Airbus vs Boeing: Competing in Commercial Aviation

TEAM
TEAM CLARO!
CLARO!
CHAVES
CHAVES
GUILLERMO,
GUILLERMO,
GOMME,
GOMME,
JOHNSON,
JOHNSON,
LANGKAMMER,
LANGKAMMER,
LPEZ
LPEZ RIVERA,
RIVERA,
PAPADELLIS
PAPADELLIS
Competing in Commercial Aviation for

the Airlines
Case in point : Airbus A380 vs. Boeing
787 Operations and SCM
GMBA+
GMBA+ BLENDED
BLENDED 22
GLOBAL
GLOBAL OPERATIONS
OPERATIONS AND
AND SUPPLY
SUPPLY
CHAIN
CHAIN MANAGEMENT
MANAGEMENT
PROFESSOR
PROFESSOR
LUIS
LUIS EDUARDO
EDUARDO SOLS
SOLS GALVN
GALVN
1. Industry Context and Competitive Environment
Company Overviews
Headquarters: Chicago
Headquarters: Toulouse, France
Business areas: Manufacturer of commercial jetliners

and military aircraft. Additionally, designs and
manufactures rotorcraft, electronic and defence
systems, missiles, satellites, launch vehicles and
advanced information and communication systems.
Business areas: Aerospace and defence

related services.
Global Reach Provides products and support services

to customers in 150 countries.
Employees: Boeing employs more than 170,000 people
across the United States and in 70 countries
Global Reach: Fully-owned subsidiaries in

the United States, China, Japan and in the
Middle East. More than 150 global field
offices.
Employees: 59,000 globally.
Supply Chain: Hundreds of thousands more skilled

people working for Boeing suppliers worldwide.
Supply Chain: Has a network of 1,500

suppliers in 30 countries
2012 Net income: $3.9 billion
2012 Net income: $1.59 billion (parent

company EADS)
2012 net orders: 1203

Market Share: 59%
Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer,
Lpez Rivera, Papadellis
2012 net orders: 833

Market Share: 41%
Page 2

Primary customer for Boeing and Airbus is global airline industry. To
understand their market position we need to establish the current state of
the global Airline business.
Strong Prospects for

Growth
Demand in the airline industry generally correlates with global economic activity which
drives spending on air travel.
The growing global middle class and increased levels of urbanization are generating
sustained levels of demand.
Passenger traffic rose 5% between 2011 and 2013 and this trend is expected to
continue in the long term. Boeing predicts that there will be 35,000 new aircraft in
circulation in 20 years.
The majority of this growth will be driven by emerging markets.
Fuel Price Driving innovation

One of the most important considerations for the airline industry is fuel
price (represents 30% of global airline operating costs)
Technological advances are making aircraft much more fuel efficient
and cheaper to run. As a result, airlines everywhere are looking to
replace older planes and update their fleets.
Combined with enhanced demand, this is good news for manufacturers
like Boeing and Airbus. Are looking at sustained long-term market
growth and a boom in sales.
The Airbus A380 and the Boeing 787 Dreamliner, represent efforts to
take
the Chaves
initiative
and tap Gomme,
into the Johnson,
demandLangkammer,
for more efficient models.
Team
Claro!
Guillermo,
Page 3
Threat of substitute
products
Extremely low. No direct
substitutes to air travel.
High speed rail cannot compete
Rivalry among existing

competitors
Industry is currently in a state of
duopoly. US-based Boeing and
European Airbus dominate the
global market.
Extensive rivalry exists between
these two players.
A380 vs 787 Dreamliner is the
latest embodiment of this
rivalry.
Bargaining power of suppliers

Manufacturers engage a huge
variety of subcontractors to
develop end product
The power of the supplier depends
on the nature of the component
being supplied. Suppliers of rare
resources, such as carbon fibres, or
highly specialized techniques have
a certain degree of influence
Ultimately the power rests with the
duopoly.
Threat of new entrants

