Unit 5 Individual Project

Business on a Wing and a Plan

Introduction For nearly the last 100 years, airplanes have captured the imagination of the world. As the technology has progressed and the airline industry grew, competition has grown as well. Two of the top companies in today’s airline market are Boeing and Airbus. While these two companies are in the same business, they have different development strategies. Comparing the strategies of the two companies will show how each came about their most recent new products. While Boeing and Airbus are part of the top airline manufacturers in the world, there are several other companies hoping to be a part of that elite group. With the intense competition and faltering market, it is important for manufacturers to spread out the risks inherent in the development of multi-million dollar machines.
Product Development Strategy Boeing’s approach to product development can be seen throughout the company’s history. It was the science of aviation that dictated what to build. In the case of the Sonic Cruiser, the engineers that develop the planes sought to create a faster and more efficient plane. Starting with a blank sheet, the engineers designed a plane using all the best principles of science, crafting a plane that could transport passengers at nearly the speed of sound. The intent of the Sonic Cruiser was to focus on the idea that the way travelers flew, it made more sense to build a smaller but faster plane. A smaller plane could land at many more airports than a larger plane, giving passengers more choices and less chance of a layover. Unfortunately, the Sonic Cruiser never made it into production. But much of the same technology was used for the 787 “Dreamliner.” Keeping efficiency paramount, Boeing developed the 787 as its new medium-bodied plane with ranges unmatched by others of it size. (Boeing.com) This is opposite of the competition’s new product, Airbus’ new A380, which is much larger than the current 747 by Boeing. Airbus developed the A380 with maximum passenger capacity in mind. The double-decker airplane can carry more than 800 passengers in some configurations. This provides efficiency on a different scale. Measuring in liters per passenger, the A380 consumes almost half the fuel of other large body aircraft. (Airbus.com)
Strategy Comparison Comparing the strategies of these two companies, it is easy to see the differences. Yet there are similarities as well. The main similarity is the focus on efficiency. In a post 9/11 world, fuel efficiency is a key characteristic for any mode of transportation. Both companies strive to achieve maximum efficiency for their products. It is how they provide that efficiency where the differences appear. Boeing is trying for technological efficiency, using advanced techniques and systems achieve their goal. Airbus, on the other hand, has developed an aircraft that has the capacity to carry more passengers with less fuel consumption.
Increased Competition The list of companies that produce large aircraft is very small. Other than Boeing and Airbus, there are only two or three others. Russia has an airline company, Llyushin, but they are not competitive on the international level. Embraer is a company based in Brazil that is a significant competitor in this arena. The company has planes being used in all parts of the world, including the United States. (History Timeline, 2007)
Reducing Risks For Airbus, the risk involved with a major product launch is immense. Designing and developing an aircraft takes considerable time and money. The ultimate goal is to sell these planes to the airlines in order to recover those costs. The airline industry does not have many customers, it is therefore imperative to work with the airlines to determine their needs.
Conclusion
In the fiercely competitive market of airline manufacturing, development strategy is vital. Monitoring the needs of the airlines and the passengers will help to ensure the continued success of the major companies in the industry. They will also need to be aware competition from other manufacturers to ensure they keep the technological advantage.

References
Airbus.com (2007) Retrieved November 10, 2007 from Airbus A380 Navigator Web Site: http://events.airbus.com/A380/Default1.aspx

Boeng.com (2007) Retrieved November 10, 2007 from Boeing about the 787 Web site: http://boeing.com/commercial/787family/background.html

History timeline (2007) Retrieved November 10, 2007 from Embraer Company History Web site: http://www.embraer.com/english/content/empresa/history.asp