Case Study:

The Famous "Boeing Vs Airbus" Competition

There is no duopoly (Two companies competition) in the world fiercer or a rivalry as complex as Boeing vs. Airbus. Both firms have been around for decades, developing many of the aircraft that we love and have ushered in a new golden age of air travel. But which company is more successful?

Both firms are titans in their own right, having survived other commercial passenger attempts like Lockheed Martin and Convair. Airbus and Boeing are huge companies, both winning government contracts, powerful political sway, and have an in-depth history. To summarise them and their relationship in a single case is not easy and shouldnt be the end-all comparison, but should be considered just the beginning of the study in competitive rivalry and how to manage it.

How did they become rivals?

All stories have a beginning, and for Boeing vs. Airbus, it starts with the founding of Airbus.

Airbus came into existence during the development of the A300 aircraft. State-run or influenced airlines in the 1960s wanted to upgrade their aircraft to the next generation (they had a mix of Boeing 707s and others). However, there werent any suitable European aircraft available on the market to satisfy their needs. European governments wanted a slice of the growing airframe market, but Boeing and other builders were too big for any single European firm to take on.

Thus they formed a conglomerate of European firms to build an aircraft with the express purpose of competing with American plane manufacturers. This conglomerate would become Airbus, and they would bring to the market the A300 as a Boeing rival.

From here, the race was on and both companies started to build their competitive portfolios.

Right from the get-go, the European government had a plan to build a series of aircraft to compete with each Boeing offer. Once the A300 and its variant the A310 were complete, various tenders went out for a competitor to the Boeing 747 and Boeing 737.

Interestingly, each tender failed to secure a new consortium on the market and defaulted back to Airbus (who logically, in retrospect, should have had the contract first). They would go on to develop the A320, A330, and A340, respectively.

By now, Airbus had become Boeings enemy number one on the aircraft marketplace. Both firms were friendly to each other, although they were very much in competition.

Airbus managed to strike a blow to Boeing when they secured a large Airbus A320 order with American Airlines (something that they repeated only last year), right in Boeings backyard. Thus Boeing needed a new aircraft to compete and bring the ball back into their court.

The Boeing 777 was to be the perfect aircraft platform to rival Airbus A330 and A340 series. Boeing consulted with several airlines to design the aircraft, and its technological improvements managed to undercut sales of the A340 dramatically.

At this point, Airbus and Boeing faced a crossroads. With air travel demand on the rise, the firms had to design a new aircraft fit for the future of the market.

Source: https://simpleflying.com/boeing-vs-airbus/

Explain the term strategic leader. Explain in your own words who among these companies would be likely to become a strategic leader.

Explain the product portfolio. What are the product polios of Boeing and Airbus?

Define SWOT Analysis. How has this environment analysis helped both the companies