Review of the Boeing vs Airbus Case Study

Market Share Airbus will launch their new large, long distance plane A380 in 2006. This plane can be a dreadful competitive product to Boeing. If Boeing falls behind regarding innovations, fuel efficiency and other attributes of a long haul airliner, it will soon lose its market share. In order for Boeing to compete in the aviation industry, it is crucial to take on some risk and develop this new 7E7 project. This helps the company to fight against its competitors and recover from the slump in the industry.

In 2000, Airbus Industrie’s Supervisory Board was making the biggest decision in the company history: whether Airbus should commit to develop world’s largest jumbo jet. At that time, there are only two major commercial jets manufactory companies: the younger Airbus and the bigger Boeing. Boeing had been at the forefront of civil aviation for over half century. Airbus was founded in 1970as a consortium and merged into a new company known as European Aeronautic Defense and Space Company. Airbus developed “fly-by-wire” technology and “cross crew qualification” technology to compete with Boeing in large jets (those with 70 or more seats) market. While Airbus was booked more than

This is a case about three different companies dedicated to the manufacturing of aircrafts. Those three major companies are: Boeing, Airbus Industry and McDonnell Douglas; each of one was struggling to produce enough aircraft to satisfy a seemingly unquenchable need for passenger and freight transport around the world, developed in this form many kinds of aircrafts in different models and styles.

The main barrier to entry in the aircraft manufacturing market is the sheer size of the industry and the amount of capital investment required to make the aircraft. Moreover, the concerns of the aviation industry are not similar

At the period when the Concorde was made, traveling by plane was not something that was considered affordable. Consequently the number of passengers was limited, thus making airplane manufactures unpressured to make bigger planes. However, progressing into the 1990s, air travel became cheaper and accessible for more people, requiring airline companies to carry more people on existing routes. Consequently aircraft manufacturers are forced to create larger capacity airplanes. Based on this new paradigm and demands from airline companies, the Boeing 777 was conceived. The new airliner permits approximately three times of the capacity of the Concorde while allowing much greater

Weaknesses that Airbus has, is that due to their structure, and having a multi country consortium, they were slow to make decisions. In the 1980’s Airbus experienced difficulties in financing the A-320 project, since all the Airbus partner governments had not approved the program (Carpenter, M. A., & Sanders pg. 613). Airbus was slow in its decision making process because the partners of the consortium tried to safeguard its own interests rather than make decisions that would benefit them as a whole (Carpenter, M. A., & Sanders pg. 613).

In 2000, Airbus was considering launching a super jumbo jet that they called A3XX. This aircraft could seat 550 – 900 passengers, which classifies it as a type of “Very Large Aircraft.” The defining feature for Very Large Aircraft (VLA) was that it could hold more than 400 passengers (or carry more than 80 tons of freight). Boeing was a monopolist in the VLA market, since the only other VLA available for purchase was their 747 aircraft. For Airbus, the question of deciding whether to launch A3XX was a question of whether they (a potential entrant) should attempt to break into the market of an incumbent monopolist (Boeing).

Boeing produced several hundreds of B-17 Flying fortress during World War II which became the U.S Bomber. In 1950’s Boeing faced a tough competition from its opponent McDonnell-Douglas which was good at manufacturing propeller aircraft. Due to the increased reputation of its competitor, Boeing entered into the field of manufacturing commercial Jet-aircrafts in a

The case study report draws attention to the competition between the two big shots of the aviation market. In 1990, Airbus decided to enter the Very Large Aircraft (VLA) market by introducing and developing the A3XX as they wanted to compete with the market’s dominator, Boeing and its infamous 747. In the beginning both firms independently explored the practicability of launching a superjumbo and then decided to collaborate on the project.

The market structure for the Dreamliner is that of an oligopolistic nature which means there are few aircraft manufactures who sell large quantities to its buyers. With Boeings biggest competitor Airbus unable to compete with the Dreamliner product, Boeing has the chance to take over the market for commercial aircraft.

The industry analysis can be performed by evaluating the ability of all firms to operate profitably within the airline industry. Porter’s five forces of competition model is a perfect tool to perform such analysis. The threat of new entrants is moderately high since President Carter signed the Airline Deregulation Act in 1978, removing U.S Federal Government control over fares, routes and market entry. Therefore, the industry has become less regulated and allowed many new firms to enter the market. Thus, the airline industry requires a lot of capital investments which can disinterest some investors. The bargaining power of buyers rests in the hands of the customers by reducing the price or by asking greater levels of service. It is highly powerful because customers can easily switch to another airline or even another transportation method. They also have the option to deal with a travel agencies that will recommend the best airline according to their needs. The bargaining power of suppliers is high because it is dominated by few large companies. Airbus and Boeing are two manufacturers that have both created a duopoly for the past 15 years in the supply of aircraft (business insider, 2017). The threat of substitute is very high, especially in short haul. There are many alternatives to air travel such as driving, taking the train or the bus. The intensity of rivalry among competitors is also high because there are numerous competitors selling a

In addition, Airbus has received over half of the total large aircraft orders for the first time in 1999 thanks to the “cross crew qualification” feature. Capturing more than half of the very large aircraft (VLA) market with the A3XX would constitute an

Hard to compete against the large airlines not only for customers but space at the airports for their airplanes.

5. Boeing VS Airbus 5faster cross-country flight service. During this period, Boeing launched Boeing 707 whileDouglas manufactured its DC models, DC-8 being the latest model in that decade .11Insubsequent years, Boeing and Douglas competed profoundly to vend their planes byproposing conventional deviations of a basic design that would serve airlines’ particularneeds such as big wings for long variety. These

In today's marketplace, distinct differences in the way competitive products work have become increasingly rare. But functional product differentiation is exactly what the rivalry between the Airbus A380 and the Boeing 787 Dreamliner is all about: Two companies with fundamentally different products, based on diametrically opposite visions of the future, engaged in a Hatfields versus McCoys battle with billions of dollars at stake.