November 5). Corporate Strategy Consulting. Retrieved , from http://www.methodframeworks.com/blog/2011/how-your-competition-affects-your-strategic-plan/index.html
Boeing is a very interesting company. Boeing may only be one company but they compete in two different markets: commercial airlines and the defense industry. The main competition in the commercial airline market is Airbus. Airbus and Boeing seem to have the commercial airline industry in a chokehold basically having no other competitors. Since the industry has high barriers to entry they will not see much competition anytime soon. Boeing is the American leader in commercial airplanes and Airbus is the European leader, which means they are constantly battling. Their competing aircrafts are the Airbus A380 and the Boeing 747. Both companies have many variations of their respected aircraft and according to Business Insider, Airbus’ A380 outranks
The Boeing Corporation is one of the largest manufacturers in the world. Rivaled only by European giant Airbus in the aerospace industry, Boeing is a leader in research, design and manufacture of commercial jet airliners, for commercial, industrial and military customers. Despite enjoying immense success in its market and dominating an industry that solely recognizes engineering excellence, it is crucial for Boeing to ensure continued growth through consistent strategy formulation and execution to avoid falling behind in market share to close and coming rivals.
As aviation matured, airlines, aircraft manufacturers and airport operators merged into giant corporations. When cries of "monopoly" arose, the conglomerates dismantled.
Boeing 787 Dreamliner was first announced to the public in January 2003 with approximated costs of five billion dollars , since the sales of the aircraft were high it was supposed to enter commercial service during 2008 but the building up of aircraft seemed more anticipated than expected , since the management decided to use composite materials as an alternative for traditional metals as composite materials are lighter , stronger , cheaper and also resistance to wild variety of chemical agents including acid rain and salt spray as these are the conditions under which metals suffer , Boeing also shared their views in development of air craft with suppliers which effected in a project significantly more anticipated than expected . More than three years later after the project exceeded the estimated budget at last 787 entered commercial service in September 2011.
The Boeing 737 is one of the most popular aircraft ever produced. Over 7700 in all variants have been produced, with an additional 11,275 aircraft on order. This makes the 737 the most popular jetliner to date. The 737 has a wide variety of uses, and still remains extremely popular and under high demand. Because it is such a widely mass produced aircraft, it is also a target for constant aerodynamic improvements. Boeing has looked at everything from the design of the anti-collision lights, to the reduction of small gaps in the airfoil. This has created an aircraft that is extremely aerodynamic and efficient at any task it performs.
With only a few large companies across the globe (Boeing, MD, and Airbus), the commercial aircraft industry essentially exhibits the qualities of an oligopolistic competition with intense rivalry. Here is an analysis of competition in the commercial aircraft business using Porter’s Five Forces.
The new entry is likely from rich Gulf nations, China, and India of low budget planes around the globe. The airlines from the Gulf nations have placed orders with Airbus and Boeing that are valued in the billions. The deliveries are expected in the next decade. The demand will grow in the production of advanced narrow-body airplanes, such as Airbus, A321 and Boeing, B737 Max. The growth that is expected in the next decade, more consumers will be flying to their destinations. The airlines in the United States are expected to have a profit margin over the next decade. Resulting, from economic growth, and the demand for aircraft service. Buyers are expected to have a lot of power in the next decade, resulting in bargain prices for buyers. The competition will increase with intense rivalry in the aviation industry. The contracts for the aircrafts are totally from airplane
Boeing moved for right track. They decided to compete with other global brands in terms of public image and goodwill. As Phil Condit, Boeing CEO and chairman, announced at Farnborough air show in 2000, this company goals are focusing on: running healthy core businesses, leverage the company’s strength into both new products and services, and open new frontiers. Achieving these major goals can improve Boeing public image both domestically and internationally. There are other areas of weakness existed within this company such as adaptation to new business and communication methods. Boeing must have more participation in areas of public to prove that it is seeing beyond the traditional boundaries.
Airbus A380: How the Airlines Compare." Busineesstraveller.com. Panacea Publishing, 31 Aug. 2013. Web. 1 Dec. 2013.
Michael, D. (2010, June 9).Emirate Airline Orders More Airbus Planes, Challenging Germany’s Lufthansa. The Wall Street Journal, p.B1.
... Airbus pretend to accomplished their missions and goals by using strong strategies such as competing with the highest standards of quality and safety.
When an airline does not have a sustainable competitive advantage, it does not have any properties of differences from there competitor and turns to a dangerous price war. The sustainable ...
Airbus industry was formed as the conglomeration of western European countries which included Britain, Germany, and Spain and was led by France. During that period, Boeing was the largest manufacturer of the commercial aircrafts and held the monopoly in the market, which brought the aviation industry of the European nations into their senses. This led to the formation of France led Airbus. Now, Airbus is one of the leading manufacturers of aircrafts and has a product line of aircrafts which range from economy to luxury and from 150 to 850 carrying capacity. It also captures almost half the market. The factories of Airbus are all over Europe, headquarters being at France and have fully owned subsidiaries, spare and service parts centers spread
In 1990 Boeing was set to introduce the 777, the world’s largest and longest haul twin-bodied jet at the time. The 777 would serve the medium and long haul markets like the expanding Asian market. Boeing’s main competitors, Airbus Industries and McDonnell Douglas, had already announced plans to produce airliners that would compete directly with the 777. Analysts believed that the intense competition between the manufacturers would serve to depress prices for the airliners. Lower prices for aircraft would mean lower earnings.
Friehe, T., and Curti, H. (n.d.) Overrated remedies, weak competition: An analysis of the Lufthansa/Austrian Airlines alliances in Germany-to-Austria air traffic market. Retrieved 26 November 2006 from www2.jura.uni-hamburg.de/le/Overrated%20Remedies%20and%20Weak%20Competition.pdf.