Case Study Description of A350 XWB: Airbus' answer to Boeing's Dreamliner
The case describes the strategic moves of Airbus in the twin-aisle-twin segment following Boeing's announcement of the launch of its 787 Dreamliner. Airbus's clients initially reacted negatively to the strategic response by criticizing the design. By the end of 2006, however, there were positive signs that the new design, the A350 XWB, would be able to find its market. The formal industrial launch had not yet been made and the A350 management office had been asked to prepare a series of proposals to the board of EADS regarding the next steps.
Swot Analysis of "A350 XWB: Airbus' answer to Boeing's Dreamliner" written by Francis Bidault, Buelent Goegduen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that A350 Xwb facing as an external strategic factors. Some of the topics covered in A350 XWB: Airbus' answer to Boeing's Dreamliner case study are - Strategic Management Strategies, Innovation, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the A350 XWB: Airbus' answer to Boeing's Dreamliner casestudy better are - – increasing transportation and logistics costs, increasing energy prices, there is backlash against globalization, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, etc
Introduction to SWOT Analysis of A350 XWB: Airbus' answer to Boeing's Dreamliner
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in A350 XWB: Airbus' answer to Boeing's Dreamliner case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the A350 Xwb, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which A350 Xwb 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 A350 XWB: Airbus' answer to Boeing's Dreamliner can be done for the following purposes –
1. Strategic planning using facts provided in A350 XWB: Airbus' answer to Boeing's Dreamliner case study
2. Improving business portfolio management of A350 Xwb
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of A350 Xwb
Strengths A350 XWB: Airbus' answer to Boeing's Dreamliner | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of A350 Xwb in A350 XWB: Airbus' answer to Boeing's Dreamliner Harvard Business Review case study are -
High switching costs
– The high switching costs that A350 Xwb 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.
Strong track record of project management
– A350 Xwb is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Strategy & Execution field
– A350 Xwb 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 A350 Xwb in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the A350 XWB: Airbus' answer to Boeing's Dreamliner Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– A350 Xwb has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. A350 Xwb 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.
Highly skilled collaborators
– A350 Xwb 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 A350 XWB: Airbus' answer to Boeing's Dreamliner HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- A350 Xwb 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 A350 Xwb is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in A350 XWB: Airbus' answer to Boeing's Dreamliner Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– A350 Xwb has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled A350 Xwb to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– A350 Xwb is present in almost all the verticals within the industry. This has provided firm in A350 XWB: Airbus' answer to Boeing's Dreamliner 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.
Cross disciplinary teams
– Horizontal connected teams at the A350 Xwb 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.
Analytics focus
– A350 Xwb 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 Francis Bidault, Buelent Goegduen 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.
Innovation driven organization
– A350 Xwb is one of the most innovative firm in sector. Manager in A350 XWB: Airbus' answer to Boeing's Dreamliner Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses A350 XWB: Airbus' answer to Boeing's Dreamliner | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of A350 XWB: Airbus' answer to Boeing's Dreamliner are -
Skills based hiring
– The stress on hiring functional specialists at A350 Xwb 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.
Products dominated business model
– Even though A350 Xwb 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 - A350 XWB: Airbus' answer to Boeing's Dreamliner should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Francis Bidault, Buelent Goegduen suggests that, A350 Xwb is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Capital Spending Reduction
– Even during the low interest decade, A350 Xwb 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study A350 XWB: Airbus' answer to Boeing's Dreamliner, in the dynamic environment A350 Xwb has struggled to respond to the nimble upstart competition. A350 Xwb has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of A350 Xwb products
– To increase the profitability and margins on the products, A350 Xwb needs to provide more differentiated products than what it is currently offering in the marketplace.
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 A350 Xwb supply chain. Even after few cautionary changes mentioned in the HBR case study - A350 XWB: Airbus' answer to Boeing's Dreamliner, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left A350 Xwb 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 A350 XWB: Airbus' answer to Boeing's Dreamliner 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 A350 Xwb has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study A350 XWB: Airbus' answer to Boeing's Dreamliner, is just above the industry average. A350 Xwb 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.
Slow to strategic competitive environment developments
– As A350 XWB: Airbus' answer to Boeing's Dreamliner HBR case study mentions - A350 Xwb 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 A350 Xwb is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. A350 Xwb needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help A350 Xwb to focus more on services rather than just following the product oriented approach.
Opportunities A350 XWB: Airbus' answer to Boeing's Dreamliner | 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 A350 XWB: Airbus' answer to Boeing's Dreamliner are -
Leveraging digital technologies
– A350 Xwb can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Loyalty marketing
– A350 Xwb 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, A350 Xwb 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. A350 Xwb can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for A350 Xwb to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Building a culture of innovation
– managers at A350 Xwb can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for A350 Xwb in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help A350 Xwb to increase its market reach. A350 Xwb 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.
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 A350 Xwb in the consumer business. Now A350 Xwb can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for A350 Xwb 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 A350 Xwb to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of A350 Xwb has opened avenues for new revenue streams for the organization in the industry. This can help A350 Xwb to build a more holistic ecosystem as suggested in the A350 XWB: Airbus' answer to Boeing's Dreamliner case study. A350 Xwb can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, A350 Xwb can use these opportunities to build new business models that can help the communities that A350 Xwb operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects A350 Xwb can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats A350 XWB: Airbus' answer to Boeing's Dreamliner External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study A350 XWB: Airbus' answer to Boeing's Dreamliner are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for A350 Xwb in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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. A350 Xwb 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.
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. A350 Xwb needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. A350 Xwb can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 A350 Xwb.
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.
Regulatory challenges
– A350 Xwb 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 Strategy & Execution industry regulations.
Stagnating economy with rate increase
– A350 Xwb 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents A350 Xwb 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 A350 Xwb is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– A350 Xwb has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, A350 Xwb needs to keep up with the evolution of technology in the Strategy & Execution 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study A350 XWB: Airbus' answer to Boeing's Dreamliner, A350 Xwb may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Environmental challenges
– A350 Xwb 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. A350 Xwb can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of A350 XWB: Airbus' answer to Boeing's Dreamliner 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 A350 XWB: Airbus' answer to Boeing's Dreamliner 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 A350 XWB: Airbus' answer to Boeing's Dreamliner 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 A350 XWB: Airbus' answer to Boeing's Dreamliner 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 A350 XWB: Airbus' answer to Boeing's Dreamliner 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 A350 Xwb needs to make to build a sustainable competitive advantage.