The sustained growth in the
industry is starting to attract new
entrants.
However risk of entry is very high
due to high level of investment
required to undertake the
necessary R&D and production.
Strong barriers to entry:
i. High costs involved
ii. Takes time to build product
long time before sale
iii. Large degree of technical
expertise required.
Bargaining power of buyers

Again, the duopolistic nature
of the industry at present
does not present airlines with
a great deal of choice or
influence.
However bargaining power is
increasing due to emergence
of more manufacturers a
combination of more
manufacturers.
Page 4

Page 5
2. Key Corporate Objectives - Airbus

Vision: Creating the Best and
Safest Aircraft
Airbus Industrie Headquarters:

Toulouse, France
Long Term Goals:

Deliver strong
results in a sustained
manner
Market Share: at
least HALF of the world
commercial aircraft
over the long term
Mission
Statement:
Meet the needs
of airlines and
operators by
producing the
most modern and
comprehensive
aircraft family on
the market,
complemented by
the highest
standard of
product support
Key Objectives:
Further internationalization
Focus on Key Geographic
Markets
Expand Customer Service
Offering
Restore Competitive edge
Flexibility
Efficiency

Page 6
2. Key Corporate Objectives - Boeing

Vision: People working together as a global enterprise for
aerospace leadership
Mission
Statement: Be
the leader among
the premier
industrial
concerns in terms
of quality,
profitability and
growth
Boeing Headquarters: Chicago, Il,
USA
Objective: Attain the following Core Competencies:
Customer Knowledge and Focus

Large Scale system integration on a global level by
outsourcing
Lean Enterprise

Page 7
3. Marketing Strategies - Airbus

Strategy: Airbus wanted to break Boeings stronghold in long
range, big capacity Airplanes with the new A380 and new
technology
Airbus believes in Hub-and-Spoke
o
Airbus expects high traffic between

international hubs
Large airports with constraints of

airport slots
A380 maximizes yields per slot for

connecting flight
Delivers efficiency through economies

of scale
o
Large airplane offers economies of

scale (-20% cost per seat than Boeing
747)
New seat 840 seat configuration cuts

cost by 70%-80%
Most luxurious cabins in the industry;

adds to the image of high quality
airlines
Team
o Claro!
Gomme, Johnson, Langkammer,
I+D:Chaves
RisksGuillermo,
and Innovation
Page 8
3. Marketing Strategies - Boeing

Strategy: Boeing wanted to meet its need to have a product to
compete in the market
Boeing bets on Point-to-Point Model
for mid-long range air transport
o
The plane travels directly to a

destination, rather than going through a
centralhub
New market segment: long-haul aircraft

but average size
Secondary airports with no facility to

accommodate large aircrafts
Make it simple and cost-effective for

airlines to operate
Delivers economy through technological

innovation
o
B787 Dreamliner competes in the mid-long

range aircraft
Fuel-efficient twin engines
Lightweight composite materials
Availability of different cabins for different

classes: Moodlight function allows
differentiation
of Gomme,
cabinsJohnson,
without
physical
Team Claro!
Chaves Guillermo,
Langkammer,
Lpez Rivera,
wallsPapadellis
Page 9
4. Order Qualifiers and Order Winners
Order
Qualifiers
Reliability
The Company has to be as reliable as their
aircraft. Boeing and Airbus sell multi-million
dollar products to their civil aviation
customers. Airlines base their operations in
this aircrafts and reliability is expected.
Conformance
Product conformance is a must in the civil
aviation industry. Safety standards and
Aviation regulatory bodies establish very clear
rules that have to followed.
Performance
(65%)
Do better than the rest, with less
fuel
Serviceability (20%)
Make it easy for my operations and give
me support in time, every time
Perceived Quality
How the product is perceived is very important
in this industry. Current events are a clear
example
Order
Winners
Durability (15%)
Oh yeah!! And it has to last
Dependability (Delivery Time)
So much
asGuillermo,
it might sound
weird...
Yes,Langkammer,
it is a
Team Claro!
Chaves
Gomme,
Johnson,
qualifier.
Lpez Rivera,
Papadellis
Page 10
5. Main Transformation Process - Boeing
Organizational Transformation:
Global Supplier Coordination
through Supply Chain
Management
Boeings supply chain had to be transformed to
accommodate management of suppliers
through four continents. Timing is critical, and
so are specifications and technical coordination
when we talk about tolerances of up to
1/5000th of an inch.
Operational Transformation:
o
From integrating separate

