Introduction

A journey from Infancy to Growth to Maturity

Historical Journey
Problems of 1970s
Strategies of Bernard Lathiere (1975 1985)
Strategies of Jean Pearson (1985 1998)
Strategies of Noel Forgeard (1998 2005)
Current Problems
Commercial Aircraft Industry
Enormous risks
1980s four companies (Boeing, McDonnell Douglas,
Airbus and Lockheed)
1990s Duopoly (Boeing and Airbus)
High Development costs (at least 300 to 400 planes)
Complex technology
Material innovations
Need of Government support
Deregulation (allowing smaller short distance
aircrafts)
Problems of 1970s
After WWII
Coming together of Governments
Development of A300
Decline of Sales (Total no of planes ordered for 4 years
20)
Establishing Consortium

France's
Aerospatiale
48% Germany's
Deutsche Airbus
48%
Spain's CASA
5%
Airbus in BCG Matrix - 1970
Cash Cows Dogs
Stars Question
Marks
Industry
Growth
Rate
Relative Market
Share
HIGH
LOW
LOW
Airbus
Infancy Bernard Lathiere (1975 1985)
Low Sales (only 1 in 1975)
Lathieres winning Strategy 3 Pillars
Family of Planes
Technological Leadership and Decentralized Production
Global Sales Strategy
Downside of Lathieres Strategies
Airbus in BCG Matrix - 1985
Cash Cows Dogs
Stars Question mark
Industry
Growth
Rate
Relative Market
Share
HIGH
LOW
LOW
Airbus
Growth Jean Pierson (1985 1998)
Internal Measures
Product Development
Cost Cutting (Lean Manufacturing)
External Measures
Sales Strategy (American Rivalry)
Subsidies (Bilateral agreement with Boeing)
37% Market Share
Airbus in BCG Matrix - 1998
Cash Cows Dogs
Stars Question mark
Industry
Growth
Rate
Relative Market
Share
HIGH
LOW
LOW
Airbus
Maturity Noel Forgeard (1998 2005)
Restructuring Airbus Ownership
Consortium to Company


Diversification in defense products
Globalization (Supply Chain)
Marketing Strategies (53% Market Share)
Favourable Financial Performance
France's
Aerospatiale
48%
Germany's
Deutsche Airbus
48%
Spain's CASA
4%
British Aerospace
20%
Airbus in BCG Matrix - 1998
Cash Cows Dogs
Stars Question mark
Industry
Growth
Rate
Relative Market
Share
HIGH
LOW
LOW
Airbus
Porters Five Forces Analysis
No close Substitutes
No supplier pressure

Competition
1. Boeings B-787 Dreamliner
2. Boeings case with the WTO
on Government Loans
Buyers power
Deregulation in market
Reduced demand for
Jumbo carriers
No new entrants
SWOT Analysis
Strengths
Technology Leadership
Lean Manufacturing (Global Supply Chain)
Ownership of company
Diverse products
Strategic Alliances
Strong Marketing support
Weakness
Lack of adaptability to changing environment (failure of
A350)

SWOT Analysis (Contd.)
Opportunities
Low cost mid sized planes segment
Threats
Stiff competition from Boeing (B787 Dreamliner)
Political Lobbying by Boeing (case in WTO and Airbus
Accord in US Govt)
High development cost
Decline in the value of Dollar
Decline in demand for Jumbo Carriers
Increase in Fuel Prices
Recession and decline in use of air travel
Decline in Competitive edge in Airbus
Questions to be answered
Should Airbus implement its past CEOs strategy in
order to increase its competitive position?
Should some earlier policies and strategies be revised
and modified?
Should new strategies be formed to tackle this
downturn and Boeings competition to stay in Star
position? If yes, what are they?

Thank You!!