Ready to Take Off (A): The Global Large Civil Aircraft Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ready to Take Off (A): The Global Large Civil Aircraft Industry
A capital-intensive industry that requires sophisticated high technology and enormous economies of scale, the global large civil aircraft industry allows only a few profitable players and has been dominated by the duopoly of The Boeing Company ("Boeing") and Airbus S.A.S. ("Airbus"). Although outsourcing has been evident since the 1970s, since the 1990s, Boeing and Airbus have become increasingly reliant on foreign suppliers, especially those in newly emerging markets, such as China. Industrial offset arrangements allow the two giants to contract their production processes, and increasingly the actual design and engineering work, to Chinese suppliers in exchange for guaranteed sales of the finished aircraft to Chinese airlines. This case provides a brief introduction to the global large civil aircraft industry. It can be used to teach courses with a focus on economics, business management, production and operational management.
Swot Analysis of "Ready to Take Off (A): The Global Large Civil Aircraft Industry" written by Dean Xu, Isabella Chan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aircraft Airbus facing as an external strategic factors. Some of the topics covered in Ready to Take Off (A): The Global Large Civil Aircraft Industry case study are - Strategic Management Strategies, Operations management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Ready to Take Off (A): The Global Large Civil Aircraft Industry casestudy better are - – increasing government debt because of Covid-19 spendings, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Ready to Take Off (A): The Global Large Civil Aircraft Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ready to Take Off (A): The Global Large Civil Aircraft Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aircraft Airbus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aircraft Airbus operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Ready to Take Off (A): The Global Large Civil Aircraft Industry can be done for the following purposes –
1. Strategic planning using facts provided in Ready to Take Off (A): The Global Large Civil Aircraft Industry case study
2. Improving business portfolio management of Aircraft Airbus
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aircraft Airbus
Strengths Ready to Take Off (A): The Global Large Civil Aircraft Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aircraft Airbus in Ready to Take Off (A): The Global Large Civil Aircraft Industry Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Ready to Take Off (A): The Global Large Civil Aircraft Industry firm has clearly differentiated products in the market place. This has enabled Aircraft Airbus to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Aircraft Airbus to invest into research and development (R&D) and innovation.
Learning organization
- Aircraft Airbus is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Aircraft Airbus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ready to Take Off (A): The Global Large Civil Aircraft Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Aircraft Airbus is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Aircraft Airbus has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aircraft Airbus has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Aircraft Airbus are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Aircraft Airbus
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Aircraft Airbus does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Aircraft Airbus digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aircraft Airbus has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Effective Research and Development (R&D)
– Aircraft Airbus has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Ready to Take Off (A): The Global Large Civil Aircraft Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Aircraft Airbus is present in almost all the verticals within the industry. This has provided firm in Ready to Take Off (A): The Global Large Civil Aircraft Industry case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Leadership & Managing People field
– Aircraft Airbus is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Aircraft Airbus in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Aircraft Airbus is one of the leading recruiters in the industry. Managers in the Ready to Take Off (A): The Global Large Civil Aircraft Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Aircraft Airbus in the sector have low bargaining power. Ready to Take Off (A): The Global Large Civil Aircraft Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aircraft Airbus to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Ready to Take Off (A): The Global Large Civil Aircraft Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ready to Take Off (A): The Global Large Civil Aircraft Industry are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Aircraft Airbus supply chain. Even after few cautionary changes mentioned in the HBR case study - Ready to Take Off (A): The Global Large Civil Aircraft Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aircraft Airbus vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ready to Take Off (A): The Global Large Civil Aircraft Industry, it seems that the employees of Aircraft Airbus don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Aircraft Airbus has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Aircraft Airbus even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ready to Take Off (A): The Global Large Civil Aircraft Industry, is just above the industry average. Aircraft Airbus needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Skills based hiring
– The stress on hiring functional specialists at Aircraft Airbus has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to strategic competitive environment developments
– As Ready to Take Off (A): The Global Large Civil Aircraft Industry HBR case study mentions - Aircraft Airbus takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Aircraft Airbus is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Aircraft Airbus needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aircraft Airbus to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Aircraft Airbus has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Ready to Take Off (A): The Global Large Civil Aircraft Industry should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ready to Take Off (A): The Global Large Civil Aircraft Industry HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Aircraft Airbus has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Aircraft Airbus has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Aircraft Airbus products
– To increase the profitability and margins on the products, Aircraft Airbus needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Ready to Take Off (A): The Global Large Civil Aircraft Industry | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Ready to Take Off (A): The Global Large Civil Aircraft Industry are -
Better consumer reach
– The expansion of the 5G network will help Aircraft Airbus to increase its market reach. Aircraft Airbus will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aircraft Airbus in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aircraft Airbus can use these opportunities to build new business models that can help the communities that Aircraft Airbus operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Aircraft Airbus has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Aircraft Airbus in the consumer business. Now Aircraft Airbus can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Aircraft Airbus can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Aircraft Airbus can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Creating value in data economy
– The success of analytics program of Aircraft Airbus has opened avenues for new revenue streams for the organization in the industry. This can help Aircraft Airbus to build a more holistic ecosystem as suggested in the Ready to Take Off (A): The Global Large Civil Aircraft Industry case study. Aircraft Airbus can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aircraft Airbus to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Aircraft Airbus to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aircraft Airbus is facing challenges because of the dominance of functional experts in the organization. Ready to Take Off (A): The Global Large Civil Aircraft Industry case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Aircraft Airbus can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Aircraft Airbus can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ready to Take Off (A): The Global Large Civil Aircraft Industry suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Aircraft Airbus can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aircraft Airbus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Ready to Take Off (A): The Global Large Civil Aircraft Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ready to Take Off (A): The Global Large Civil Aircraft Industry are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ready to Take Off (A): The Global Large Civil Aircraft Industry, Aircraft Airbus may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Technology acceleration in Forth Industrial Revolution
– Aircraft Airbus has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Aircraft Airbus needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Aircraft Airbus.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Aircraft Airbus will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Aircraft Airbus demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aircraft Airbus can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Ready to Take Off (A): The Global Large Civil Aircraft Industry .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Aircraft Airbus with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Aircraft Airbus is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Aircraft Airbus high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Stagnating economy with rate increase
– Aircraft Airbus can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Aircraft Airbus needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Ready to Take Off (A): The Global Large Civil Aircraft Industry Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Ready to Take Off (A): The Global Large Civil Aircraft Industry needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Ready to Take Off (A): The Global Large Civil Aircraft Industry is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Ready to Take Off (A): The Global Large Civil Aircraft Industry is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Ready to Take Off (A): The Global Large Civil Aircraft Industry is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Aircraft Airbus needs to make to build a sustainable competitive advantage.