Professional Documents
Culture Documents
GROUP I PGP-1
PROBLEM STATEMENT:Should Airbus and Boeing come together to lay the foundation of what could become the future of commercial aviation the VLCT ?
OPPORTUNITIES
New aircraft to gain market share
THREATS
Stiff competition in the industry Regulations on subsidies provided to Airbus
Worlds largest exporter Largest commercial aircraft manufacturer 62% revenues are generated from customers outside U.S The prices were non-negotiable on 747 Jumbo Jet. Dominated in every segment of commercial aircraft. Large customer base is viewed as a marketing and sales asset Good supplier network across the globe
Heavily dependent on suppliers and any changes could adversely affect the production of the plane Dependency on U.S government and subsidies
OPPORTUNITIES
A panel representing both the U.S and Europe will help in increasing transparency in the industry Regulations on subsidies provided to Airbus New aircraft to gain market share
THREATS
Sourcing and qualifying a new supplier could take a year or more Subsidies given to airbus by the European government Intense competition from Airbus Increasing fuel prices
Bargaining power of buyers(Moderate) The bargaining power of buyers is high for Airbus and low for Boeing as product diversification is high for boeing For example, prices were non-negotiable for Boeing 747 Threat of substitutes(High) There is intense rivalry between Airbus and Boeing and due to which the threat of substitues is very high .
Due to complex technology and lot of government regulations, threat of new entrants is low
It is low for Boeing due to its product diversity and bargaining power is high for Airbus
RECOMMENDATIONS
We do not recommend Airbus and Boeing to carry on with the joint venture because :
Airbus is having relatively less market share compared to Boeing and very recently got profit. So, even though a joint venture with Boeing makes business sense, it will not help Airbus to create an identity for itself. To further the point, there is a bone of contention between Airbus and Boeing regarding the difference in government regulations and with the joint venture, it would only become more complicated.
With the cultures differences between both the countries , it is better to work independently so that they can inspire each other and work as collaborators.
THANK YOU !