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Airbus vs Boeing

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PROBLEM STATEMENT:Should Airbus and Boeing come together to lay the foundation of what could become the future of commercial aviation the VLCT ?

SWOT ANALYSIS OF AIRBUS STRENGTHS WEAKNESS The concept of deferred-seat plan enabled Airbus to sell aircraft as if they contained fewer seats. Much of the R&D has been financed by the European nations. Advantage of A320 : Fly-by-wire technology It did not shut down the line if it did not have orders which resulted in the production of white tails Product diversification is not wide and market share is also less

OPPORTUNITIES New aircraft to gain market share

THREATS Stiff competition in the industry Regulations on subsidies provided to Airbus


Worlds largest exporter Largest commercial aircraft manufacturer 62% revenues are generated from customers outside U.S The prices were non-negotiable on 747 Jumbo Jet. Dominated in every segment of commercial aircraft. Large customer base is viewed as a marketing and sales asset Good supplier network across the globe

Heavily dependent on suppliers and any changes could adversely affect the production of the plane Dependency on U.S government and subsidies

OPPORTUNITIES A panel representing both the U.S and Europe will help in increasing transparency in the industry Regulations on subsidies provided to Airbus New aircraft to gain market share

THREATS Sourcing and qualifying a new supplier could take a year or more Subsidies given to airbus by the European government Intense competition from Airbus Increasing fuel prices


Bargaining power of buyers(Moderate) The bargaining power of buyers is high for Airbus and low for Boeing as product diversification is high for boeing For example, prices were non-negotiable for Boeing 747 Threat of substitutes(High) There is intense rivalry between Airbus and Boeing and due to which the threat of substitues is very high .

Threat of new entrants(Low)

Due to complex technology and lot of government regulations, threat of new entrants is low

Rivalry among existing firms(High)

There is high degree of rivalry between Boeing and Airbus regarding

Bargaining power of suppliers(Moderate)

It is low for Boeing due to its product diversity and bargaining power is high for Airbus

RECOMMENDATIONS We do not recommend Airbus and Boeing to carry on with the joint venture because :

Airbus is having relatively less market share compared to Boeing and very recently got profit. So, even though a joint venture with Boeing makes business sense, it will not help Airbus to create an identity for itself. To further the point, there is a bone of contention between Airbus and Boeing regarding the difference in government regulations and with the joint venture, it would only become more complicated. With the cultures differences between both the countries , it is better to work independently so that they can inspire each other and work as collaborators.