designs to design with
suppliers
Boeing Suppliers, from four continents to Everett, WA, USA
Components had to be built from

scratch, and compatibility had to be
gained from the design phase.
From manufacturing for

customers to manufacturing
with customers
Customers were asked to come onboard
during the assembly process. Insight is
gained on both sides.
General Electric Genx Engine, Created for and with the 787
Technical Transformation :
TeamFrom
Claro! Chaves
Guillermo,to
Gomme,
Johnson, Langkammer,
Aluminum
Composite
Page 11
5. Main Transformation Process - Airbus
A380 Parts, on their way to Toulouse, France
Organizational Transformation:
European-centered Supplier
Coordination
Construction of Port facilities

Development of new roads
Oversized road convoys
RORO fleet ship and barges
Operational Transformation:
o
Design
A3XX project / Not just a copy paste
product
Double digit operating cost reduction
More range, quieter and more cargo
volume
Production
Main fuselage, wings, fins and control
surfaces manufactured all over Europe.
Assembly takes place in Toulouse,
France. Interiors & further testing in
Hamburg, Germany.
Timeline, A380
Technical Transformation
Systems Integration
Control / System redundancy
Size / Performance
Active load alleviation
Digital mock up systems
Advanced
composite
materials
Team Claro! Chaves
Guillermo,
Gomme,
Johnson, Langkammer,
wing box
Lpez Rivera, Central
Papadellis
Page 12
6. Major Infrastructure Dimensions of the Operation

Strategies - Airbus
1.500 suppliers in 30
countries
Five spare part centers
120 field sites
Three training centers
Six Center of Excellence (CoE)
Streamline and unify design and production processes
Reinforce cross-national
relationships
o

Operations: Six CoE are

responsible for manufacturing
components and final assembly
o
UK: Wings in UK
Germany: Forward, tails and fuselage
France: Pylon and Nacelle
Spain: Horizontal tail
Toulouse / Hamburg:
Final assembly
Page 13

Strategies - Airbus
Information systems to
streamline
communication within the
network
Chose
suppliers on
best-value
basis
Full supplier
responsibility
New R&D capabilities

& financial backing
Efficient
and
integrated
supply
chain
Supplier portal to share

documents &
specifications and to
manage inventory levels
andChaves
orders
Team Claro!
Guillermo, Gomme, Johnson, Langkammer,
First-tier suppliers are

involved in concept and
product development
Globalization
(spread financial
risks, open new
markets)
RFID technology to
trace parts, make
maintenance easier
Page 14

Strategies - Airbus
Supply Chain risk sharing
partnerships
Significant risk for Airbus of economic

crisis or terror attacks on airplane
demand
Risk bearing-contracts a central tenet

of Airbus growth strategy
Risk-sharing partnerships with 30 key
supplier
3.1 US $ / approximately 25% ofRisk

non- of loosing competitive edge
recurring costs of A380 covered by
Suppliers are less willing today to take risks
suppliers
After 9/11 many suppliers cut back their risk

sharing agreements
Difficult to efficiently manage its overall

supply chains
Long-term risk of loosing competitive edge

Page 15

Strategies - Boeing
The entire Boeing supply network includes
some 28,000 suppliers
783 million parts are procured each year

