How the Macroeconomic Environment of the Airline Industry Affects the Strategic Decision of Boing vs Airbus

Christian Uwagwuna

How the Macroeconomic Environment of the Airline Industry Affects the Strategic Decision of Boing Vs Airbus
A Case Study

Document Nr. V170506 http://www.grin.com/ ISBN 978-3-640-89394-2

9 783640 893942

‘Case Study – How the Macroeconomic Environment of the Airlines Industry Affects the Strategic Decision of Boeing Vs Airbus’ By

Christian Uwagwuna

Course: Strategic Management

27 January 2011

Executive Summary
This paper discusses the external economic factors affecting the strategic decision of airline industry and how this decision in turn, affect the market forecast of the aircraft manufacturing industry. Various business issues affect airlines operation either directly and indirectly, and these issues affect the strategic decision of the airline industry. The present economic crisis, instability in aviation fuel price, and environmental factors (such as the recent volcanic ashes and snow) has further shrunk business in the airline industry and thereby increasing competitive rivalry. Although the future projected growth by the airline industry look promising, factors affecting airline businesses can make it daunting. Strategic decisions however, will help the airlines to maximize this positive forecast. To make these decisions, it is vital for the origination to understand the macroeconomic environment affecting the airline industry. Various framework and models have been developed to help organizations study and understand the macro-economic environment affecting their business. One example is of such framework is PESTEL (Political, Economical, Social, Technological, Environmental and Legal), used by firms to study external economic factors affecting airlines and how they make strategic decisions in order to be able to withstand the influence these factors exert on their business. Another model developed by Porter (Porter five forces model) also serve as a veritable tool that help the airlines industry to identify

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