Airbus : from Challenger to Leader

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Group Presentation 1) Causes of the situation a) History - Late 1960’s: Britain, France and West Germany launched Airbus Project. Attempt of European governments to end American manufacturer’s monopoly of aerospace industry. - July 1967: Britain quit project due to differences with other partners. - 1970: Airbus Project reorganized and named Airbus Industrie: A French German company incorporated in France - 1971: Spain joined consortium with 4.2% stake thru state-owned CASA. - In 1979, British Aerospace Systems (BAE systems) entered the consortium with a 20% stake b) Background - The aerospace industry can be divided into three categories: defense contracts, space programs and commercial aircraft. This…show more content…
From the onset, its first product the A-300 (1974), a wide-body aircraft with twin engines and twin aisles which reduced flying costs for airliners. Airbus embrace new technology to do things in a lower production cost. 2. All planes have identical cockpit design which enables the airlines to use the same crew across all the planes. 3. Different aircraft design compared to Boeing with wider fuselage giving the airlines extra space to add more seats. 4. A-320 had a new technology which resulted in better operating efficiencies and performance. 5. Use Computer Aided-design (CAD) technology to design their planes which reduced the engineering hours spent on designing and bringing out better designs. 6. A380 have the latest technology where automated on takeoff, flying and landing. 7. Very high R&D cost, to come out with an innovative product which could reduce operating cost ii) Porter Five Forces (PFF) – assumes that industry attractiveness and firm’s competitive position in an industry are influenced by five competitive forces. These forces are determinants of that industry 's profitability. a) Threat of new entrants - Low threat of new entrants because high barriers to entry in terms of capital requirements: most capital-intensive industry in the world characterized by high labor and R&D

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