AIRBUS

Airbus: From Challenger to Leader



Table of Contents

Section One3

Background and information3

Overview of the report4

Basic data5

Section 28

Problems faced by airbus8

Critical review theory11

Paradoxes of Strategic 'Planning'12

Applications14

Conclusions14

Recommendations15

Section 316

Differentiated strategy between airbus & Boeing16

Section 417

Structure of aerospace industry17

Critical review theory19

Application21

Conclusion21

References24

Bibliography26

Airbus: From Challenger to Leader

Section One

Background and information

IN 2007? with the imminent commercial launch of the A380 and the 787 Dreamliner by Airbus and Boeing respectively? the two aircraft manufacturers were caught up in a dance seen by newspapers as a contest of strategy? (Griffith 2009, p.p. 125-253 2009) but which was also experienced by each as exigencies of sustaining a suitable identity. Each identity emerged in the struggle for some footing amidst chaos? struggles for control that settled out over time into locations within networks of ties - cross-stream with other plane makers? up-stream with endless suppliers and down-stream with as many airlines as possible. These networks and the accompanying disciplines of actual production get encrusted into institutions? here an aircraft industry that marshals producer firms - ones that have survived thus far - within rhetoric's? (Lamberti and Noci 2009, p.45-125) variously of delivery? service and innovation? along with taxpaying and subsidy-receiving.

Overview of the report

Airbus and Boeing compete in manufacturing large commercial airliners. Airbus' product line includes the A330 ? A340 ? and the mammoth A380 which first flew in April 2005. In 2005 ? Airbus received orders for 1111 aircraft and earned revenue of €22.3 billion. Boeing's product line includes the 737 ? 777 ? and 747. In 2005 ? Boeing received orders for 1031 aircraft and earned revenue of $22.7 billion from sale of commercial aircraft. Until 2001 ? Airbus was a marketing consortium established under French law as a “Groupe d'Intérêt Economique”. The four shareholders - Aerospatiale- Matra (37.9%) ? British Aerospace (20%) ? Construcciones Aeronauticas (4.2%) and Daimler Aerospace (37.9%) performed dual roles as owners and industrial contractors. Most major decisions required unanimous approval of the shareholders.

Airbus was obliged to distribute production work among its shareholders according to political as well as economic considerations. Then ? Airbus was re-organized into a single fully integrated limited company. The objective was to streamline operations across national boundaries ? reduce costs ? and speed production. The re-organization coincided with a consolidation of Airbus market position. As Figure 1 shows ? from 31% in 1996 ? Airbus had steadily increased its share of the market to 57% in 1999 ? but then dipped sharply to 47% in 2000. Following the re-organization ? Airbus recovered and maintained its share in the mid- to high 50s until 2005.

Figure 1: Market Share ? 1996-2005

In the present report we explore some aspects of these problems. We make theoretical lay out of the strategies adopted by airbus as they take up strategies. We work on how network and institutional infrastructures impact the viabilities of strategic stances? along with rhetoric? (Kim 2009, p.327-335) and point out nesting of levels. We will bracket discussion of industries with two special realms? military and fashion.

Basic data

Warnings of a new economic downturn in the aviation ...