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 transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing government debt because of Covid-19 spendings, geopolitical disruptions, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
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.
High switching costs
– The high switching costs that Aircraft Airbus has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
Highly skilled collaborators
– Aircraft Airbus has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Ready to Take Off (A): The Global Large Civil Aircraft Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Superior customer experience
– The customer experience strategy of Aircraft Airbus in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
Innovation driven organization
– Aircraft Airbus is one of the most innovative firm in sector. Manager in Ready to Take Off (A): The Global Large Civil Aircraft Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Aircraft Airbus is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Dean Xu, Isabella Chan can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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 -
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ready to Take Off (A): The Global Large Civil Aircraft Industry, in the dynamic environment Aircraft Airbus has struggled to respond to the nimble upstart competition. Aircraft Airbus has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
Aligning sales with marketing
– It come across in the case study Ready to Take Off (A): The Global Large Civil Aircraft Industry that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Ready to Take Off (A): The Global Large Civil Aircraft Industry can leverage the sales team experience to cultivate customer relationships as Aircraft Airbus is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Aircraft Airbus needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High cash cycle compare to competitors
Aircraft Airbus has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
Interest costs
– Compare to the competition, Aircraft Airbus has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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 -
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Aircraft Airbus can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Manufacturing automation
– Aircraft Airbus can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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.
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.
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.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Aircraft Airbus to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Aircraft Airbus has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Ready to Take Off (A): The Global Large Civil Aircraft Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aircraft Airbus to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aircraft Airbus can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Ready to Take Off (A): The Global Large Civil Aircraft Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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 -
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.
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.
Environmental challenges
– Aircraft Airbus needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Aircraft Airbus can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Aircraft Airbus can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Aircraft Airbus business can come under increasing regulations regarding data privacy, data security, etc.
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.
Increasing wage structure of Aircraft Airbus
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Aircraft Airbus.
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.
Regulatory challenges
– Aircraft Airbus needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Aircraft Airbus in the Leadership & Managing People sector and impact the bottomline of the organization.
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.
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.
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.