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IntroductionA journey from Infancy to Growth to Maturity
Historical Journey
Problems of 1970s Strategies of Bernard Lathiere (1975 1985)
Strategies of Jean Pearson (1985 1998)
Strategies of Noel Forgeard (1998 2005)
Current Problems
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Commercial Aircraft Industry Enormous risks 1980s four companies
(Boeing, McDonnell Douglas,
Airbus and Lockheed)
1990s Duopoly (Boeing and Airbus)
High Development costs (at least 300 to 400 planes)
Complex technology
Material innovations
Need of Government support Deregulation (allowing smaller short
distance
aircrafts)
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Problems of 1970sAfter WWII
Coming together of Governments
Development of A300 Decline of Sales (Total no of planes ordered
for 4 years
20)
Establishing Consortium
France'sAerospatiale
48%Germany'sDeutsche Airbus
48%
Spain's CASA5%
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Airbus in BCG Matrix - 1970
Cash Cows Dogs
Stars QuestionMarks
IndustryGrowthRate
Relative Market
Share
HIGH LOW
LOW
Airbus
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InfancyBernard Lathiere (19751985) Low Sales (only 1 in
1975)
Lathiereswinning Strategy 3 Pillars
Family of Planes Technological Leadership and Decentralized
Production
Global Sales Strategy
Downside of LathieresStrategies
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Airbus in BCG Matrix - 1985
Cash Cows Dogs
Stars Question mark
IndustryGrowthRate
Relative Market
Share
HIGH LOW
LOW
Airbus
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GrowthJean Pierson (19851998) Internal Measures
Product Development
Cost Cutting (Lean Manufacturing) External Measures
Sales Strategy (American Rivalry)
Subsidies (Bilateral agreement with Boeing)
37% Market Share
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Airbus in BCG Matrix - 1998
Cash Cows Dogs
Stars Question mark
IndustryGrowthRate
Relative Market
Share
HIGH LOW
LOW
Airbus
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MaturityNoel Forgeard (19982005)
Restructuring Airbus Ownership
Consortium to Company
Diversification in defense products
Globalization (Supply Chain)
Marketing Strategies (53% Market Share)
Favourable Financial Performance
France'sAerospatiale
48%
Germany'sDeutsche Airbus
48%
Spain's CASA4%
British Aerospace20%
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Airbus in BCG Matrix - 1998
Cash Cows Dogs
Stars Question mark
IndustryGrowthRate
Relative Market
Share
HIGH LOW
LOW
Airbus
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Porters Five Forces Analysis
No close Substitutes
No supplier pressure
Competition
1. Boeings B-787 Dreamliner
2. Boeings case with the WTOon Government Loans
Buyers power
Deregulation in market
Reduced demand for
Jumbo carriers
No new entrants
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SWOT Analysis Strengths
Technology Leadership
Lean Manufacturing (Global Supply Chain)
Ownership of company
Diverse products
Strategic Alliances
Strong Marketing support
Weakness Lack of adaptability to changing environment (failure
of
A350)
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SWOT Analysis (Contd.)
Opportunities Low cost mid sized planes segment
Threats Stiff competition from Boeing (B787 Dreamliner)
Political Lobbying by Boeing (case in WTO and AirbusAccord in US
Govt)
High development cost
Decline in the value of Dollar
Decline in demand for Jumbo Carriers Increase in Fuel Prices
Recession and decline in use of air travel
Decline in Competitive edge in Airbus
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Questions to be answered Should Airbus implement its past CEOs
strategy in
order to increase its competitive position?
Should some earlier policies and strategies be revisedand
modified?
Should new strategies be formed to tackle thisdownturn and
Boeings competition to stay in Star
position? If yes, what are they?
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Thank You!!
