Boeing Versus Boeing : Clash Of Industry Giants

With only a few large companies across the globe (Boeing, MD, and Airbus), the commercial aircraft industry essentially exhibits the qualities of an oligopolistic competition with intense rivalry. Here is an analysis of competition in the commercial aircraft business using Porter’s Five Forces.

As the two largest producers in the commercial aircraft industry, Boeing and Airbus have been in a long rivalry for over two decades. Because of its huge research and development cost and a volatile market demand situation, the large commercial aircraft industry has only a few viable producers that can successfully operate in this industry. At the end of 1996, there were three competitors in the industry – Airbus, Boeing, and McDonnell Douglas (MDC). When Boeing announced in December 1996 the merger between Boeing and McDonnell Douglas, the dispute has again started between Boeing and Airbus. The merger was expected to go under

Boeing pursues Product Differentiation strategy in order to create competitive advantage over Airbus. Boeing differentiates its products by increasing number of seating capacity, engine capacity, innovating new winglet designs and by manufacturing wide range of products in respect to the change in market

Given the competitive dynamics in the commercial aircraft industry, it is not likely that Airbus could have become a viable competitor without subsidies. These dynamics include investment costs in the billions for research and development of a new airliner, long break-even times, significant experience curve on the manufacturing side, and the highly volatile demand for aircraft. Due to a lack of market share, if Airbus entered the market without this support they would have suffered many years of losses resulting in a possible bankruptcy. However, Airbus credits its success to a good product and a good strategy instead of

The brothers Wilbur and Orville Wright, possibly the two most renowned representatives of American aeronautics, were the first to experience controlled, continuous flight of a powered airplane in history. Despite being autodidactic in the area of engineering, the duo proved to be extraordinarily successful, testing and refining their strategies to overcome successive challenges that arose with the building of a plane (Crouch 226). The two were so far ahead in the race for flight that they even anticipated and found solutions to problems that more learned scientists could not have even begun to predict. Successful, man-controlled, powered flight was a fundamental turning point in history; it transformed the methods of how the United States

Strategy #1 The aircraft market is extremely competitive, even though there are less than five major players globally. Between Boeing and Airbus, most of the market share for the next generation aircraft has already been solidified. For Bombardier to effectively gain orders it must make the aircraft are more appealing to purchasers in two major ways: cost and performance. In the final cost of an aircraft, a great deal of money is spent on research and development. Boeing has millions invested in new aircraft and wing design, and piggy-backs off its other divisions and aircraft offerings. Airbus receives a great deal of benefit from its govermnet contracts

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.

After a few number of mergers & acquisitions to become the world’s largest, most diversified aerospace company, Boeing enterprise now include: North American Aviation, McDonnell Douglas, Rockwell International, Hughes Space & Communications, and Jeppesen.

Dominating the commercial aircraft market for decades, Boeing is considered to be the most highly competitive U.S aerospace industry. “U.S. firms manufacture a wide variety of products for civil and defense purposes and, in 2010, the value of aerospace industry shipments was estimated at $171 billion, of which civil aircraft and aircraft parts accounted for over half of all U.S. aerospace shipments. The U.S. aerospace industry exported nearly $78 billion in products in 2010, of which $67 billion (or 86% of total exports) were civil aircraft, engines, equipment, and parts” (Harrison, 2011). However, its position of influence has lessened in recent years. This is due to its main competitor, Airbus, who in recent years has made significant

The following analysis discusses the suppliers, buyers, industry competition, threats to entry, and substitutes that exist within the large commercial aircraft industry. Additionally, the analysis identifies the pressure that each of these groups applies on the industry and estimates the impact this pressure has on potential industry profits. Each group is identified using a high, medium, or low-pressure classification. A high-pressure classification indicates the group reduces industry profit potential and vice versa.

The Boeing corporation had been a very successful company in the mid-1990s. At the time, it dominanted the market in commercial aviation with an additional thriving sideline in the military and space contracts market. Boeing faced and then overcame a huge number of challenges but also took advantage of many opportunities that were offered up by the aerospace market in the late 1990s. The company faced a number of challenges. In wake of he the first Gulf War, the incumbent economic slowdown severely decreased the market demand. Also, the Boeing encountered stiff competition from the company Airbus which many experts have attributed to heavy subsidies by European government that gave the company an unfair advantage market advantage. For instance, in 1999, Airbus outsold Boeing for the first time in the company's history and delivered to the market more airplanes than the Boeing company did in

The main objective of Boeing's strategy is to analyze the commercial aircraft industry, to understand the demand that is present, and to formulate a solution that will fulfill that segment. Currently, there are only two major players in the global market: Boeing and Airbus. Boeing is widely known as the "free market" champion, while Airbus represents the "not-so-free" approach of the European Union's organized and government subsidized

Air travel has drastically changed the way of life for many individuals that depend on air travel to take care of business. One of the top leaders in the air travel industry, The Boeing Company realizes in order to stay competitive in their chosen industry, an effective strategic plan should be implemented. There are several approaches that can be utilized, such as focusing on the external and internal objectives that could beneficial. Boeing strives to be the best aerospace-based manufacture in the world.

Weaknesses that Airbus has, is that due to their structure, and having a multi country consortium, they were slow to make decisions. In the 1980’s Airbus experienced difficulties in financing the A-320 project, since all the Airbus partner governments had not approved the program (Carpenter, M. A., & Sanders pg. 613). Airbus was slow in its decision making process because the partners of the consortium tried to safeguard its own interests rather than make decisions that would benefit them as a whole (Carpenter, M. A., & Sanders pg. 613).

As the largest aerospace company in the world, the Boeing Company employees more than 153,000 people in some 67 countries. The great dominance of Boeing is due to its 1997 merger with McDonnell Douglas Corporation, an aerospace manufacturer, and its 1996 purchase of the defense and space units of Rockwell International Corporation, an aerospace contractor. The corporation is the world’s number one maker of commercial jetliners and military aircraft with more than 9,000 commercial planes in service worldwide, including the 717 through 777 families of jets