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 - – supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, increasing commodity prices, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models,
wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
Organizational Resilience of Airbus Boeing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Airbus Boeing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
Sustainable margins compare to other players in Global Business industry
– Airbus vs. Boeing (A): Turbulent Skies firm has clearly differentiated products in the market place. This has enabled Airbus Boeing to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Airbus Boeing to invest into research and development (R&D) and innovation.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Airbus Boeing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Airbus Boeing 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.
Innovation driven organization
– Airbus Boeing is one of the most innovative firm in sector. Manager in Airbus vs. Boeing (A): Turbulent Skies Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Airbus Boeing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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 -
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Airbus vs. Boeing (A): Turbulent Skies, it seems that the employees of Airbus Boeing 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.
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.
High cash cycle compare to competitors
Airbus Boeing 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.
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.
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.
Need for greater diversity
– Airbus Boeing 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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Airbus vs. Boeing (A): Turbulent Skies, in the dynamic environment Airbus Boeing has struggled to respond to the nimble upstart competition. Airbus Boeing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 -
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Airbus Boeing 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 vs. Boeing (A): Turbulent Skies, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Airbus Boeing 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.
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.
Creating value in data economy
– The success of analytics program of Airbus Boeing has opened avenues for new revenue streams for the organization in the industry. This can help Airbus Boeing to build a more holistic ecosystem as suggested in the Airbus vs. Boeing (A): Turbulent Skies case study. Airbus Boeing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Airbus Boeing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Airbus Boeing is facing challenges because of the dominance of functional experts in the organization. Airbus vs. Boeing (A): Turbulent Skies 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.
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.
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 -
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 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.
Technology acceleration in Forth Industrial Revolution
– Airbus Boeing has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Airbus Boeing needs to keep up with the evolution of technology in the Global Business 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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Airbus Boeing is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Airbus Boeing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 .
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. Airbus Boeing 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 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.
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.
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.
