Airbus: Strategy and Statement Analysis

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Table of Contents

Introduction of Firm
Overview of Firm’s Competitive Advantage
Problem Statement
Decision and Support
Action Plan
References

Introduction of Firm

Founded in the 1960s, Airbus has become one of the leading competitors in the aircraft manufacturing industry. The high demand for aircrafts in the 1970s triggered a new model that could fulfill the needs of different clients. In 2000, the corporation embarked on a new mission aimed at producing the A380. This discussion gives a detailed analysis of this company and proposes the best action plan.

Overview of Firm’s Competitive Advantage

The presented case outlines various attributes that make Airbus competitive. Firstly, it has a single owner that streamlines decision-making and problem-solving approaches. Secondly, it produces large aircrafts that deliver efficiency, speed, and reliability. Thirdly, it offers both leasing and buying options to different airlines (Luna, Addepalli, Salonitis, & Makatsoris, 2018). Finally, its competent employees and assets will continue to transform organizational performance.

Problem Statement

Airbus is currently facing competition from emerging companies that produce fuel efficient and quieter turboprops and jets.

Alternative Solutions

Option 1: Analysis

The above issue requires an evidence-based strategy to ensure that Airbus achieves its potential. The first option is to consider the concept of diversification and produce efficient turboprops and jets. This approach will meet the needs of emerging clients (Pitt & Koufopoulos, 2012). It presents these advantages and disadvantages:

Pros: The option will increase revenues and minimize competition (Luna et al., 2018).
Cons: It requires additional resources.

Option 2: Analysis

The second option revolves around the power of continuous research & development (R&D). Many corporations in this industry are manufacturing quieter, more efficient, and reliable crafts (Morsi et al., 2018). Airbus needs to consider these changes and improve its operational model.

Pros: This solution is achievable due to the presence of adequate resources (Morsi et al., 2018).
Cons: This option supports the current model which is not effective.

Decision and Support

The above discussion has identified industrial rivalry as a major threat for this organization. The best decision revolves around embracing the concept of diversification to introduce additional aircrafts that resonate with the changing demands of different customers. Unfortunately, this company will incur numerous expenses if positive results are to be recorded. Eriksson and Steenhuis (2015) indicate that companies that want to remain successful in this industry should focus on every new change or development. They should engage in R&D to streamline operations, address challenges, and improve stakeholders’ experiences. This option appears to be less risky and more profitable.

Action Plan

The recommended solution requires a powerful action plan if it is to deliver positive results. Kurt Lewin’s change theory offers the best framework for implementing these suggestions. The major steps will include freezing, changing, and refreezing. The first one will be used to sensitize all stakeholders about the proposed idea. The next one is making the option a reality in this organization. Finally, the practices will become part of the company immediately. The decision is cost effective and easy to implement since the required resources are available (Luna et al., 2018). This action plan can be executed within two years.

This period will make it possible for Airbus to acquire enough resources and reduce obstacles. In terms of cost, the initiative will require around 20 billion US dollars. The potential negative consequence is the emergence of opposition from stakeholders throughout the implementation period. If this action fails, Airbus can consider a new contingency plan to promote diversification. It will begin by introducing evidence-based procedures and R&D practices. It will then produce additional aircrafts depending on clients’ needs. This second option has the potential to make Airbus successful.

References

Eriksson, S., & Steenhuis, H. (Eds.). (2015). The global commercial aviation industry. New York, NY: Routledge.

Luna, J., Addepalli, S., Salonitis, K., & Makatsoris, H. (2018). Assessment of an emerging aerospace manufacturing cluster and its dependence on the mature global clusters. Procedia Manufacturing, 19, 26-33. Web.

Morsi, O. E., Whealan-George, K. A., & Clevenger, A. D. (2018). Assessment and comparison of aviation manufacturing industries throughout Mexico and Brazil. International Journal of Aviation, Aeronautics, and Aerospace, 5(1), 1-18. Web.

Pitt, M. R., & Koufopoulos, D. (2012). Essential of strategic management. Thousand Oaks, CA: Sage.

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