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boeing airbus case study
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Airlines all around the world have to look into different types of aircrafts that best fit their needs for their passengers and the distance between destinations. Boeing and Airbus, two of the world’s biggest commercial airplane manufactures in the world have been competing to get airlines attention on when they are looking to expand their airplane fleet. This competition has been characterized as a duopoly in the large airliner market since the early nineties has when a series of mergers in the aerospace manufacture industry merged or ceased operation. Today we have to look at both competitors to see who has best airplanes in the jet airliner market. Both Airbus and Boeing have a wide product spectrum ranging between wide and narrow body aircrafts covering many combinations of capacity and range. These two companies compete head to head with similar airplanes and styles. With the upcoming generation of young pilots coming into the aviation industry, the market needs high tech airplanes for airlines to buy to help this new generation move in to place. When airlines are looking at new planes to buy, they need to look at all the different types of planes that covers range and capacity. Airlines have to make a decision on what best fits their needs when deciding between a Boeing aircraft and an Airbus aircraft.
Boeing is a company that dates back almost a century ago in Seattle Washington by William Boeing. Back in 1916 when Boeing was founded, they manufactured sea planes right out of the Seattle bay. Twenty years later, Boeing’s revolutionary plane was introduced. The Boeing 247 was created and is considered to be the first modern airliner to fly around the world. Boeing operated the planes for commercial purposes. Boeing started u...
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...Geo) Again, the Boeing 747-8 wins for better price at $300 million when the Airbus A380 is priced at $318 million. For when it comes to the best at this category, Airbus offers the best wide range double decker aircraft in the market (Warwick, 2012) (aviatorjoe.net) (WILLIAMSON, 2013) (Frankfurt, Haria 2013) (James, 2013).
In the last 10 years (2003–2012), Airbus has received 7,714 orders while delivering 4,503, and Boeing has received 7,312 orders while delivering 4,091 (Aircraft Compare 2013). Even though competition is intense, each company regularly accuses the other of receiving unfair state aid from their respective governments. But what really matters is what fits the airline’s needs. For longer ranges, Airbus builds perfect aircrafts for that sector. It’s a tossup for the midrange sector, but then it comes to shorter ranges, Boeing seems to have best fit.
Boeing is a very interesting company. Boeing may only be one company but they compete in two different markets: commercial airlines and the defense industry. The main competition in the commercial airline market is Airbus. Airbus and Boeing seem to have the commercial airline industry in a chokehold basically having no other competitors. Since the industry has high barriers to entry they will not see much competition anytime soon. Boeing is the American leader in commercial airplanes and Airbus is the European leader, which means they are constantly battling. Their competing aircrafts are the Airbus A380 and the Boeing 747. Both companies have many variations of their respected aircraft and according to Business Insider, Airbus’ A380 outranks
The future of BA and that of many other airlines is going to depend on
Despite the uncertainty and inherent risks, however, even if WACC exceeds IRR, the board may be well advised to accept the project. It's expected that in the first few years, Boeing will incur more expenses that income. The revenues will come at a later date when the 7E7 planes are delivered. The project will have to be evaluated periodically and management will have to make changes to ensure that the company is profitable based on current and future conditions. The board's prerogative is not to give Airbus a profit sanctuary' by not accepting the project but rather to maintain or increase its market in the industry even if it's not profitable in the shot-run. Boeing has deep pockets' and should be willing to challenge its competitors.
Boeing is the largest aerospace company and the largest manufactor of commercial and military aircraft in the world. Boeings military aircraft come equipped with missiles, satellite, launch vehicles and advanced information and communication systems. Boeing is the number one U.S. exporter when it comes to sales. Boeing’s management must understand the importance of the legal, ethical and social responsibility of their organizations. All of the above mentioned will have an effect on the planning function of management.
