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 - – geopolitical disruptions, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google,
increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
Low bargaining power of suppliers
– Suppliers of A350 Xwb in the sector have low bargaining power. A350 XWB: Airbus' answer to Boeing's Dreamliner has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps A350 Xwb to manage not only supply disruptions but also source products at highly competitive prices.
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.
Ability to recruit top talent
– A350 Xwb is one of the leading recruiters in the industry. Managers in the A350 XWB: Airbus' answer to Boeing's Dreamliner are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– A350 Xwb 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 A350 XWB: Airbus' answer to Boeing's Dreamliner - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Organizational Resilience of A350 Xwb
– The covid-19 pandemic has put organizational resilience at the centre of everthing that A350 Xwb does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For A350 Xwb digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. A350 Xwb 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.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– A350 XWB: Airbus' answer to Boeing's Dreamliner firm has clearly differentiated products in the market place. This has enabled A350 Xwb to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped A350 Xwb to invest into research and development (R&D) and innovation.
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.
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.
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 -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study A350 XWB: Airbus' answer to Boeing's Dreamliner, it seems that the employees of A350 Xwb 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.
Low market penetration in new markets
– Outside its home market of A350 Xwb, firm in the HBR case study A350 XWB: Airbus' answer to Boeing's Dreamliner needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, A350 Xwb is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study A350 XWB: Airbus' answer to Boeing's Dreamliner can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– A350 Xwb has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study A350 XWB: Airbus' answer to Boeing's Dreamliner has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract A350 Xwb 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, A350 Xwb 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. A350 Xwb 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.
Aligning sales with marketing
– It come across in the case study A350 XWB: Airbus' answer to Boeing's Dreamliner 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 A350 XWB: Airbus' answer to Boeing's Dreamliner can leverage the sales team experience to cultivate customer relationships as A350 Xwb is planning to shift buying processes online.
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.
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.
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 -
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. A350 Xwb can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, A350 Xwb 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, A350 XWB: Airbus' answer to Boeing's Dreamliner, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– A350 Xwb can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
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.
Using analytics as competitive advantage
– A350 Xwb 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 A350 XWB: Airbus' answer to Boeing's Dreamliner - to build a competitive advantage using analytics. The analytics driven competitive advantage can help A350 Xwb to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Developing new processes and practices
– A350 Xwb can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing 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 A350 Xwb in the consumer business. Now A350 Xwb can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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 -
Consumer confidence and its impact on A350 Xwb 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.
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.
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.
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 dependence on third party suppliers
– A350 Xwb 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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, A350 Xwb 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 A350 XWB: Airbus' answer to Boeing's Dreamliner .
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 .
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.
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.
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.
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.