The Company also has 6 R&D centres and
relationships with over 50 international
universities.
There are more than 500,000 people caught

up in the supply chain
Supply chain management is therefore a vital part of

Boeings operations. They have invested heavily in
establishing close relations with suppliers and
infrastructure that involves constant dialogue and
feedback.
Stanley Deal
Vice President and General
Manager
Supply Chain Management &
Operations
Web portal developed

exclusively for suppliers to
give them constant access
to evolving standards &
developments

Hold an annual Supplier of

the Year ceremony where
all suppliers come together
and best performers are
recognized for their efforts
Page 16

Strategies - Boeing
The 787 brings together more than 40 diverse
suppliers more than any other model in
Boeings history.
Air Cruisers
Alenia
Aeronautica
Bridgestone
C&D Zodiac
Dassault
Systemes
Delmia Corp.
Diehl Aerospace
Donaldson
Eaton Aerospace
Esterline
Fuji Heavy
Industries
GE Aviation
GE Engines
GKN Aerospace
Goodrich
Hamilton
Sundstrand
Honeywell
Intercim
Intertechnique &
Avox
Ipeco
Jamco
Escape slides
Centre Fuselage, horizontal stabilizer
Tires
Windows, Doors
Tools/software
Software
Main cabin lighting
Air purification system
Pumps, valves, hydraulics etc.
Flight deck control panels
Centre wing box
Landing gear actuation and control
system, etc
Engines
Composuite mat for wing ice protection
Engine nacelles, numerous systems
Auxilliary power unit, environmental
control systems
Navigation
Software
Oxygen systems
Flight deck seats
Lavatories, galleys, bar units etc

Kawasaki Heavy
Industries
Kidde Technologies
Toray
Fixed trailing edge, forward

fuselage
Fire protection system
Wing tips, stringers, nose wheel
well
Wiring
Passenger doors
Electric brakes
Landing gear structure
Wing box
Water & waste systems
Flight control actuation system
Cabin services system
Hydraulic subsystem
Metallic tubing and ducting
Dimmable windows
Displays, pilot control systems,
communications
Engines
Cargo doors
Emergency lighting systems
Forward fuselage, flight deck,
engine pylons etc
Prepreg composites
Ultra Electronics
Wing ice portection
Korean Airlines
Safran Labinal
Latecoere
Messier-Bugatti
Messier-Dowty
Mitsubishi Heavy
Monogram Systems
Moog
Panasonic
Parker Aerospace
PFW
PPG Aerospace
Rockwell Collins
Rolls-Royce
Saab
Securaplane
Spirit Aerosystems
Page 17

Strategies - Boeing
Picture of
a Truly
Global
Supply
Chain
Wing tip
Korea
Centre Fuselage
Italy
Tail fin
Washington, US
Aft Fuselage
Charleston, US
Wing
Japan
Stabilizer
Italy
Engines
UK & Ohio, US
Cargo access doors

Sweden
Moveable trailing edge

Australia
Forward Fuselage
Kansas
Landing Gear
UK
Passenger entry
doors
France
Forward Fuselage
Japan

Page 18

Strategies - Boeing
Ensuring Quality in the Supply Chain
Boeing have implemented infrastructure
that guarantees the highest standards
throughout their supply chain
In order to become a Boeing supplier,

organizations must certify that their production
systems meet Boeings Quality Management
System requirements an extensive set of
international standards and criteria covering
almost every aspect of their operations.
All suppliers must also have their systems

approved by the Federal Aviation Administration
before Boeing will accept them as a supplier.
Suppliers are audited regularly, undergoing full

site visits by Boeing audit teams.
Boeing personnel are embedded within supplier

organizations globally to monitor quality, work
with suppliers on process improvements, and
ensure adherence to Boeing standards and
schedules
Page 19

