Marketing of Airbus, Wal-Mart, and Handl Tyrol - Essay Example

? Marketing Case Studies (College) Airbus When Airbus was set up in 1970, it found it a tough task to break into the aircraft industry which was dominated by US aircraft manufacturers like Boeing. There was strong opposition from the part of other manufacturers and the US government. It was alleged that Airbus was resorting to unfair policies like heavy price cuts to beat off the competition. Another allegation was that Airbus was receiving huge financial support from four European governments with no repayment conditions. At the end of the argument, an agreement was reached between European governments and US government that Airbus would not be given more than 33% of the total development cost as financial aid for the development of any new model and that Airbus was to repay the money with interest within seventeen years. However, Airbus managed to attract customers through innovative product development and production efficiency. Airbus introduced a wider choice of aircrafts, and the aircrafts were less expensive to fly as compared to Boeing’s. In addition, Airbus introduced better technology in planes, making their aircrafts better in operating efficiencies and performance. Yet another point was production efficiency. While Boeing failed to deliver aircrafts in time, Airbus had much more efficiency in production. For example, when Boeing produced 550 jets with 119000 workers, Airbus produced 230 jets with 33000 employees. 2. Airbus gained leadership in the aircraft manufacturing industry mainly due to its innovative technology and production efficiency. When Boeing continuously failed to introduce models that could attract customers, Airbus conducted thorough market research, and their aircrafts were produced according to the demands of the airlines. So, they found it easy to get orders. In addition, Airbus planes were equipped with better technologies and were economic to operate. Boeing, in an attempt to regain its lost glory, announced two new developments, the 74X and a sonic cruiser. However, due to weak market projections, both plans were abandoned halfway. However, of late, Boeing has started working on improving the efficiencies of its existing aircrafts and reducing prices. It is evident that until Boeing becomes able to incorporate latest technology and to make its planes economic to fly, the position of Airbus is less likely to be threatened. 3. The predictions of both Boeing and Airbus about the market are entirely different. While Airbus believes that markets would require larger planes for long- haul flights, Boeing predicts that smaller planes would be in demand as point to point serviced would be in vogue. However, it has become evident that airlines are showing a growing interest in large A-380 super jet of Airbus as this helps meet the increasing freight shipment. On the other hand, Boeing is still stern on its belief that the time of larger plane has not yet come, and is working on improving the operational efficiency of its existing range. In addition, it is planning to introduce new technology in planes, and is set to improve its production efficiency. Wal-Mart 1. There are three reasons that made Wal-Mart decide to go global. The first one is the increasing competition in the domestic market. For example, companies like K-mart and Target had started eating into Wal-Mart’s market share through aggressive marketing strategies. So, Wal-Mart considered it wise to explore new markets. The second reason is the understanding that there are better markets outside the US, and confining its operations to the US market which represents only 4% of the world population is not a good idea. The third reason is that globalization and liberation of markets around the world made it possible for businesses to operate anywhere in the world. 2. In fact, Wal-Mart’s decision to enter Germany was based on a few recent developments and on the understanding of the size of the market. First of all, with the coming of Euro, the company guessed it would be easy to function in the German market. In addition, the company was attracted by the fact that Germany is the third largest market in the world. However, the decision was irrational considering the fact that German retailing industry was experiencing considerably slow growth. In addition, there was severer competition among retailers in Germany that resulted in poor gain on margins. Moreover, there was high labor cost and high real estate prices, thus a totally hostile environment for retail business expansion. 3. The first reason for the problem Wal-Mart faced in Germany is its entry strategy. Though the company had no other way to get footage in German market, acquiring Wartkauf and Interspar’s did not help the company as they already had gained a bad image in the public mind, and were in loss. Incorporating the two loser companies was a difficult task for Wal-Mart. First of all, Interspar’s had highly decentralized and independent regional units while Wertkauf had totally centralized system. In addition, acquisition by Wal-Mart meant communication in English for the local employees. Soon, there arose communication problems as the top Wal-Mart management personnel who came from the US made no efforts to learn German or to understand the culture there. In addition, the EDLP strategy of Wal-Mart fell flat as other competitors too lowered their product prices, and some retailers had even lower prices. Furthermore, the company could not make strong relationship with its vendors. Moreover, the company was in constant dispute with its employees for the low salary it offered, its anti-union position, and cultural and language differences. Also, due to lack of understanding about the German law, it fell into legal disputes too. For example, it was banned from reducing the price of products in a way that would affect small businesses. In addition, the company’s senior executives were fined for denying the trade unions access to the company’s financial information. Furthermore, customers found the culture of Wal-Mart entirely different from theirs, and even found it difficult to pronounce the name of the company. Most of the company’s customer-friendly features were stripped off in Germany. For example, in US, the company used to have greeters at all its stores to greet customers as they enter. However, in Germany, people disliked this idea as they realized that they were the ones who had to pay for this extravagance. It is evident that the company is unlikely to improve its position in German market in the near future. As studies indicate, its all business strategies that worked in US and other countries failed in Germany. In addition, over the period from 1999 to 2002, it could do nothing to improve its situation as is evident from the fact that the sales declined by 5%. Presently, the company stands seventh in customer satisfaction out of the total 10 retailers. So, it is clear that it is not possible for the company to improve its position in Germany in the near future as far as its EDLP fails. Handl Tyrol 1. It is very evident that the company has the potential to grow and reach other Eastern European countries. It will be easy for the company to reach other Eastern European nations because of the similarity in language, culture, and lifestyle. It is evident that the company has already started exports to the nations with strong economy and good GDP like Slovenia, Slovakia, Czech Republic, and Hungary. Now, the company can think about entering other markets. The first country to enter will be Croatia followed by Russia and Estonia. The next one is Romania. It becomes evident that Handl Tyrol products are unlikely to be accepted in countries where culture is totally different. So, the company is being forced to look for areas that show the Alpine tradition. So, it is a wise decision for the company to expand to Eastern European nations. Read More