Boeing Business Strategy Alternatives & Recommendations

1 January 2017

In this section, we will discuss two main ideas: first, the new challenges facing Airbus as an emerging industry leader and alternative solutions and recommendations to their current and possible future problems. Our goal is to define how Airbus might maintain their industry leadership in aircraft manufacturing and also recommend how Boeing might redefine their strategy to reclaim market leadership and solve current their list of current and potential problems.

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First, Airbus needs to address the following problems and issues in order to maintain its current market share leadership: (A)Potential failure to meet A-380 production deadline and costs (B)Threat of imitation of low-cost strategic positioning using technological differentiation by Boeing to re-claim Airbus market niche (C) Resolve or improve the complex semi-governmental multi country business model that slows the decision making process, creates complex labor and legal issues and could potentially limit rapid growth and meet market demands.

If Airbus does not efficiently complete the A-380 Super Jet project, they will have failed on multiple fronts. They will have undermined their current position as market leader by undermining customer and industry trust, they will have be impacted by the significant financial risk and debt they took on to do this project and perhaps most importantly, they will have undermined their future business strategy of large scale manufacturing through technological differentiation and more efficient global travel–which maintains their cost-leadership industry position.

This leads us to the second threat that can and will undermine Airbus as an industry leader. As mentioned above, the current (and successful) low-cost leadership strategy of Airbus can and will be copied by Boeing or other manufacturers if possible. It may not be easy or cost efficient for them to do so immediately but like Intel, Boeing’s speed to market and promise to ive their customer’s an aircraft in three days is perceived as adding value through efficiency and cost reduction. The third problem that Airbus faces is complicated and not easily resolved and this refers to their financial structure and semi-governmental organizational system. On the one hand, Airbus can manufacture more efficiently than Boeing due to decentralized specialization but from an administrative point of view, they are slow to make positions.

If Airbus can maintain the competitive advantage of broad financial support, decentralized manufacturing efficiencies and technological design, production superiority while simultaneously making their organizational administrative functioning more efficient and less vulnerable to industry critiques, Airbus will clearly have a really good chance of maintaining industry leadership.

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