Airbus: From Challenger to Leader
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Case Details:
Case Code : BSTR046
Case Length : 14 Pages
Period : 1997 - 2003
Organization : Airbus
Pub Date : 2003
Teaching Note : Available
Countries : USA
Industry : Aviation
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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EXCERPTS
Note on Aerospace Industry
The history of the aerospace industry dates back to 1917, when the US government built an aeronautics research center in Langley, Virginia. In the subsequent years, there was close private and public sector collaboration in the industry.
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The US government's investment in the aerospace industry was substantial, before and during the Second World War. After the Second World War, US manufacturers had distinct technological and financial advantages over their European competitors. Prior to the Second World War, Britain had been the leader in the aerospace industry. However, it failed to retain its leadership position due to the lack of a proper corporate and regulatory climate. The industry continued to be a high priority area for governments after the Second World War. Western governments invested in the industry to an increasing extent after the war. While military aviation received federal funding in the US, in Europe, governments provided funds for civil aviation...
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Flight To Success
In 1970, when Airbus Industrie was set up, the commercial aircraft market was totally dominated by US aircraft manufacturers led by Boeing. Boeing dominated the world market with its 747 jumbo jet family of aircraft.
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Although Airbus had great difficulty in breaking into the market initially, over the years, it managed to attract more and more customers.
Though some attributed Airbus' success to the subsidies it received from European governments, others felt that Airbus succeeded because of its production efficiency and innovative product development.
Innovative Product Development
In the 1970s, the aerospace industry was in a transition. The regulatory set-up in the American market restricted price wars among existing carriers and the entry of new carriers... |
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