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Analysis of the Airbus Strategies Adopted in Startup - Case Study Example

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This study details the strengths, opportunities, threats, and weaknesses faced by Airbus during startup. Analysis of the solution implemented by Airbus to exploit its strengths and opportunities to overcome the stated threats and weaknesses is given as well…
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Analysis of the Airbus Strategies Adopted in Startup
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SWOT Analysis Case Study of Airbus
SWOT analysis is the process of evaluating a firm’s strengths, weaknesses, opportunities and the threats facing it at a given time. In the 1970’s, Airbus had a number of strengths and opportunities that enabled it overcome a number of threats and weaknesses facing it. This study details the strengths, opportunities, threats, and weaknesses faced by Airbus during start up. Analysis of the solution adopted by Airbus to use its strengths and opportunities to overcome the threats and weaknesses is given.
Strengths
To begin with, the airbus’ strength lied in favorable pricing, which allowed the company to improve its market share and compete effectively with established firms including McDonald and Boeing. The second strength airbus had, was generous maintenance contracts to its aircraft clients. The aim was to improve clients base and gain acceptance leading to the development of Airbus’ reputation in the aircraft industry.
Airbus’ competitive offer to its customers was strength because it rivaled established brands. This increased customers and improved Airbus market share in the aircraft industry. Similarly, pooling of financial and technological resources in four European countries in the manufacture of Airbus aircrafts was strength to Airbus. This gave the company the finances required to create a competitive advantage. The last strength was strong industry policy in Europe that favored success of Airbus, translating to £ 26 billion in subsidies that enabled the company recovery of 70 % enormous development costs. This improved competitiveness and efficiency of the Airbus, hence competed favorably with established global players, McDonald and Boeing.
Weakness
Two weaknesses plagued Airbus, loses due to discount pricing as a way to gain increased market share and lack of established reputation with airlines on safety, quality and maintenance in the earlier years of the company’s operations. This led to need for reduced prices, improved maintenance practices, and increased competitiveness by Airbus to overcome the weaknesses.
Threats
A main threat to Airbus was a ready market for McDonald and Boeing from U.S. military equipment. This reduced Airbus competitiveness in the U.S. market due to superior sales and profits by McDonald and Boeing. Secondly, Mc Donald and Boeing control of the U.S. market was a threat for Airbus growth and ambitions of increased market share.
Opportunities
Building of high quality Airbus aircrafts acted as an opportunity as it gave consumers an alternative to U.S. aircrafts. This assured customers of the benefits of industrial competition, which was an opportunity for Airbus to increase its market share globally and the American market. The other opportunity to Airbus was increasing air traffic in the world this translated to increase demand for aircrafts and an opportunity for increased Airbus global market share.
Solution adopted by Airbus
Airbus adopted strategies of improved efficiency, competitiveness, and discounting of prices for its clients. The aim was wrestling control of the U.S. aircraft market from Boeing and McDonald through developing a reputation due to discounted prices, competitiveness to get clients and efficiently to survive the tough times. The above strategy was successful because it led to increased market share of Airbus globally, increased U.S. market, and reduced dominance of Boeing and McDonald in the aircraft industry. The solution also led to improved reputation of Airbus to the airlines leading to increased sales and high profits translating to the second spot in global aircraft industry.
Works cited
Boyd, Frances. Making Business Decisions: Real Cases from Real Companies. USA: Addison-Wesley Publishing Company, 1994. Print. Read More
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