Airbus Case Study Erau

Airbus: From Challenger to Leader

Case Synopsis

Boeing enjoyed global market leadership in the aerospace business for several decades. As is all too common for market leaders, Boeing fell victim to organizational inertia. The company failed to revamp its production process and come up with new and innovative products. In contrast, Airbus emerged as a major competitor of Boeing within two decades of its inception. As a new company, Airbus did not suffer from inertia, but rather introduced a flurry of innovations in its planes. The manufacturing system was also very lean as Airbus setup its product plant relatively recently (compared to Boeing). It seems that in the head-to-head competition, Airbus presently has the upper hand over Boeing. Boeing must find a way to reinvent itself to regain its position as a global aerospace leader.

Case Questions

1. Conduct a five forces analysis for Airbus. What industry forces pose the most serious challenges to airbus?

One of the five forces that poses the most serious challenge of rivalry. Airbus and Boeing are competing against each other for customers and best prices. Airbus found a niche in the US market for smaller aircrafts. The company was innovative in its design and introduced new products to market. Boeing was not successful in developing as many products as Airbus. Another challenge would be the bargaining power of the buyers. Buyers will choose the product that is more cost effective. Airbus is also in a position to charge lower prices than does Boeing because of its comparatively leaner manufacturing system.

2. What preemptive activities have Airbus taken to neutralize the industry forces that challenge its profitability?

-Airbus’s reorganization has drastically increased company’s ability to compete with Boeing and earn its leading market share on the aerospace industry. By 2001 Airbus was incorporated into an integral company with EADS and BAE owning an 80% stake and a 20% stake...