Case Study of Airbus

Topics: Airbus, Porter generic strategies, Boeing Pages: 6 (2237 words) Published: March 13, 2011
Strategic Management Airbus Case Study Executive Summary Airbus is one of the world's leading manufacturers of commercial jetliners and military airlifters and is world's first twin engine wide body jet since 1974. The key success factors of Airbus have been helpful in achieving the objectives and improve the overall performance of the company, financially and physically. The company strategy is based on differentiation strategy of Porters generic strategy while providing airplanes with innovative design and technology. However the key resources and capabilities have also been supporting the strategic decisions of Airbus in its design, technological innovations which would not have been possible, if not with the help of 52, 000 employees working with Airbus and its high end technology and support of customers and suppliers. The strategy is best suited to Airbus for the future directions as per Suitability, Feasibility and Acceptability (SFA). Introduction Strategy is the direction and scope of an organization over the long term which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations. An organization's strategy is concerned with matching the external environment to the organizations internal environment in order to add value to its products and services and enable it to beat the competition (Partridge and Sinclair- Hunt, 2005:4). It is further stated that strategic management's increasing importance is the result of several trends like increasing competition, modern and cheaper transportation, communication and technological development Airbus is one of the world's leading manufacturers of commercial jetliners and military airlifters and is world's first twin engine wide body jet since 1974 ( The organization has grown since its establishment on the basis on mission, vision and passion of its employees. The present papers present the strategy of Airbus identifying its critical success factors, resources and capabilities and assess the future competition for the organizations. Critical Success Factors - Five year analysis of Airbus According to McCabe (n.d.), the key success factors have several direct and possible uses for any business unit for profit or non profit and initially appear as tools for making analysis in examining the character of the industry. Much often key success factors act as the element of competitive strength assessment as compared to its competitors in the industry. As mentioned by Ferriri (2003:113), it is assumed that design; economies of scale, cost cutting strategies, acquisitions and operations, demographics, networks, passengers and timing are the critical success factors in the airline industry.

Regarding Airbus, which was created in 1970 by Groupement d'Interet Economique (GIE) was the first wide-bodied twin engine aircraft has been leading the manufacturing sector with its innovative design and technology which offers fuel saving and maintenance advantages over its competitors. Till the end of August, 2009; Airbus has designed 13 models of aircraft and sold 9,340 units with the strong customer base around the world which makes it passenger friendly using high technology (Leahy, 2009). A critical analysis of the annual review of last five years for Airbus, under EADS group; reveals that the company has been able to significantly achieve growth in revenue year over year from £22,179 million in 2005 to £27,453 million in 2008 (Annual Review, 2005 – 2009). Further in regard to the net order share for the last ten years, Airbus has let behind Boeing in the race with 64% market share while Boeing is left with only 36% as of in the year 2009 whereas Boeing occupied 54% market share as compared to 46% by Airbus in 2000 (Ferreri, 2003). This shows that Airbus has strategically moved ahead in terms of its design, technological innovations in the product...
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