Boeing Case
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Introduction
The purpose of this report is to provide a Strategic Management Report with detailed strategic analyses of the dominant civil aircraft manufacturers Airbus and Boeing. The discussion main part of this report is separated into internal and external analyses, which are reasoned in greater detail and supported with reasonable graphs and tables in the attached Appendices. Finally, conclusions are drawn as to which is the more strategic savvy and which company has the more sustainable enterprise; and there is a recommendation given in which company a potential investor should rather invest in.
About Airbus
Airbus is an aircraft manufacturing subsidiary of European Aeronautic Defense and Space Company. The major products of Airbus are fly-by-wire airliner, the Airbus A320 and the worlds largest airliner, the A380. The business of Airbus include manufacturing of commercial aircraft, civil and military helicopters, commercial space launch vehicles, missiles, military aircraft, satellites, defense systems and defense electronics and rendering of services related to these activities.
About Boeing
Boeing is the largest aerospace company of the world which is into the manufacturing of airplanes of some of the most prestigious security systems in the world. The product line of Boeing include military aircraft, satellites, weapons, electronic and defense systems, launch systems, advanced information and communication systems. Boeing has its corporate office in the United States of America and customers across 150 nations of the world. The customers of Boeing are the countries that are into alliance with the US government.
Airbus vs. Boeing History
Both the companies have dominated the aerospace industry leaving little scope for the competitors to enter and sustain in the market that has been very competitive. Both the companies have come up as the leaders in the market after a series of mergers and acquisitions. Aerospace began as the consortium from Europe and The Boeing came as a competitor and a market leader after taking over the McDonnell Douglas in 1997. Further to this Boeing merged with Lockheed Martin and Convair in the United States and British Aerospace, whereas Airbus merged with Dornier and Fokker in Europe. These companies moved out of the market because of the huge competition and the dependency of the profits on sales volume. In this report the rivalry between these two giant of the aeronautic industry has been studied based on the financial status of both organizations. In the last 10 years (2003-2012), Airbus has received 7,714 orders while delivering 4,503, and Boeing has received 7,312 orders while delivering 4,091. Competition is intense; each company regularly accuses the other of receiving unfair state aid from their respective governments. For the purpose of analysis, a detailed examination of the annual reports has been done and various financial ratios have been calculated for both organizations over the 3 year period 2010 -2012.
External Analysis
Key economics and business characteristics
The aircraft manufacturing industry is constantly growing, a global market and had a size of US$ 63 billion revenues in 2006 (EADS 2007a, p.III; Boeing 2006a, p.9). It is characterized by high entry barriers