Airbus vs. Boeing

Airbus and Boeing both compete in the highly competitive industry of manufacturing commercial aircraft. Over the years they have each controlled the market at differing times due to competitive advantages – an ability to create value through a company’s strategies and operations that its competitors cannot (ref – Strategic Management textbook , pg 22)

Boeing, formed in 1916 by William Boeing and George Westervelt, dominated the industry until the 1970’s, when Airbus was organized through a collaboration between Britain, France and West Germany. Airbus began manufacturing the A-300 series which enabled them to capture 10% of the market share by 1975 (ref article), no small feat considering they were competing against the giant Boeing. Airbus’s ability to compete with Boeing and gain market share will be analyzed using the following business models: PESTEL Analysis, SWOT Analysis, Porter’s Five Forces, VRINE Analysis and Porter’s Model of Competitive Advantage.

PESTEL ANALYSIS
Political – Airbus was a product of a merger between three European countries; Britain, France and West Germany. In the 1970’s the political climates of all three were relatively stable. The three countries worked together in order to compete with the US. They did have to adhere to international trading policies and agreements (NAFTA, GATT).
Economic – As they were competing largely in the US market, Airbus needed to constantly keep an eye on interest rates; their aircraft were manufactured in Europe but sold primarily to US airline companies. They had to focus on macroeconomics (international) as well as microeconomics (national issues). Also, any economic downturns could sharply affect demand.
Sociocultural Factors – There were a great deal of social and cultural issues at work within Airbus’ structure;