• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Collision Course in Commercial Aircraft.

Extracts from this document...

Introduction

Nile W. Hatch Marriott School - BYU Instructions for Airbus A3XX: Developing the World's Largest Commercial Jet In this case, we will be analyzing strategic interaction between Airbus and Boeing, the two leading producers in the global commercial aircraft industry. In particular, we will be considering Airbus' proposed launch of the A3XX, their entry into the intercontinental jumbo jet segment, and Boeing's potential competitive responses to this entry. We will attempt to answer the questions: Should Airbus enter the jumbo jet segment? If so, how? And, what should Boeing do about it?1 An appropriate analysis of this situation requires the integration of a variety of tools and concepts to which you have been introduced both in this course and the rest of the MBA curriculum. In particular, you will use cashflow analyses of the different scenarios that could play out in this industry and attempt to understand which of these scenarios are more likely to occur by applying game theoretic reasoning to this situation. Based on this analysis, you will then make recommendations concerning what your team thinks Airbus or Boeing should do2. While your quantitative analysis of this situation should form a basis for your recommendation, you should certainly consider other factors you deem important (but not accounted for in the model) ...read more.

Middle

This principle refers to the idea that when attempting to determine what your course of action should be in a given situation, it is important that you consider the potential responses a competitor may use. If you can anticipate how a competitor is likely to react in a situation, you can pick your actions contingent on those potential responses, thus, improving your performance. Throughout this quantitative analysis of Airbus vs. Boeing, you have been applying the principle, "Look forward, reason back." When you account for the pricing strategy used by Boeing when determining Airbus' pricing strategy, you are applying this principle. When you consider the outcomes of the pricing competition between Airbus and Boeing while deciding whether to launch a new jumbo jet, you are once again making use of this important principle. When you attempt to figure out whether Airbus should launch the A3XX based on Boeing's potential responses to Airbus' strategy, once again you are "looking forward (to Boeing's response), and reasoning back (to figure out what Airbus should do)." Thus, this fundamental principle is nested throughout the analysis. Exercising Judgement in the Use of Quantitative Analysis The exercise of constructing a quantitative model of a business situation is valuable for a number of reasons. ...read more.

Conclusion

So, as the price for aircraft goes up, the expected level of demand goes down. Second, airlines decide whose aircraft they will buy based on who provides the best efficiency advantage. In this model, your market share is equal to the efficiency advantage you provide relative to your competitors. Having this factor included in the model means that Airbus has slightly more pricing flexibility relative to Boeing because the A3XX is 20% more efficient than the Boeing according to case. However, we can assume that such an advantage disappears if Boeing launches a new plane. This leads to another point. The model explicitly assumes that operational efficiency is the only form of differentiation advantage available to Airbus and Boeing, but there are others. For example, we might expect the design of the passenger cabin, etc. would be important to Airbus' and Boeing's customers, the airlines. In addition, Boeing probably has more brand name and reputation capital than Airbus. After all, the 747 has been flying for 30 years with one of the lowest accident records of any aircraft. These are just a few examples of the types of issues you can think about. Obviously, given the space constraints that you face, you can't write about everything, and you need to prioritize your analysis. But, it is good practice to think in pretty broad terms about these issues. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Marketing & Research section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Marketing & Research essays

  1. Strategic Analysis of Woolworths

    Woolworths has an average of 7.95 per cent revenue growth in the past five years, a higher percentage compared to its competitors, such as Coles/Bi-Lo, which indicate Woolworths' ability to generate cash flow. Strong financial position in its retailing industry is one of the strengths possessed by Woolworths (Fifield, 2005, p.

  2. For this assignment I have been asked to produce a new marketing strategy for ...

    Distribution policy: ? The number of outlets- an organisation needs to decide whether it should be local, selective or aim to saturate the market. ? The area to be covered- an organisation must also decide whether to stay local, or go national or even international.

  1. Unit 2 Investigating business

    It will be better for my business if local people apply and get the job as it is easier for them to get into work so even if there are for example extreme weather circumstances like snow and ice they will still be able to make it into work in case we need them.

  2. Applied Business Studies

    Stakeholders in my business I will now go on to the next section of my work which is about stakeholders, and I will be talking about the role and importance of them in general, and then specifically about my business.

  1. Marketing analysis of Marlboro cigarettes

    In the past, people taken many kinds of cigarettes to just enjoying their fun and satisfaction, but now most of the young men adult nowadays like to take Marlboro Cigarettes. The Marlboro Cigarettes make them look smarter, cool and more confidents.

  2. Applied Business Unit 2 Coursework

    it clear whether the skills, attributes or qualifications are essential or desirable. However I think it is very important and I will include it in my person specification. Another feature I think is very important and common to all 3 of the person specifications is how clear it is.

  1. Business Enterprise unit 5

    will gives a more personal service to my customers and I will be able to make changes within my business very quickly, due to the fact that there is little or no bureaucracy, as I will be the only one in control of the decision making process.

  2. GLOBAL STEEL INDUSTRY DEVELOPMENT

    The production of finished steel during April -December, 2002 has been 23.83 million tonnes, which is 6.3% higher than the production during the corresponding period of 2001-02. Details of total production of finished carbon steel and the share of main and secondary producers in it from 1991-92 onwards are set

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work