...demand for new aircraft or commercial airplanes that are more fuel-efficient. In addition, the rising fuel prices have taken a big effect on the economy. As fuel prices affect consumer goods and spending, leisure travel is expected to decrease, thus affecting the airline industry's bottom line. Furthermore, since the economy has gradually moved into a recession from the effects of rising fuel prices, many airlines that are struggling to stay out of bankruptcy, are looking for more ways to become cost effective. Thus, further fueling the demand for new commercial aircrafts to become more fuelefficient (2007 Annual Report). In order to save on costs so that Boeing can provide lower prices to its customers, Boeing and its competitor, Airbus, have both turned to outsourcing. Outsourcing has allowed Boeing to become more competitive. Furthermore, the option of outsourcing also allows Boeing to share risks and focus on their relationship with marketing and suppliers. However there is a down side when Boeing decided to outsource. Engineers feel that outsourcing is not a great idea for the company (Hit, Ireland and Hoskisson: 52). One of the reasons why engineers are against outsourcing is because they feel that their job is at stake...
Words: 9300 - Pages: 38
...current demand for new aircraft or commercial airplanes that are more fuel-efficient. In addition, the rising fuel prices have taken a big effect on the economy. As fuel prices affect consumer goods and spending, leisure travel is expected to decrease, thus affecting the airline industry's bottom line. Furthermore, since the economy has gradually moved into a recession from the effects of rising fuel prices, many airlines that are struggling to stay out of bankruptcy, are looking for more ways to become cost effective. Thus, further fueling the demand for new commercial aircrafts to become more fuelefficient (2007 Annual Report). In order to save on costs so that Boeing can provide lower prices to its customers, Boeing and its competitor, Airbus, have both turned to outsourcing. Outsourcing has allowed Boeing to become more competitive. Furthermore, the option of outsourcing also allows Boeing to share risks and focus on their relationship with marketing and suppliers. However there is a down side when Boeing decided to outsource. Engineers feel that outsourcing is not a great idea for the company (Hit, Ireland and Hoskisson: 52). One of the reasons why engineers are against outsourcing is because they feel that their job is at stake and the company has lost...
Words: 9300 - Pages: 38
...The 21st Century Jet The Boeing 777 Multimedia Case Study Shad H Shokralla Submitted in partial fulfillment of the requirements for the degree of Master of Science in Mechanical Engineering from the University of California at Berkeley December 18, 1995 Research Advisor: Professor Alice M. Agogino Berkeley Expert Systems Technology Laboratory On-line Version URL: main.html Abstract Multimedia case studies have been shown to be an effective way of documenting and teaching best design practices. This is a case study of the changes that the Boeing Commercial Aircraft Company made in the way they design and build airplanes. The 777 is the first jet that Boeing has created using this methodology. The changes were very dramatic and encompassed many areas, including technical, organizational and administrative changes. Boeing is touting the 777 as more than just a product, but as a new process. Although the technical innovations were numerous, what made the 777 project unique were the other changes Boeing instituted for this design/build effort. It was the first 100% digitally designed and pre-assembled airplane made by Boeing. Concurrent engineering, the concept of “Working Together”, was an integral part of the new philosophy and nearly 240 Design/Build teams were used through-out the process. The teams included design, manufacturing, customer and supplier personnel from the start. Designing and building a new...
Words: 7527 - Pages: 31
...Review of the Boeing VS Airbus Case Study Introduction In the market for large aircraft demand the emerging niche for very large aircraft (VLCT aircraft seating more than 400 passengers) saw only two competitors: Boeing and Airbus. Even though both competitors’ moves were clearly marked by technology enhancements, and different target markets but both exhibited strategic interdependence. Option with Boeing: Boeing being the market leader for almost a decade as a manufacturer of large commercial aircraft and had also reached economies of scale, the need to sustain its market share it presumed that “customers might demand for new”. Any potential growth was only through taking super leap and making VLCT jumbo aircraft which needed huge investment beyond Boeing’s financial reach (that too for an uncertain future market) Boeing had the technology advantage over airbus because Boeing had already tested and launched Boeing 747 (a large passenger carrier). Only stretch of design was needed to build up “jumbo dream line VLCT aircraft”. But being a private firm and not state run the kind of investment required to develop new carrier and also the uncertainty of the future market were problems. It had the option to continue to manufacture famous “Boeing 747” and not go for VLCT Jumbo. But the VLCT superjumbo was a strategic commitment of more than average interest because of its sheer size, irreversibility and potential impact on industry structure if nothing goes bad. VLCT...
