SIBM Bangalore | Duopoly | Airbus Vs Boeing | | Rohit Jhunjhunwala(12020841158) | ShubhikaLal (12020841169) | GauravKaranwal (12020841136) | NavneetSinha (12020841147) | AnuragAwasthi (12020841125) | | | |
This document is an essay on the Duopoly Market Structure existing in the Aircraft Manufacturing Sector. This is meant purely for information purposes. |
COMPETITION ANALYSIS 2 Market Share 3 Order and Deliveries 3 Stock Price 3 Competition by Product 3 PRICING STRATEGY 4 Airbus Strategy – Driven by the Ticket Price: 4 Boeing strategy - Passenger demand for fast nonstop flights will drive airplane selection: 4 Strategic objectives for Boeing / Airbus Pricing – 5 Price Elasticity - An…show more content… Bargaining power of buyers : High
The buyers for the airliners consist of various flight operators each of whom has varied requirements. A transition which has gone on to dominate the airline industry is the operation of budget airlines such as Ryanair, which focus on least cost operations and overall short-haul flights. This increased demand for narrow-body models which accounted for 75% of the total airliners demanded from 2000-2010. The airliners have been able to address these needs using the models such as Airbus A320 and Boeing 737. But the effect on margins of flight operators due to both volatile fuel prices and decreased passengers as a result of developments in high speed rail, has forced them to demand new airliners with lesser operating costs. With more options now being available to buyers in terms of manufacturers when compared to 80’s and 90’s, the bargaining power can be said to be increasing.
Effect of above factors on Competitive rivalry: HIGH
The current market is dominated by two players, Airbus and Boeing with minor competition coming from manufacturers such as Ilyushin, Tupolev and Bombardier. But the new technology and cost effective operation guaranteed by the new entrants may challenge the market shares held by the two companies. Especially with flight operators showing interest in low maintenance costs and fuel