Competitive Strategies Case Study

Airbus vs Boeing - Contrasting Views for the Futur

OR

Abstract:
Since its inception, Boeing had been enjoying a virtual monopoly in the commercial aircraft industry, but was threatened by the advent of the European aerospace company, 'Airbus S.A.S.’ (Airbus), in 1970. Since then, Airbus gradually achieved a leadership position in the market by dint of its innovative technologies and government funding. For the first time in 2003, Airbus became the world's largest manufacturer of commercial aircrafts. The competition among the two companies, attained a new dimension in 2000, when Airbus announced the development of the world's biggest passenger plane - the A380. Airbus touted the A380 as the future of commercial aviation, as it envisaged a huge demand for larger aircrafts. In contrast, Boeing asserted, that smaller and faster aircrafts would rule the market. In keeping with this, Boeing announced its plans to develop the 7E7 Dreamliner. Analysts felt that if the A380 failed, it would become a burden as Airbus had invested billion dollars on this model. This case study offers a discussion on the factors that have driven Boeing and Airbus to adopt different strategies and whether Airbus would proceed with the huge investment, amidst the uncertainty in long-term demand. The case provides a detailed account of the structure of the commercial aircraft industry and the prevalent nature of competition.

Pedagogical Objectives:

• To understand the structure and competitive forces of commercial aviation industry
• To analyse the factors and elements of competitive strategy adopted by Boeing and Airbus
• To form and analyse SWOT of both the companies
• To form investment pay off matrix for Airbus.

Keywords : Airbus; Boeing; Competitive Strategies Case Study; A380 super-jumbos; 7E7 Dreamliner; Launch aid; Rise of Airbus; Two divergent philosophies; Commercial aircraft manufacturing; Airlines

Contents : 
Jumbos To Super Jumbos
Airbus: The Genesis
Contrasting Views
A Risky Proposition
Pictorial Comparison Of Boeing 747 & Airbus A380