Strategies - Boeing
Diligence in Handling
Design Changes
Design changes to commercial airplanes such as the 787 Dreamliner often have to be made to
improve efficiency or performance, meet new regulations or address evolving customer
demands.
When they required to make design changes, Boeing follows a very rigid process to ensure that
the overall integrity of the aircraft is not compromised. This redesign is a process that involves
participation from representatives throughout Boeings operations and its supply chain.
When the need for a product change is identified,
representatives from throughout the entire of Boeing

come together to analyse the potential change
options.
When a solution is decided upon a change proposal is

drafted which must then be approved by
management. All groups who the change will affect
are duly notified
Senior engineers for all different parts of the aircraft
go over the proposal to determine how the proposed

change it will affect their section.
Develop
Obtain
Develop
change
program
plan
proposal
approval

Execute
change
Certify
change
Page 20
7. Companies Culture and Values - Airbus

Companys Culture: Airbus day-to-day
operations are guided by a strong commitment
tointegrity, transparency and professionalism
across its operations:each and every employee
is committed to defending high ethical
standards in business relations inside as well as
outside the company.
AFCs, Airbus Key

Competencies, a set
principles within Airbus
that encapsulates the
mission statement of
the
The organization.
skill of Airbus
employees are
cultivated through
regular workshops and
training, ultimately
leading to career
advancement
and staff
ISO
14001Certified.
retention.
Environmental
awareness and
responsibility
permeates the
procedures and
processes associated
with
R&D.and vendors
Suppliers
must adhere to the
CSR philosophy of
Airbus. Regular audits
occur to check
compliance.
Values: The Airbusway
Deliver Customer Value

Develop Oneself and
Others
Drive Improvement and
Innovation
Practice Teamwork

Page 21
7. Companies Culture and Values - Boeing

Companys Culture: Proud, but not satisfied.
Continuous innovation, aspiration
andimagination
Our Values: At Boeing, we are
committed to a set of core values
that not only define who we are,
but also serve as guideposts to
help us become the company we
would like to be.And we aspire to
live these values every day
1.
2.
3.
4.
5.
6.
Leadership
Integrity
Quality
Customer Satisfaction
People Working Together
A Diverse and Involved
Team
7. Good Corporate
Citizenship
8. Enhancing Shareholder
Value
Page 22
8. Major Capabilities Developed - Supply Chain

Management
The Organizational
Transformation has led to
improvements in the Supply
Chain Management
o
Information Control
Currently, throughout the production
process, performance, operations, financial
aspects and strategy are continuously
monitored, which provides extremely
important information on all levels of the
supply chain
Airbus Managed Inventory: Automated Component

Replenishment
Better management of
infrastructure, facilities and
work flows
Clear improvements support the complete
process related to material, logistics and
suppliers, thanks to a flexible value-adding
material management service that fits with
customer needs.
Airbus Beluga: Air Transport of large A380 fuselage
components

Page 23
8. Major Capabilities Developed - Technical and

Operational
Operational Transformation has led to

Improved Services to Customers :
o
Offering Telemetric Services for their

Aircraft
See the performance of your Aircraft real time, all the
time. Immense advantage for airlines in terms of
operation efficiency.
Offering a more comprehensive AfterMarket Service

Full service during all the Aircraft lifecycle has been
Boeing Gold Care Program: Lifecycle maintenance
improved due to all the eventualities found during the
and consulting
development of these projects
Technical Transformation has led to

mastery of complicated new techniques
o
Solving Composite Structural Problems

Many unforeseen problems occurred after the design
phase. Engineering took care of it through test after
test.
Developed Worker Expertise and Internal

Know-how
Both Companies have learnt the fast and hard way

o Environmental
Advances
Lpez Rivera,
Papadellis
Boeing Everett: Assembly of Composite main

