2. What factors are important in understanding this decision situation? The competitive world of airplane building pits

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2. What factors are important in understanding this decision situation? The competitive world of airplane building pits two rivals, Boeing and Airbus, against one another. In the most recent calendar year, Airbus won the battle for total number of orders by just 82 planes with over 1,100 planes sold. However, Boeing easily won the battle in the all- important, highly profitable market for wide-bodied jets. As a result, although Boeing sold fewer total planes than Airbus, Boeing executives gladly will trade the increased profits their orders generated versus those that Airbus realized. In addition, product delays recently announced at Airbus have resulted in the removal of their top executives. Consequently, Airbus's path to the top of this hypercompetitive industry just became much more difficult. Both Boeing and Airbus operate in the business-to-business marketplace as producers of passenger and cargo airplanes. As such, the companies are dependent on other companies, including airlines that fly people around the world and freight haulers like FedEx and UPS, to purchase their airplanes. The recent discrepancy in profits is the result of drastically different views each company has of their airplane buying customers and the future of air travel. The company that guesses right on the future stands to benefit greatly; industry experts believe that air travel will triple in the next few decades resulting in orders for 40,000 new planes over that time frame. Obviously, the company providing the majority of those new planes, especially those in the profitable, wide-bodied line of products, stands to reap huge profits. However, before deciding which of the two companies is best positioned to win this competition, it helps to know a little about each one and their views of the marketplace.

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Marketing Real People Real Choices

ISBN: 9780132299206

5th Edition

Authors: Michael R. Solomon, Greg W. Marshall, Elnora W. Stuart

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