International Business Essay

Submitted By ParvinSindhi1
Words: 3307
Pages: 14

1. Introduction The aim of this assignment is to provide detailed strategic analyses of two major civil aircraft manufacturers Airbus and Boeing. The discussion of the report is separated into external and internal analyses, which are provided in greater details and with graphs. Lastly the report recommends of the best strategic option for both companies. 1.1Company’s Background: Airbus: Airbus is the long leading manufacturer of commercial jetliners and military aircrafts. The company operates in Europe, the middle East, Africa, Asia-Pacific and Americas. The headquartered is in France and 59,000 people employed. (Airbus, 2013a)Airbus was found in 1970 as a consortium to include four countries: british Aerospace (Germany), Daimler Chrysler, France’s Aerospatiale and Sapin’s Casa.(F.Hartley, 2008) Airbus was gaining market share from 1990s and one of the reason was that they have introduced the ultra-efficient A330 and A340 airplanes. EADS board of directors had discovered AIRBUS 380 in December 2001. EADS have won 56% of 396 order placed by airlines in 2003. Aircraft fuel burn and CO2 emission has been reduced by 75%. Airbus 380 which carry 42% more passengers and 50% less noise pollution on departures. Airbus has install bio fuel value chains around the world. The revenues increased 10% and $45,279.5 million during the FY 2011. (Airbus, 2013b) Boeing: The Boeing Company is the well-known U.S based aerospace firm and manufacture of commercial jetliners and military aircrafts. Boeing operates in more than 70 Countries and does business with over 140 countries. Boeing’s corporate office is in Chicago and employed more than 1, 70,000 people. (Boeing, 2013a) Boeing had famous past.The company’s efforts to major factor in world war II, led the way to produce innovative and state-of –the-art commercial aircrafts. Boeing had acquired Rockwell International’s defense business in 1996 and McDonnell Douglas purchased for $16.3 billion. Boeing had designed 777, the first jet with the use of computers with high technology. (F.Hartley, 2008) Boeing has developed and focused on Boeing 787 Dream liner .In terms of revenue Boeing has made $66387 in 2006, $68281 in 2009 and $68735 in year 2011. Boeing’s Carbon dioxide emission increased by 3%, energy by 5%, in year 2011, hazardous waste by 8% in year 2011. (Boeing Enviornment Report, 2012a)

2.1 Analysis of external environment:
The aircraft industry faces a broad set of environment which affected by PESTLE forces. Management Paradise pointed out in 2011 that regulations by the United States and European governments may prove to be major driving forces for order of new aircrafts and engines. The same way the deregulation of European airlines which begun in early 1990s, holds the promise of expand market prospects for smaller regional jets. Commercial Airplanes manufactures heavily reply on subsidies .Boeing and Airbus are on the debate of unfair subsidies. Factors like increasing fuel costs, congestions and other environmental restrictions, higher security and insurance costs to show the risk of terrorism can be consider as economic factors. Reluctance to fly, need to rebuild confidence in air travel are social forces. Due to expanding market reach at economies of scale in production lines, E-commerce methods of selling tickets are technological forces

| The Porter’s five forces model is useful to access the competitiveness of the airlineindustry. It can review the competition in the industry.

1. Threat of New Entrants: The threat from new entry in aircrafts manufacturing industry is low as it is extremely difficult and due to high development costs. The huge capital and knowledge are required for newcomers.Boeing and Airbus are manufacturers for commercial jets industry and supply the whole demand to the world, the entry for new comer in super-jumbo segment will be very risky as two legend companies has already made their