Structures
Page 24
9. Level of Alignment
+35% seating
+49% more floor space
-15-20% cost per seat
-13% less fuel
Adds capacity for

bottleneck routes
Order
Winners
Cheaper and efficient

airplanes
-20% less fuel & -10%

costs/seat
Performance (65%)
-
-20% operating costs
-30% maintenance costs

-30% airframe maintenenace
Interchangable engines easier

to maintain
Downtime because of
Serviceability (20%)
safety issues
-
Use of 25% composites
Downtime because of saftey

issues
Use of >50% composites
High quality standards
High quality standards
Durability (15%)
-
Severall safety issues with

fuel
leaks and battery fires
July 2013 787 fuselage fire

in Heathrow, London, UK
Engine blowout
Quantas in 2010
Order Qualifiers

Page 25
9. Level of Alignment - Orders and Deliveries
200 200 200 200 200 200 200 200 200 201 201 201 201
Total
1
2
3
4
5
6
7
8
9
0
1
2
3
Orders 78 0 34 10 10 24 33 9
4 32 19 9
0
262
Deliveri
0
0
0
0
0
0
1 12 10 18 26 30 9
106
es
First time in 2011 delivered according to schedule / As of July 2012

three aircraft per month
Selling price as of 2013: $403 Mn
Production cost will be equal to selling price at 2015
200 200 200 200 200 200 201 201 201 201
4
5
6
7
8
9
0
1
2
3
Orders 56 235 157 369 93 -59 -4 13 -12 82
Deliver
0
0
0
0
0
0
0
3
46 17
ies
Total
930
66
Up until 2009 announced 5 consecutive delays / 787 was first

certified in August 2011
Selling price as of 2012: $206.8 Mn (787-8) and $243.6 Mn

(787-9)
Production cost at 2013: $200 Mn

Page 26
10. Future Challenges
Internal:
o
Safety Standards
As of late, there have been noticeable lapse in the enforcement of
safety standards. Which reduces brand reputation and customer
confidence
Supply Chain Management Outsourced

In the future, the efficiency of outsourcing the various parts of a
these aircraft may no longer be as cost efficient . The cause might
be the increasing competitiveness of external manufacturers due to
the advent of globalization and changes within the global economic
landscape
Internally, domestic sentiment may compel Airbus/Boeing to
produce greater manufacturing capabilities within Europe/the U.S.
in direct contrasts to the current manufacturing trend.
Vanishing Technological Advance

Other manufacturers may catch up to the technological advances
that Boeing or Airbus currently provide to end-customers, thereby
reducing their competitive strengths within the market. They must
keep the internal progress of R&D.

Page 27
External:
o
Tight margins and capital intense projects

negatively affect the economic performance of Boeing.
Boeing relies more on market efficiencies to translate its
value propositions
Fuel price
Although fuel prices are purchases on margins, the cost
of fuel has increased in volatility
CO2 quota reduction

Rising awareness in regards to environment fronts
requires Boeing to allocate significant R&D to comply
with increased standards of environmentally friendly
aircraft
Comac, Chinese Aerospace

Manufacturer
Politics:
Cut budgets to defense purchases threaten the jobs
markets of local communities where Boeing offices are
located.
New Competition:
New market entrants may vie to compete with Boeing
on a quality and technological front while reducing
prices to increase its viability in the market.
CO2 emission reduction initiatives will gain
greater public support.

Page 28
Competing in Commercial Aviation for

the Airlines
Case in point : Airbus A380 vs. Boeing
787 Operations and SCM
Thank You!!
GMBA+
GMBA+ BLENDED
BLENDED 22
GLOBAL
GLOBAL OPERATIONS
OPERATIONS AND
AND SUPPLY
SUPPLY
CHAIN
CHAIN MANAGEMENT
MANAGEMENT
PROFESSOR
PROFESSOR
LUIS
LUIS EDUARDO
EDUARDO SOLS
SOLS GALVN
GALVN
TEAM
TEAM CLARO!
CLARO!
CHAVES
CHAVES
GUILLERMO,
GUILLERMO,
GOMME,
GOMME,
JOHNSON,
JOHNSON,
LANGKAMMER,
LANGKAMMER,
LPEZ
LPEZ RIVERA,
RIVERA,
PAPADELLIS
PAPADELLIS
Main Sources
1.
Industry Context and Competitive Environment

http://www.srr.com/article/aerospace-industry-overview-and-update-fall-2011
http://travel.cnn.com/explorations/life/boeing-747-8-and-airbus-a380-death-match-152563
http://www.boeing.com/boeing/commercial/cmo/
2.
Key Corporate Objectives