Words: 1399 - Pages: 6
...Executive Summary Airbus and Boeing have constituted a duopoly in the large jet airliner market since the 1990s, leading to fierce competition. Boeing is an American company while Airbus began as a consortium of European aviation. The two are presently facing issue that tarnish their political, legal, and ethical reputations. Airbus argues that Boeing has received over $16 billion from the US government in addition to help from countries like Japan. The U.S. fires back arguing that since 1992, Airbus has been receiving EU government loans. Boeing’s scandal with Lockheed and the discovery of wing cracks in the Airbus A380s have damaged both companies’ ethical reputations. The following recommendations will ensure that, while Boeing and Airbus compete in the commercial airline industry, their actions will be ethical and legal, while adapting within the current cultural and political bounds of the global market. Introduction Boeing: the world’s largest aerospace company Since its foundation in 1916 in the Puget Sound region of Washington State, Boeing has become the largest aerospace company and a leading producer of military and commercial aircraft. Boeing’s military aircraft come equipped with satellite, missiles, launch vehicles and advanced information, and communication systems. The number one U.S. exporter have about 160,000 employees across the United States and in 70 countries, making it one of the most diverse and talented companies that thrive through their innovative...
Words: 4499 - Pages: 18
...REV: SEPTEMBER 18, 2007 ERICH ALEXANDER VOIGT JORDAN MITCHELL Airbus vs. Boeing (A) Should Airbus go ahead and develop its own version of a super jumbo (the A3XX)? Should Boeing develop a larger version of the 747? What would Boeing and Airbus gain by teaming up? What could they lose? The answers to these questions would determine the future of both companies for many years to come. The Commercial Airline Industry Do The global aviation industry was sized at approximately $100 billion as of 1992. The single largest segment was the manufacture and sale of large commercial aircraft, which totaled $38.5 billion in 1991.1 The sale of large commercial aircraft was expected to grow to $40 billion by the end of 1992. The worldwide commercial aircraft fleet was made up of nearly 8,000 passenger and 1,200 cargo planes spread out over 450 airlines and operators. Large commercial aircraft were defined as airplanes with 100 or more seats. Large aircraft made up 90% of the fleet, while smaller airplanes accounted for the remaining 10%.2 The VLCT was defined as a plane over 400 seats or with the ____________________________________________________________ ____________________________________________________ Professor Ramon Casadesus-Masanell, Erich Alexander Voigt (Tiggeman Associates), and Research Associate Jordan Mitchell prepared this case. This case was developed from published sources. HBS cases are developed solely as the basis for class discussion. Cases are...
Words: 9792 - Pages: 40
...Executive Summary Airbus was formed in the 1960s by a consortium of European companies from Germany, France, UK and later Spain, in response to the American manufacturers’ dominance of the aerospace industry. Airbus has progressed over the years from a ‘Question Mark’ to that of a ‘Star’ (Boston Consultant Group’s Growth-Share matrix). By adopting strategies based on the Ansoff grid, Airbus has broken through Boeing’s market domination, growing 5-10% p.a. and achieving 25% market share in 1980. As of 2010 Airbus’ market share was 52% based on net orders, in a duopolistic competition with its other major rival, Boeing. Airbus has adopted a differentiation strategy in its competition with Boeing. Airbus designs like ‘sharklet’ wingtip design helps saves 3.5% fuel burn, whilst “GLARE” materials weigh 10% less than aluminum (savings of 794kg weight on the A380). Lower airplane maintenance costs by 6%, improved manufacturing processes (eg 62% defect reduction in Broughton facility) and engine sourcing from UK firms (Rolls Royce/Pratt Whitney engines, whilst Boeing prefer GE engines) are amongst other differentiating strategies adopted. Its flagship, the A380 was designed in line with the traditional hub-and-spoke model (as opposed to Boeing’s tendency towards the point-to-point model). Outsourcing to China has helped Airbus secure 45% delivery share there by 2011. However, Airbus needs to be mindful of supply chain risks from its vast supplier network- the A380 was delayed by 2...
