Sm airbus joe

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Sm airbus joe

  1. 1. The Rise of Airbus, 1970 - 2005 Joe Ebiston Johny Arul Joseph A.J Josephine Monisha Judith Arockiamary Kattampalil Tess Kane Ajith Thayil Kiran Paul Manasi Anand Team Members
  2. 2. Introduction • A 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
  3. 3. 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)
  4. 4. Problems of 1970s • After WWII • Coming together of Governments • Development of A300 • Decline of Sales (Total no of planes ordered for 4 years – 20) • Establishing Consortium France's Aerospatiale 48%Germany's Deutsche Airbus 48% Spain's CASA 5%
  5. 5. Airbus in BCG Matrix - 1970 Cash Cows Dogs Stars Question Marks Industry Growth Rate Relative Market ShareHIGH LOW LOW Airbus
  6. 6. Infancy – Bernard Lathiere (1975 – 1985) • Low Sales (only 1 in 1975) • Lathiere’s winning Strategy – ‘3 Pillars’ – Family of Planes – Technological Leadership and Decentralized Production – Global Sales Strategy • Downside of Lathiere’s Strategies
  7. 7. Airbus in BCG Matrix - 1985 Cash Cows Dogs Stars Question mark Industry Growth Rate Relative Market ShareHIGH LOW LOW Airbus
  8. 8. Growth – Jean Pierson (1985 – 1998) • Internal Measures – Product Development – Cost Cutting (Lean Manufacturing) • External Measures – Sales Strategy (American Rivalry) – Subsidies (Bilateral agreement with Boeing) • 37% Market Share
  9. 9. Airbus in BCG Matrix - 1998 Cash Cows Dogs Stars Question mark Industry Growth Rate Relative Market ShareHIGH LOW LOW Airbus
  10. 10. Maturity – Noel Forgeard (1998 – 2005) • Restructuring Airbus’ Ownership – Consortium to Company • Diversification in defense products • Globalization (Supply Chain) • Marketing Strategies (53% Market Share) • Favourable Financial Performance France's Aerospatiale 48% Germany's Deutsche Airbus 48% Spain's CASA 4% British Aerospace 20%
  11. 11. Airbus in BCG Matrix - 1998 Cash Cows Dogs Stars Question mark Industry Growth Rate Relative Market ShareHIGH LOW LOW Airbus
  12. 12. Current Problems – Porter’s Five Forces Analysis No close Substitutes No supplier pressure Competition 1. Boeing’s B-787 ‘Dreamliner’ 2. Boeing’s case with the WTO on Government Loans Buyer’s power Deregulation in market Reduced demand for Jumbo carriers No new entrants
  13. 13. 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)
  14. 14. 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 ‘Airbus Accord’ 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
  15. 15. 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 revised and modified? • Should new strategies be formed to tackle this downturn and Boeing’s competition to stay in Star position? If yes, what are they?
  16. 16. Our Solution

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