Strategic management of boeing and airbus

The strategic groups, as well as a brief analysis of the industry life cycle, will also be discussed. The study will also outline the critical success factors which drive performance now and in the future and it will attempt to summarise key points and give a brief conclusion. The structure of the civil aircraft manufacturing industry is quite complex and a bit challenging for new entrants to survive profitably. Research has shown that this industry is capital-intensive and requires highly sophisticated technology and enormous economies of scale (Xu and Chan 2008). It can be noted that the global large civil aircraft industry has been dominated by The Boeing Company (“Boeing”) and Airbus S.A.S. (“Airbus”).

Established in 1970, Airbus has been in the business of civil aircraft manufacturing for over 30 years now but it, more importantly, the introduction of the A320 aircraft, during the 1980s, the airline managed to establish their place as a major manufacturer in the civil aviation industry. It produces about half the world’s jets. On the other hand, Boeing is another internationally renowned aircraft manufacturer with a range of models of aircraft which tightly competes with Airbus. As a result of the stiff competition, these two aircraft giants often respond to each other by manufacturing equally attractive aircraft as a way of attempting to waiver tight competition that exists between the two. In view of this scenario, it is imperative to analyze the nature of the civil aviation industry using Porter’s five forces model, PESTEL, strategic groups as well as industry life cycle as a way of evaluating if this is a lucrative sector to compete in.

According to an article entitled, ‘Five competitive forces –Porter’(n.d), the five forces model of Porter is, “an outside business strategy tool that is used to make an analysis of how attractive an industry is.” This is often regarded as a reliable business tool in most cases that aims to diagnose the external factors that affect the operations of the organization such as competition (McCarthy J.E & Perreault W. D. 1996).

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