Airline Wars: Boeing vs. Airbus

Question 2

This case analysis presents the competitive relationship between Airbus and Boeing at a time when the latter was undergoing management and financial crises. The case clearly reveals how corporate executives are vulnerable of fighting to the last war, just like military generals. The battle line for the two rivals was drawn from the 1970s, and is currently entering new and higher grounds. The commercial airline business is marred with lengthy booms that compel companies to demand more aircrafts before periods of little demand creep in. Other weak players had no choice but to withdraw from the already dominated market

Question 3

            Real and potential problems could be seen in the business model of Boeing, and in the competitive relationship between it and Airbus.

            Boeing’s outdated production systems made it remain behind in the wake of innovation and technological change. Another problem that faced Boeing includes too many plane models and unreasonable production objectives. They presented overwhelming logistics for the management at a time when its rival was capitalizing on the aggravated demand.

The two airline manufacturer companies face off with each other in a volatile industry.

Question 4

There are environmental forces at play in the airline wars between Airbus and Boeing. They include technological change, drastic fall in airplane demands, the management climate, increased costs of production and expenses, intense competitive pressure, increased demands by regulators,

The major environmental forces include rapid changes in consumer tastes and preferences because of technological change and intense competitive pressure (Claycomb & Hartley, 2014).  The demand for a larger market share pushed minor aircraft manufacturers out of the airline industry, paving way for the two giants to dominate.

Question 6

Lay-offs are one of the most demotivating elements to the current workforce. The restructuring process is demoralizing because it makes them feel inadequate and insecure as far as their future participation in the company is concerned. Working as a mechanical engineer in the disturbed Boeing organization is one of the most difficult tasks. The situation is well explained during the 1990s sudden growth of plane demands (Claycomb & Hartley, 2014). Unfortunately, the company did not prepare for the drastic fall in demand, forcing the management to lay off a significant size of its human resource.

Question 7

The strategy of betting the Super-Jumbo A380 passenger jet by Airbus was a strategic marketing action aimed at fulfilling two objectives. It sought to create an impression to its rival; Boeing, as well as passengers in the entire airline industry that it was the undisputed manufacturer. The move is a marketing strategy aimed at securing its current market share, while striving to invade its rival’s customer base. The announcement is considered calculated because its announcement coincided with the decline of Boeing’s market share because of its production misfortunes. Its production costs are at $ 239 million, and there are already 72 orders in its records (Claycomb & Hartley, 2014).  

Question 8

The passenger friendly planes developed by Airbus offered it a competitive advantage against its rival. Aside from carrying a large amount of passengers at the same time, they were faster than earlier aircrafts. The high relatively high cost of manufacturing is a clear sign that they made greater profits and funds to combat competitive pressure. It is more efficient as far as fuel conservation is concerned. The plane comprises a 478 meters square cabin space, making it to be 40% larger than the second largest plane, which is the Boeing 747-8 (Claycomb & Hartley, 2014). Further, the Super-Jumbo A380 attracted positive attention for the Airbus.

Question 9

            Various lessons, concerning how to combat arrogance at the workplace, can be established from the case of Boeing. It is essential for managers to consider long-term goals in the wake of short team objectives and pleasures. Sometimes, the pressure of shareholder value pushes CEOs to recommend initiatives that seek to gain short-term pleasures while destroying the underlying development agenda of the company (Ostrower, 2012). Objectives are short term aims and desires while goals cover the long-term ones.

References

Claycomb, C. & Hartley, R. (2014).Marketing Mistakes and Successes.New York: Wiley

Ostrower, J. (2012). Airbus Accuses Boeing of Price Wars. The Wall Street Journal, May 15, 2012. http://www.wsj.com/articles/SB10001424052702304371504577406830992897136