Words: 435 - Pages: 2
...Airbus Vs Boeing Nov 2014 1 I. Airbus Airbus has been created because the French, German and British governments wanted to launch a European aeronautics program to compete with American companies such as Boeing, McDonnell Douglas or Lockheed. In 1970, l’Aérospatiale and Deutsche Airbus make a consortium. In 1971, the Spanish C.A.S.A join them, followed in 1979 by British Aerospace. At that moment, the German and the French used to get 38% of the total benefice, 20% was for the British and 4% for the Spansih The first flight of an Airbus plane was on May 12th.1979 with Air France. The plane made a return trip Toulouse-Paris. The most famous plane was A320. There were 10,994 orders for this plane and only 6,285 of them are delivered for the moment. The last plane Airbus launched is the A350 XWB. There are already 750 orders from 39 customers worldwide Airbus usually sales its planes to normal flight companies like Air Austral, Air France, Amedeo, Asiana, Emirates; but also Jetliners and private owner (Arabic prince …) and the industry. II. Boeing The first plane of Boeing was a Seaplane, the Boeing Model I, on June 15th, 1916. The New-Zeland Flying School was the first company to pilot the plane with two crews at a maximum speed of 121 km/h. 2 The most famous plane of Boeing is the B-737. The first flight was in 1968 with Lufthansa Company. Nowadays, 8237 plane were sell and this plane is used by Southwest Airlines, Ryanair...
Words: 888 - Pages: 4
...Boeing and its Management Planning Christopher Bayles MGT/330 October 2, 2011 Bill Escue Boeing is one of the biggest aviation companies in the world with relations to a number of different countries. They produce products for commercial and government use as well as have contracts with National Aeronautics and Space Administration (NASA). Management planning is one of the primary key focuses to Boeing because of the size of its massive corporation. They create some of the top high-end equipment for medical, commercial, and government use. The primary workings of the company includes goods that aid in the carrying of cargo, people, and other equipment used by the government. The Federal Aviation Administration (FAA) oversees the operation of aircrafts for safety concerns. Because of the safety concerns, Boeing conducts very extensive planning to operate a well-organized and successful business. Planning includes precautionary needs for the future, figuring out the departments’ objectives, activities that could be of some concern to a company, and a company's techniques they will need to accomplish a successful result (Boeing, 2010). During plans making Boeing has to consider the unpredicted problems so that there can be no possible mishaps that could happen. By setting obtainable goals in marketing, sales, mechanical markets and engineering, and updating and training employees to be more effective will ensure that the products exceed high expectations and...
Words: 1060 - Pages: 5
...Business Case Analysis Wael M. Zaoud MGT 521 May 28, 2012 Clance Doelling MBA, BSME Business Case Analysis Executive Summary The third week assignment examines The Boeing Company (BA) strategic initiatives taken in relative to the organization and operation adaptation to the developing competitive environment. Boeing operates as a global company and facing tough competition recently from Airbus, Lockheed Martin, EADS, Northrop Grumman, etc. Politics, finance, economy, and resources (to name a few) impact the global market in which Boeing operates. As a result, Boeing needs to constantly evaluate its global strategy and the tactics it uses to capture the market and maintain growth. Economic Trends Recent global events, including regional political turmoil, natural disasters, and debt crises, have affected global economic growth. While global growth is expected to recover, the risk of persistent high oil prices and debt contagion could have lasting effects on the economy (The Boeing Company, n.d.). Economic growth also could be affected by slowing trade liberalization in some regions. Reduced liberalization could prolong the recovery period, affecting the demand for air travel and new airplanes. Though recent data indicates that the global economy continues to recover, the pace of the recovery in 2011 has moderated compared to 2010. High oil prices, natural disasters (Japan earthquake) and resulting consequences in a politically unrest Middle East area pose as primary...
Words: 3981 - Pages: 16
...The Airbus Everything about this airplane is enormous, the numbers of truly main Baugleen, its overalling is 73 meters, that´s about the slowest of the greats things in a jet, the jaim to the fuselage were tipically have 5 hundred and 60 feet to have the potential to carry up to 8 hundred passengers, the tail at 21 meters of the ground is as high as a seven story building, the 8 hundred and 45 square meter of and wind area is big enough to park 70 cars. The 8380 can fly staggering 15000 kilometers without gree fueling and in order to do that, it needs to carry 3 hundred and 10000 liters of fuel, making the plains take of weith of 5 hundred and sixty tons. Incredibly thought, the 8380 will actually be more fuel efficient than others similizise jumbo jets, air bus claim that the plane will buy 3 liters of fuel per passenger for one hundred kilometers, making it as economical to run as a family car. The building of the 8380 is a remarkable example of a transnational cooperation, the finally assembled is in Tolous in France, but this is only the end of an impressible complicated process, the construction of each aircraft is the result of collaboration between France, Germany, Britain and Spain. The wings for example are built in England as wells, the main section of the fuselage are constructed in Humburg- Germany; Parts of the nose and tail are in fact made in Spain and only assembled in Germany. Everything is then shiped to France to be put together. The 8380...
