Swot Analysis of "Airbus A3XX: Developing the World's Largest Commercial Jet (B)" written by Benjamin C. Esty, Michael Kane includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that A3xx Airbus facing as an external strategic factors. Some of the topics covered in Airbus A3XX: Developing the World's Largest Commercial Jet (B) case study are - Strategic Management Strategies, Competitive strategy, Costs, Financial analysis, Government, Marketing, Product development, Project management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Airbus A3XX: Developing the World's Largest Commercial Jet (B) casestudy better are - – supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, wage bills are increasing, geopolitical disruptions,
increasing energy prices, increasing commodity prices, etc
Introduction to SWOT Analysis of Airbus A3XX: Developing the World's Largest Commercial Jet (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Airbus A3XX: Developing the World's Largest Commercial Jet (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the A3xx Airbus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which A3xx 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 Airbus A3XX: Developing the World's Largest Commercial Jet (B) can be done for the following purposes –
1. Strategic planning using facts provided in Airbus A3XX: Developing the World's Largest Commercial Jet (B) case study
2. Improving business portfolio management of A3xx Airbus
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of A3xx Airbus
Strengths Airbus A3XX: Developing the World's Largest Commercial Jet (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of A3xx Airbus in Airbus A3XX: Developing the World's Largest Commercial Jet (B) Harvard Business Review case study are -
Training and development
– A3xx Airbus has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Airbus A3XX: Developing the World's Largest Commercial Jet (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that A3xx 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.
Cross disciplinary teams
– Horizontal connected teams at the A3xx 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For A3xx Airbus digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. A3xx 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Airbus A3XX: Developing the World's Largest Commercial Jet (B) firm has clearly differentiated products in the market place. This has enabled A3xx Airbus to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped A3xx Airbus to invest into research and development (R&D) and innovation.
Diverse revenue streams
– A3xx Airbus is present in almost all the verticals within the industry. This has provided firm in Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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.
Learning organization
- A3xx 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 A3xx Airbus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Airbus A3XX: Developing the World's Largest Commercial Jet (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– A3xx Airbus has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. A3xx 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.
Ability to recruit top talent
– A3xx Airbus is one of the leading recruiters in the industry. Managers in the Airbus A3XX: Developing the World's Largest Commercial Jet (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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.
Low bargaining power of suppliers
– Suppliers of A3xx Airbus in the sector have low bargaining power. Airbus A3XX: Developing the World's Largest Commercial Jet (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps A3xx Airbus to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– A3xx 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 Airbus A3XX: Developing the World's Largest Commercial Jet (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Airbus A3XX: Developing the World's Largest Commercial Jet (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Airbus A3XX: Developing the World's Largest Commercial Jet (B) are -
Skills based hiring
– The stress on hiring functional specialists at A3xx 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Airbus A3XX: Developing the World's Largest Commercial Jet (B), it seems that the employees of A3xx 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.
Increasing silos among functional specialists
– The organizational structure of A3xx Airbus is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. A3xx Airbus needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help A3xx Airbus to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of A3xx Airbus, firm in the HBR case study Airbus A3XX: Developing the World's Largest Commercial Jet (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
A3xx 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 to strategic competitive environment developments
– As Airbus A3XX: Developing the World's Largest Commercial Jet (B) HBR case study mentions - A3xx 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.
No frontier risks strategy
– After analyzing the HBR case study Airbus A3XX: Developing the World's Largest Commercial Jet (B), it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Airbus A3XX: Developing the World's Largest Commercial Jet (B), is just above the industry average. A3xx 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.
Aligning sales with marketing
– It come across in the case study Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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 Airbus A3XX: Developing the World's Largest Commercial Jet (B) can leverage the sales team experience to cultivate customer relationships as A3xx Airbus is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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 A3xx Airbus 's lucrative customers.
Interest costs
– Compare to the competition, A3xx 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.
Opportunities Airbus A3XX: Developing the World's Largest Commercial Jet (B) | 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 Airbus A3XX: Developing the World's Largest Commercial Jet (B) are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, A3xx Airbus can use these opportunities to build new business models that can help the communities that A3xx Airbus operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, A3xx Airbus is facing challenges because of the dominance of functional experts in the organization. Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. A3xx 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. A3xx 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, A3xx 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.
Developing new processes and practices
– A3xx Airbus can develop new processes and procedures in Finance & Accounting 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.
Leveraging digital technologies
– A3xx Airbus 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects A3xx Airbus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for A3xx 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 A3xx Airbus to hire the very best people irrespective of their geographical location.
Buying journey improvements
– A3xx Airbus can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, A3xx 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, Airbus A3XX: Developing the World's Largest Commercial Jet (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for A3xx 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 Finance & Accounting segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. A3xx Airbus can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 A3xx 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.
Threats Airbus A3XX: Developing the World's Largest Commercial Jet (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Airbus A3XX: Developing the World's Largest Commercial Jet (B) are -
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. A3xx Airbus can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– A3xx 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 Finance & Accounting industry regulations.
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.
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 A3xx 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. A3xx Airbus needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. A3xx 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.
Technology acceleration in Forth Industrial Revolution
– A3xx Airbus has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, A3xx Airbus needs to keep up with the evolution of technology in the Finance & Accounting 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.
Consumer confidence and its impact on A3xx 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.
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.
Increasing wage structure of A3xx 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 A3xx Airbus.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Airbus A3XX: Developing the World's Largest Commercial Jet (B), A3xx 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 Finance & Accounting .
Shortening product life cycle
– it is one of the major threat that A3xx Airbus is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents A3xx 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 Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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 Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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 Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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 Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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 Airbus A3XX: Developing the World's Largest Commercial Jet (B) 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 A3xx Airbus needs to make to build a sustainable competitive advantage.
