w
 

‘ Ongoing Battle between Airbus & Boeing

‘ European government supported Airbus while Boeing was
backed by US
‘ A380 is a direct competitor to Boeingǯs profitable 747 model
line
‘ Boeing spent a reported $5 billion developing and tooling
up to produce the 777 wide-bodied jetliner that it
introduced in 1994
‘ Enormous development cost.
‘ Different perception of customers for different models
‘ Volatile demand along with volatile market
‘ Both the Aircrafts had their pros & cons




Strengths: eakness:
- Backed by the country of Origin -High development cost
(Subsidies) - Delay in Delivery
- ide range of models

Opportunities:
- Change in Technology
- Considerable rise in Global demand
(People prefer airways to other modes as
it saves time)
Threats:
-Volatile Market
- Susceptible Market (Credit Crunch,
Airline Disasters, Terrorism, etc)
- Increase in Oil prices
- Competitive Market



Strengths: eakness:
- Diverse Portfolio - Dependent on subsidies
- Engineering Driven company & not
Financially Driven

Opportunities:
- Change in Technology
- Considerable rise in Global demand
(People prefer airways to other modes as
it saves time)
Threats:
-Volatile Market
- Susceptible Market (Credit Crunch,
Airline Disasters, Terrorism, etc)
- Increase in Oil prices
- Competitive Market






 
Only few competitors can exist in this market:
- High Development costs involved in manufacturing
aircrafts
- Levels of breakeven that amount to a considerable
proportion of global demand
- Considerable familiarity of level curve necessary for
corporations to reach point of breakeven levels and
turnovers
- Unstable demands due to factors like fuel pricing,
inflation, etc.
 


‘ %hreat of New Entrance: Low - £eed to invest large
financial resources.
‘ Substitutes: Low - Price-performance substitution in is
not attractive.
‘ Bargaining Power of Suppliers: Low to Moderate Ȃ
[ragmented suppliers group
‘ Bargaining Power of Customers: High - ÿelatively few
buyers of large commercial aircraft.
Price sensitive
‘ Competitive Rivalry: High - Intense competition in the
large passenger jet aircraft market.











 
‘ orldǯs largest passenger plane
‘ A symbol of economic strength and technical
innovation
‘ Demand for large planes offering cheaper seats
between the world's major cities
‘ The A380 is 35% larger than the 747
‘ Combination of increased capacity and reduced
operating costs provides superior economics.
‘ Prospective customers were more than expected
 

 



‘ Adhere to Time Limit for Delivery of Aircrafts
‘ Adaptation of new technology
‘ ÿe-establish relationships with their suppliers
‘ Downsize their operations
‘ [easible way costs could be cut
‘ ell trained employees
‘ Competitive prices