Airbus: Success or Failure of the Global Strategy?

Topics: Airbus, Boeing, Airbus A350 Pages: 14 (4335 words) Published: July 13, 2010
Airbus: success or failure of the global strategy?


Problem Statement: Airbus: success or failure of the global strategy?2 Methodology:2
Company Introduction:2
Airbus Corporate Strategy:2
The essential items to deal with the global strategy (based on the PESTEL analysis)3
Environment (Physical):5
Conclusion of the PESTEL analysis:6
Porter’s five forces analysis:7
Rivalry among the industry:7
Threats of New Entrants:8
Bargaining Power of Buyers:8
Bargaining Power of Suppliers:8
Substitute Products:8
Conclusion of the Porter analysis:9
Summary of main strategic options and choices:10

Problem Statement: Airbus: success or failure of the global strategy?

Does Airbus’ strategy give it a competitive advantage in meeting the future demand for air travel? What affect will the loss of government subsidies have on this strategy? Does rival Boeing have the right strategy instead? Will the A380, which is on their strategy, be a successful investment for Airbus?


In this case study we decided to deal with the airbus strategy, that is why we had to analyze the global demand.
Starting from this point the use of the PESTEL and PORTER models were necessary to withdraw Airbus options and strategic choices to become the leader of the aircraft industry.
These tools are the key framework of this report.
Company Introduction:
Airbus, based in Toulouse, France, is currently the world’s leading commercial manufacturer with 54% of the market share, and has been in fierce competition with Boeing since its inception in 1970. Airbus is a subsidiary of the European Aeronautic Defense and Space Company (EADS). In 2001, Airbus formally became a single integrated company, EADS and BAE transferred all of their assets to the newly incorporated company and became shareholders, with 80% and 20% shares. A shareholder committee that consists in seven members and acts as a supervisory council, five members from EADS and two from BAE governs airbus; they approve the budget and make up a three-year investment plan. Airbus has been reorganized into “centers of excellence” with each center managing its own make or buy policy, deciding to subcontract whenever they can lower cost, which is seen as the only way to build profitability Airbus has four main subsidiaries: Airbus of North America, Airbus China, Airbus Japan, and Airbus Transport International. In 2004, Airbus achieved a turnover of some 20 billion euros and provided support for more than 3,300 Airbus aircraft currently in operation with more than 250 operators. Airbus’ mission statement is; our mission is to provide the aircraft best suited to the market’s needs and to support these aircraft with the highest quality of service. Their vision statement is based on their philosophy of listening and responding to customers’ needs Airbus Corporate Strategy:

Airbus believes in the future of aircraft is in jumbo size airliners, which they in their opinion will help relieve congestion of so many airplanes operating in and out of airports by economically ferrying more passengers between major hubs. The company is following an expansion strategy as it takes it proven expertise in civil aircraft industry and it put to use in the military sector with the A400M program

To secure profitability, Airbus started to outsource major elements of their newest project, the A380 with nearly a third of the project being outsourced, on a risk-sharing basis. The company uses only mature and long tested technology and chooses long-term suppliers to guarantee quality. An important part of Airbus’ strategy is the use of synergies between all its airplanes, which offers operators a much shorter training time for pilots and engineers,...
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