Ethics and Airbus Essay

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.

Many companies have ethical decisions that need to be and sometimes those decisions can affect many individuals or just a few. Making ethical decisions may be placed solely on one person’s shoulders or it may be a decision that multiple individuals must be involved in. There are several ethical issues in the Richardson Drilling case that should be considered. For instance, bribery, purchasing substandard parts with lack of disclosure that causes injuries, and revealing sensitive information. One potential ethical concern that could arise has to do with ongoing health insurance and the employer’s responsibility.

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

Airbus had a reputation for innovative design and technology. All Airbus planes employed “fly-by-wire” technology that substituted computerized control for mechanical linkages between the pilot and the aircraft’s control surfaces. This technology combined with a common cockpit design permitted “cross crew qualification” (CCQ) whereby pilots were certified to fly similar aircrafts, thus offering flexible scheduling in flight crews on various models, leading to better pilot utilization and lower training costs. These features helped explain why Airbus had received over half of the total large aircraft orders for the first time in 1999. However, despite the gains in market share, Airbus still did not have a product to compete with the monopoly of Boeing’s 747 in the VLA market.

• High capital requirements to establish +huge set up+ large investments + economies of scale/scope: Boeing having advantage over Airbus in large commercial aircraft sector.

The primary inputs to the airline industry include airplanes, labor and fuel. There are only two major manufacturers (three at the time of the case – Boeing, Airbus and McDonnell Douglas) for large commercial aircraft. This, along with the relationship specific

a. Identify the ethical dilemma faced by the CIO in this situation using the three normative theories of business ethics. Identify all stakeholders involved. How will each stakeholder group be affected by the decision taken by the management?

Nevertheless, as Boeing gears up for its all-new 7E7 airliner, arch rival Airbus may already be putting 7E7 orders at risk by talking to airlines about a similar plane. Airbus is viewed a having advanced technologies coupled with a conglomerate backing and Boeing has not come up with any new innovative ideas in the last ten

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 COMPANY: STRATEGIC AUDIT I. CURRENT SITUATION A. Current Performance Boeing performance has been outstanding for the past few years. Their Return on investment rose from three percent to 6 percent from 1998 to 1999, but it did drop to five percent in 2000. In 1996 Airbus claimed 42% of the market share, while Boeing had 64%. Boeing is looking at falling below the 50% mark. Boeing's profits have been doing quite well. They have risen drastically in the past few years, which can be seen in the profitability ratios. Boeing is doing fine when it comes to profitability, even though they have dropped slightly since 1999.

Boeing found itself in the crucial situation of having lost market share to Airbus. Boeing had to act

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

Developing the World's Largest Commercial Jet In this case, we will be analyzing strategic interaction between Airbus and Boeing, the two leading producers in the global commercial aircraft industry. In particular, we will be considering Airbus' proposed launch of the A3XX, their entry into the intercontinental jumbo jet segment, and Boeing's potential competitive responses to this entry. We will attempt to answer the questions: Should Airbus enter the jumbo jet segment? If so, how?

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).