Airbus A350 Ewb V/S Boeing Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Airbus A350 Ewb V/S Boeing Case Study Analysis

Question No. 6

The model has been built in excel file and its results are shown in Exhibit 1 of the document.

Question No. 7

Generally, the distinction is based on other size specifications, such as capacity, fuel consumption, operating costs, wing size, engine power and cruising speed, among others. The two companies responded to the competitors ’technological innovation, by keeping their prices lower, rather than following a “jump-in” phenomenon of investment.

There are only two companies that dominate the market; and both of these seek to control prices and production, to maximize their profits. As compared to a market that allows many competitors; these dominating companies offer a limited range of products to their consumers at pre-determined higher prices.

Airbus and Boeing are strong competitors, with decades of experience and innovation. The manufacture of commercial aircraft is a specialized industry, whose high development costs and benefits are based on experience, making it difficult for inexperienced companies to enter the industry. Barriers to enter the industry are mainly determined by the scarcity of raw materials and technology. The other two forces are buyers and suppliers.

Boeing and Airbus have long history of success and they can source raw materials and parts directly from the supplier market. Another obstacle is the lack of state aid,without which new innovations seem difficult due to high fixed costs. Only government-funded airlines and domestic aid can be successful in the aircraft market. Without an adequate state security guarantee; the new company has a very high risk of entering the aviation market.

Regarding the commercial aircraft market; the economists predicted that the duopoly market will continue from 2007 to 2016 or in between. The estimated Boeing and Airbus production sharesare 56% and 43%, respectively; and the remaining 1% is shared between Russian and Ukrainian companies. Despite these predictions; there are signs of possible to the current duopoly from various new entrants. Growth in the international competition is emerging from markets in China, Brazil and Russia, and also from Bombardier Aerospace, which is competing for a market share from Airbus and Boeing. According to economist experts; China has gained an adequate experience and competence to challenge the duopoly, and is also planning on building a wide body aircraft along with Russia. Both Post-Paris Air Show and the Dubai Air Show held in 2007, marked a growing global competition in the commercial aircraft market.

Regardless of their global attempts to enter the market; Boeing and Airbus would remain the two biggest players for the foreseeable future, because they enjoy: long experience, advanced technology, government support, loyal clients, network of suppliers and resources. But the increasing number of global companies will gain shares in the market and transform the market into an oligopoly market, eventually..............................

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