Words: 344 - Pages: 2
...Finding the Right Location: Four Dimensions of Successful Foreign Direct Investment. Airbus Assembly Line – Mobile, Alabama Overview With the announcement earlier this year by Airbus that it plans to invest $600 million to build jetliners in Mobile, Alabama, the Southeast U.S is well positioned to attract foreign direct investment and U.S suppliers to the region. Central to the supply chain discussion are location strategies that optimize the value chain, drive innovation through the involvement of education and academia in proximity/joint working relationships and provide flexibility for adapting to business change. Location decisions such as these are special events that require careful attention to many conflicting strategic, operational, financial and intangible factors that can set the stage for either great success or fantastic failures. these issues will be one of the biggest challenges facing the industry in the coming years. This whitepaper explores the key drivers impacting the aerospace industry, the process for developing a comprehensive location strategy in response to industry expansion, and these critical locations factors that lead to location strategy success in the Southeast U.S.: Global commercial aircraft orders have increased six percent in 2011, with accelerating demand for new, more fuel efficient and technologically advanced aircraft. According to a number of studies, the industry will have to increase production by 45 percent to meet demand in...
Words: 9803 - Pages: 40
...Ethics At Airbus 1) In each of the cases described above who benefits and who suffers from the alleged ethical and legal lapses of Airbus? Ans – When we observe across cases, its mostly the state and the airline company who is at loss due to these legal and ethical lapses Airbus – Sabena Case: As long as Van Espen’s case does not prove anything against any party, Airbus has gained significantly from the deal as it would have earned around $5bn order from the deal. The party which suffered significant loss should be the state as the Belgian government had 50.5% stake KAC – Airbus: Airbus gained a much needed order bill of around $1.1bn and possible order of $0.9bn, the employees of KAC Mr Al Mishari and its subsidiary ALAFCO, Dr. Mallalah & Mr El Fekih possibly would have earned (only a possibility) whereas the state of Kuwait higher costs, lost cash, earned higher depreciation costs and probably had to write-off it off India Inc. & Airbus: Airbus like all other cases earned the order book despite Boeing offered a deal to the Indian government $140mn cheaper. The state and eventually the airline paid $140mn more, raising its depreciation costs, debt service costs and got hold of carriers which were not properly tested thus risking the life of passengers Across cases observed, Airbus has been smart enough to save itself a persecution almost anywhere and has got large order books worth billions of dollars acquiring half of the market share but if Airbus is found...
Words: 981 - Pages: 4
...Boeing Manages to Plan March 22, 2011 Boeing is the world’s leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined. Boeing has more than 158,000 employees in over 70 countries, including the United States (Boeing.com). This company is known for its innovation and seems to constantly make plans to stay ahead of the competition. A portion of their mission statement includes “we will strive for continuous quality improvement in all that we do, so that we will rank among the world’s premier industrial firms in customer, employee, and community satisfaction” (Boeing.com). It is clear that this company relies heavily on its management staff and planning teams. It is common knowledge that Boeing consists of two business systems which are Boeing Commercial Airplanes and Boeing Defense, Space, and Security. The corporate functions that guide Boeing are Business Development and Strategy, Communications, Engineering, Operations and Technology, Finance, Human Resources and Administration, and the Office of Internal Governance. Each department has its own set of goals and objectives to evaluate and implement with the company’s overall mission in mind. The Business Development and Strategy team is an extension of the management, marketing, and research teams, they provide information and advice on the business goals. Shepard Hill is the head of Boeing’s large Business Development and Strategy team. His role includes “analyzing...
Words: 1148 - Pages: 5
...Relationship Management system (CRM) This helps firms manage teir relationship with their customers Executive Support System (ESS) Used by senior managers to address strategic issues and longterm planning. Human Resource function business process Failure in this business was evident in the failure to hire or predict enough airline's staffing needs to keep up with the company's rapid growth. JetBlue Business Model JetBlue's business model was to offer luxurious flying with the quality costumer service at a low price. This would be achieved by cutting "unecessary" expenses, and through the use of information technology and information system. The airline Automated all its services, emplyed lean non-union workforce, operated airbus A320 and used almost exclusively microsoft software for information system. This gave them advantage over their competitors as they were able to offer better rates. This grew more rapidly than envisioned. Problem Experienced Febuary 14, 2007 New York city are experienced an ice storm affecting flights ouut of New York. Most ailines cancelled flights but JetBlue dis not hoping to life up to its reputation of excellent service. They thought it would be better to delay than to cancel flights. This led to crew and passengers being stranded in the planes withour basic nesesecities such as water, food and proper toilets. This led to JetBLue finally cancelling flights. Many costumers started rebooking, cabcelling, and tracking their baggages...
Words: 284 - Pages: 2