The article by Binyamin Appelbaum and Christopher Payne demonstrates the complexity of one of the world’s biggest supply chains. It was interesting to learn how many different components went into the production of the airplanes. The different geographic locations in which the parts were built was fascinating as well. I had no idea that a manufacturer in Alabama would have parts shipped in from places as far away as Wales and France. The amount of coordination and collaboration needed to maintain efficiency within Airbus must be incredible. Later in the article I learned that the small town of Mobile, Alabama had been trying to develop an airplane factory for more than 30 years. It wasn’t until 2012 that they finally began assembling passenger
The Boeing Corporation is one of the largest manufacturers in the world. Rivaled only by European giant Airbus in the aerospace industry, Boeing is a leader in research, design and manufacture of commercial jet airliners, for commercial, industrial and military customers. Despite enjoying immense success in its market and dominating an industry that solely recognizes engineering excellence, it is crucial for Boeing to ensure continued growth through consistent strategy formulation and execution to avoid falling behind in market share to close and coming rivals.
"It was the jet Boeing didn't build that averted what could have become one of the worst crash landings in the company's 91-year history--and cleared Boeing to conquer the skies again."(Masters, 2007). Boeing's Management team's work hard to plan what project's will be best for customers, lead to the largest returns to shareholders, and keep a reputation of being a world leader in the aviation industry. "In October 2002, executives of the aircraft manufacturer met with a group of global airline representatives at a conference center on the Seattle waterfront. The executives were trying desperately to figure out what to build next to hold off a soaring Airbus."(Masters, 2007) Boeing had made plans to build a high speed jetliner prior to this meeting. Through careful planning and expert decision making Boeing officials found that the world was more interested in comfort and efficiency. Boeing's high speed aircraft would have been a huge economic let down because of the huge price tag and expensive operating costs. After that meeting Boeing changed plans to make the Dreamliner which is a more cost effective and comfortable aircraft that has enough orders to keep Boeing busy building the aircraft for customers until the year 2015. While Boeing has spent many resources planning what to build, Boeing is now faced with the problems of how to meet customer demands of the new aircraft.
...gainst all odds, it has become the companies greatest asset. In order to protect their asset, Boeing is not becoming complacent, and is instead striving to make a wide variety of aerodynamic improvements.This has cemented the 737 as a market leader, and it will retain its lead for decades to come.
Technology Innovation: - Boeing should carefully analyze the market to evaluate the trends in the airline industry and aggressively invest in a new product line (top dog strategy) that could counter Airbus’s A380.
Airbus and Boeing have developed similar capabilities, and an intense competition to be the number one in aviation. The market is a duopoly market, resulting in a low profit margin for both companies. There is slow industry growth in the aviation industry, and no clear market leader. The barrier to exit is high, which leads to intense rivalry between Airbus and Boeing.
Boeing moved for right track. They decided to compete with other global brands in terms of public image and goodwill. As Phil Condit, Boeing CEO and chairman, announced at Farnborough air show in 2000, this company goals are focusing on: running healthy core businesses, leverage the company’s strength into both new products and services, and open new frontiers. Achieving these major goals can improve Boeing public image both domestically and internationally. There are other areas of weakness existed within this company such as adaptation to new business and communication methods. Boeing must have more participation in areas of public to prove that it is seeing beyond the traditional boundaries.
Airbus A380: How the Airlines Compare." Busineesstraveller.com. Panacea Publishing, 31 Aug. 2013. Web. 1 Dec. 2013.
Michael, D. (2010, June 9).Emirate Airline Orders More Airbus Planes, Challenging Germany’s Lufthansa. The Wall Street Journal, p.B1.
Airplane – With the only two main airplane suppliers in the industry, Boeing and Airbus, gives EasyJet a low bargaining power making the suppliers to have a high power at determining what price to sell its airplanes, however, EasyJet can increase its bargaining power if it looks to buy in bulk due to the fact that it is internationalizing into Nigeria so the demand for airplanes would be high.
In 1990 Boeing was set to introduce the 777, the world’s largest and longest haul twin-bodied jet at the time. The 777 would serve the medium and long haul markets like the expanding Asian market. Boeing’s main competitors, Airbus Industries and McDonnell Douglas, had already announced plans to produce airliners that would compete directly with the 777. Analysts believed that the intense competition between the manufacturers would serve to depress prices for the airliners. Lower prices for aircraft would mean lower earnings.