Airbus vs. Boeing: Strategic Management Report - Sacha Mayer, 2007
3.
Marketing Strategies
http://www.airbus.com/aircraftfamilies/passengeraircraft/a380family/
http://www.boeing.com/boeing/commercial/787family/index.page
4.
Order Qualifiers and Order Winners
5.
Main Transformation Process

Boeing: The Dreamliner Quiet Revolution, Smithsonian Air & Space, July 2012 http://
www.airspacemag.com/flight-today/The-Quiet-Revolution.html?c=y&page=1
Airbus: http://www.airbus.com/innovation/
6.
Major Infrastructure Dimensions of the Operation Strategies

The Airbusway http://www.airbus.com/work/why-join-airbus/our-culture/
7.
Companies Culture and Values

Boeing: http://www.boeing.com/boeing/aboutus/culture/#vision
Airbus: http://www.airbus.com/company/people-culture/company-culture/
8.
Major Capabilities Developed
9.
Level of Alignment

http://www.boeing.com/aboutus/environment/environmental_report_09/carbon-dioxide-emissions.html , Boeing,Carbon Dioxide
Emissions
http://www.eci.ox.ac.uk/research/energy/downloads/jardine09-carboninflights.pdf, Calculating The Carbon Dioxide Emissions Of
Flights
http://www.faa.gov/news/updates/media/2013_02_22_10_00_10.pdf, Official U.S. Government Notice of Budget Cuts

Airbus vs Boeing: Competing in Commercial Aviation

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TEAM

Competing in Commercial Aviation for

1. Industry Context and Competitive Environment

Headquarters: Toulouse, France

Business areas: Manufacturer of commercial jetliners

Business areas: Aerospace and defence

Global Reach Provides products and support services

Global Reach: Fully-owned subsidiaries in

Supply Chain: Hundreds of thousands more skilled

Supply Chain: Has a network of 1,500

2012 Net income: $3.9 billion

2012 Net income: $1.59 billion (parent

2012 net orders: 1203

2012 net orders: 833

1. Industry Context and Competitive Environment

Strong Prospects for

Fuel Price Driving innovation

1. Industry Context and Competitive Environment

Rivalry among existing

Bargaining power of suppliers

Threat of new entrants

Bargaining power of buyers

1. Industry Context and Competitive Environment

Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer,

2. Key Corporate Objectives - Airbus

Airbus Industrie Headquarters:

Long Term Goals:

Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer,

2. Key Corporate Objectives - Boeing

Objective: Attain the following Core Competencies:

Customer Knowledge and Focus

Team Claro! Chaves Guillermo, Gomme, Johnson, Langkammer,

3. Marketing Strategies - Airbus

Airbus expects high traffic between

Large airports with constraints of

A380 maximizes yields per slot for

Delivers efficiency through economies

Large airplane offers economies of

New seat 840 seat configuration cuts

Most luxurious cabins in the industry;

3. Marketing Strategies - Boeing

The plane travels directly to a

New market segment: long-haul aircraft

Secondary airports with no facility to

Make it simple and cost-effective for

Delivers economy through technological

B787 Dreamliner competes in the mid-long

Fuel-efficient twin engines

Lightweight composite materials

Availability of different cabins for different

4. Order Qualifiers and Order Winners

Dependability (Delivery Time)

5. Main Transformation Process - Boeing

From integrating separate

Boeing Suppliers, from four continents to Everett, WA, USA

Components had to be built from

From manufacturing for

5. Main Transformation Process - Airbus

A380 Parts, on their way to Toulouse, France

Construction of Port facilities

Control / System redundancy

Active load alleviation