The document discusses the duopoly between Boeing and Airbus in the commercial aircraft manufacturing industry. It begins by defining a duopoly as a market controlled by two companies. It then provides characteristics of a duopoly such as two firms controlling the majority of market share and price competition depending on quantity supplied by each firm. The document analyzes the commercial aircraft industry specifically, noting how mergers have consolidated it into just Boeing and Airbus. It discusses aspects of their competition like diversified product portfolios, regulations around safety, and how prices and strategies are determined. Finally, it reinforces that a duopoly has two producers dominating one market, which is the current situation between Boeing and Airbus.

1. BOING Vs AIRBUS DUOPOLY

2. What is Duopoly
?
What does it means
Characteristics
Advantages and Disadvantages
Conclusion

3. MEANING
A situation in which two companies
control all or nearly all of the market
for a given product or service. A
Duopoly is the most basic form of
oligopoly, which is a market
dominated by a small number of
companies. A Duopoly can have the
same impact on the market as a
Monopoly if the two players collude
on prices or output. Collusion results
in consumers paying higher prices
than they would in a truly
competitive market and is illegal
under U.S. antitrust law.

4. FEATURES
Two firms rule the majority of the market share
Competition depends on quantity of product supplied
Business decision depends on consideration of rivals product line.
Strong price competition – customer looks for product which is
cheaper in price.
Barriers to entry – small players may not be able to sustain or
even reach stage of competition.

5. Advantages & Disadvantages
Cut throat competition,
customer gets price benefit
Interaction
Price competition is governed
by reaction to other
competition.
Simplicity
Near Perfect Competition.
Establishment of New firms is
difficult due to Duopolies.
Lack of new products which leads
to Stale in the market.
Price monopolization & quality
compromises
Limited customer Options
Producers have an upper hand
Chances of cartelization are high

6. REAL WORLD EXAMPLES OF DUOPOLY:

7. • AIRBUS VERUS BOEING
• Aircraft industry is heavily capital intensive industry
with hugh investment in research, development,
manufacturing, and marketing technology.

8. • Competitive Environment
• Dominant and ever growing
market
• Hugh market demand
• Capital intensive
• Cut throat competition
• Regulated and governed by
various agencies.

9. Result of Mergers/Integration -
Aviation market was not Duopolistic
• 1960, there were only 12 commercial aircraft manufacturers
By 1980, only 3 left: Boeing, Lockheed Martin, and McDonnell
Douglas
Lockheed Martin forced out of market because of the dismal
failure of L-1011 Tristar
• By 1996, Boeing and McDonnell Douglas merged together
Airbus beginning as a European consortium while the American
Boeing absorbed its former arch-rival, McDonnell Douglas in a
1997
• Presently only 2 manufacturers of large commercial aircraft (100
seats and above): Boeing and Airbus

10. Portfolio Diversified– Caters to all sectors and Needs !!!
Net Orders by both Boeing and Airbus since 1991 till present :

11. Aviation is a well Regulated Market to safeguard
consumer safety !!!
• Both manufacturers operate in non-
capitalist economies.
• High capital cost & Labor intensive
• Hugh market demand. Multiple
stakeholders.
• Lack of players due to high capability
prowess required.
• Security of PAX is subprime. No
compromise is tolerable on same.
Norms are established.
• Global exposure.
• Based from different Geographies,
governed by local regulation and laws

12. Prices, strategies, Innovation and Competition is
managed by Producers
Modes of competition and Customer Choices
• Decisions to outsources across globe for components manufacturing and Supplies
•
• Technology used – range, materials, weight, automation, etc.
• Provisions of Engine Choice – from various makes and models, Green Initiatives,
reduce carbon footprint
• Currency and Exchange rates – flexibity to bill in multiple currencies, insurance
against fluctuations. Etc.
• Safety Records – majorly governed by regulations and guidelines.
• Pricing competition on discounts. No Ceiling by Government or regulatory bodies.

13. A Duopoly is a business term to describe an
industry which has just two producers in one
market. It is a similar concept to a monopoly,
except a monopoly has only one producer for its
one market. Because of its simplicity, the duopoly
model is the most studied model of oligopoly. It
should be noted that there can be more than
two producers in a duopoly, but the main two
will need to have dominant market share.

14. THANK
YOU!!!!

15.  Two Words
Duo---Two
Polies---Sellers
 Market with TWO sellers
 Just below Monopoly
 Simplest Form of Oligopoly
 Have Power to control Market
 Super Normal Profits
 Two Classifications:
One in which there is coordination b/w
duopolists.
One in which there is no coordination.
MEANING(CONTI
NUED)

16. REFERENCES
http://www.usdoj.gov/atr/cases/f1900/1973.htm
http://mit.edu/thistle/www/v12/2/credit.html
http://wikipedia.org
http://slideshare.net.