Airbus vs. Boeing (A): Turbulent Skies SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Airbus vs. Boeing (A): Turbulent Skies
Presents the economic and political dimensions of competition in the commercial aircraft industry, as demonstrated by Airbus of Europe and Boeing of the United States.
Swot Analysis of "Airbus vs. Boeing (A): Turbulent Skies" written by Malcolm S. Salter, Irence L. Sinrich includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Airbus Boeing facing as an external strategic factors. Some of the topics covered in Airbus vs. Boeing (A): Turbulent Skies case study are - Strategic Management Strategies, Corporate governance, Government, International business and Global Business.
Some of the macro environment factors that can be used to understand the Airbus vs. Boeing (A): Turbulent Skies casestudy better are - – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices,
increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Airbus vs. Boeing (A): Turbulent Skies
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Airbus vs. Boeing (A): Turbulent Skies case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Airbus Boeing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Airbus Boeing 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 vs. Boeing (A): Turbulent Skies can be done for the following purposes –
1. Strategic planning using facts provided in Airbus vs. Boeing (A): Turbulent Skies case study
2. Improving business portfolio management of Airbus Boeing
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Airbus Boeing
Strengths Airbus vs. Boeing (A): Turbulent Skies | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Airbus Boeing in Airbus vs. Boeing (A): Turbulent Skies Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Airbus Boeing 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.
Learning organization
- Airbus Boeing 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 Airbus Boeing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Airbus vs. Boeing (A): Turbulent Skies Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Airbus Boeing is present in almost all the verticals within the industry. This has provided firm in Airbus vs. Boeing (A): Turbulent Skies 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.
Low bargaining power of suppliers
– Suppliers of Airbus Boeing in the sector have low bargaining power. Airbus vs. Boeing (A): Turbulent Skies has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Airbus Boeing to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Airbus Boeing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Airbus vs. Boeing (A): Turbulent Skies 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.
Effective Research and Development (R&D)
– Airbus Boeing 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 Airbus vs. Boeing (A): Turbulent Skies - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Airbus Boeing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Airbus vs. Boeing (A): Turbulent Skies 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 brand equity
– Airbus Boeing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Airbus Boeing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Airbus Boeing 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 vs. Boeing (A): Turbulent Skies HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Airbus Boeing 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 Malcolm S. Salter, Irence L. Sinrich 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.
Successful track record of launching new products
– Airbus Boeing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Airbus Boeing 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.
Weaknesses Airbus vs. Boeing (A): Turbulent Skies | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Airbus vs. Boeing (A): Turbulent Skies are -
Products dominated business model
– Even though Airbus Boeing 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 - Airbus vs. Boeing (A): Turbulent Skies 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, Malcolm S. Salter, Irence L. Sinrich suggests that, Airbus Boeing 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.
No frontier risks strategy
– After analyzing the HBR case study Airbus vs. Boeing (A): Turbulent Skies, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Capital Spending Reduction
– Even during the low interest decade, Airbus Boeing has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of Airbus Boeing products
– To increase the profitability and margins on the products, Airbus Boeing needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Airbus Boeing is dominated by functional specialists. It is not different from other players in the Global Business segment. Airbus Boeing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Airbus Boeing to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Airbus vs. Boeing (A): Turbulent Skies 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 vs. Boeing (A): Turbulent Skies can leverage the sales team experience to cultivate customer relationships as Airbus Boeing is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Airbus Boeing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Airbus vs. Boeing (A): Turbulent Skies can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Airbus vs. Boeing (A): Turbulent Skies HBR case study mentions - Airbus Boeing 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.
Skills based hiring
– The stress on hiring functional specialists at Airbus Boeing 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Airbus vs. Boeing (A): Turbulent Skies 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 Airbus Boeing has relatively successful track record of launching new products.
Opportunities Airbus vs. Boeing (A): Turbulent Skies | 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 vs. Boeing (A): Turbulent Skies are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Airbus Boeing 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 Airbus Boeing to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Airbus Boeing 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.
Manufacturing automation
– Airbus Boeing can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Better consumer reach
– The expansion of the 5G network will help Airbus Boeing to increase its market reach. Airbus Boeing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Airbus Boeing can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Airbus Boeing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Airbus vs. Boeing (A): Turbulent Skies 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.
Learning at scale
– Online learning technologies has now opened space for Airbus Boeing 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 Airbus Boeing 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 Global Business segment.
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 Airbus Boeing in the consumer business. Now Airbus Boeing can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Airbus Boeing 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 Airbus vs. Boeing (A): Turbulent Skies - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Airbus Boeing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Airbus Boeing can use these opportunities to build new business models that can help the communities that Airbus Boeing operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Airbus Boeing in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Airbus Boeing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Airbus vs. Boeing (A): Turbulent Skies External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Airbus vs. Boeing (A): Turbulent Skies are -
Regulatory challenges
– Airbus Boeing 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 Global Business industry regulations.
High dependence on third party suppliers
– Airbus Boeing 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.
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. Airbus Boeing needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 vs. Boeing (A): Turbulent Skies, Airbus Boeing may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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 Airbus Boeing.
Stagnating economy with rate increase
– Airbus Boeing 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.
Environmental challenges
– Airbus Boeing 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. Airbus Boeing can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Airbus Boeing in the Global Business sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Airbus Boeing in the Global Business industry. The Global Business 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.
Increasing wage structure of Airbus Boeing
– 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 Airbus Boeing.
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 Airbus Boeing business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Airbus Boeing demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Airbus Boeing 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 Airbus vs. Boeing (A): Turbulent Skies .
Weighted SWOT Analysis of Airbus vs. Boeing (A): Turbulent Skies 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 vs. Boeing (A): Turbulent Skies 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 vs. Boeing (A): Turbulent Skies 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 vs. Boeing (A): Turbulent Skies 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 vs. Boeing (A): Turbulent Skies 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 Airbus Boeing needs to make to build a sustainable competitive advantage.