Transcript
Mgt 723Mgt 723Dr. Martina MusteenDr. Martina Musteen
Group studyGroup studyAirbus A380Airbus A380
Daisy Hsieh, Joe WuDaisy Hsieh, Joe WuSandra Wu, Sean YehSandra Wu, Sean Yeh
Aerospace Manufacturer Industry Five-Forces AnalysisAerospace Manufacturer Industry Five-Forces Analysis
Supplier Power
• High technology
• Various supplier needed for different parts and components
Buyer Power • Fewer manufacturer choices• Price costly
Threat of Substitute
• Buyer propensity to substitute low due to nearly no alternative
•Price & performance of substitute: not attractive
Industry Rivalry
• Equally balanced competitors
• Low Differentiation
Low
Low
High
Low
High
Threat of Entry
• Safety regulations• High switching costs
• High capital requirement
• high economies scale
• High Retaliation
Neutralized Negative ForcesNeutralized Negative Forces
Industry RivalryIndustry Rivalry• Product differentiation >> A380Product differentiation >> A380• Increase capacityIncrease capacity
Power of SupplierPower of Supplier• Long-term strategic alliance with key Long-term strategic alliance with key
supplierssuppliers• Multiple-sources of key component Multiple-sources of key component
supplierssuppliers
Strategic Group – FAA StandardsStrategic Group – FAA Standards
Sources: The Airbus A380 Logistics and financing
Airbus vs. BoeingAirbus vs. Boeing
Airbus BoeingEntity An EADS Subsidiary Public
Founded1970 (Airbus Industrie)2001 (Airbus S.A.S.)
1916 (Seattle, WA)
Headquarter Toulouse, France Chicago, Il, USA
Key People Thomas Enders, CEO W. James McNerney, Jr. CEO
Industry Aerospace Aerospace & Defense
Products Commercial airliners Commercial airliners
Revenue €23.5 billion (2005) $61.5 billion (FY 2006)
Employees 55,000-57,000 153,000 (2006)
Slogan Setting the standards Forever New Frontiers
Wikipedia http://en.wikipedia.org/wiki/
A Framework of Competitor A Framework of Competitor AnalysisAnalysis
Source: Adapted from M.-J. Chen, 1996, Competitor analysis and interfirm rivalry: Toward a theoretical integration, Academy of Management Review, 21: 100–134.
2–6
Airbus and Boeing
Tangible ResourcesTangible Resources FinancialFinancial
• EADS support (eg, EADS support (eg, €2,029 million €2,029 million free cash flow in free cash flow in 2006) 2006)
PhysicalPhysical
• Plants in France, GePlants in France, German, Spain, Japan, rman, Spain, Japan, ChinaChina
• Access to key suppliAccess to key suppliers worldwideers worldwide
Organizational Organizational • CoordinatingCoordinating
TechnologicalTechnological• Aerodynamic Aerodynamic
designdesign• Innovative Innovative
materialmaterial• Suppliers Suppliers
managementmanagement
Intangible ResourcesIntangible Resources Human CapitalHuman Capital
• 57,000 employees at 16 sites in 4 Europea57,000 employees at 16 sites in 4 European countriesn countries
• Close link to the Concorde project Close link to the Concorde project Innovation/Creativity/LearningInnovation/Creativity/Learning
• Innovative material: glass-and carbon-fibrInnovative material: glass-and carbon-fibre reinforced materiale reinforced material
Social CapitalSocial Capital• European base firm is a favor of Europe airEuropean base firm is a favor of Europe air
liners. liners.
CapabilitiesCapabilities
Integration – to integrate 16 sites Integration – to integrate 16 sites parts into one airplaneparts into one airplane
Design – low acoustic, wide body, Design – low acoustic, wide body, innovative materialinnovative material
Suppliers managementSuppliers management
Value ChainValue Chain
Su
pp
ort Activities
Primary Activities
Firm Infrastructure
Human Resources Management
Technology Development: developed at diff sites & integrated
Procurement : 75% external procurement, (collaborative supply chain)
Operations
- Manufacturing
- Assembling
- Integration
Marketing & sales
Service:
- Maintenance
- Training
Inbound Logistics:
-Use RFID
-Trigger notification when parts arrived
Mar
gin
Margin
Supply Chain ManagementSupply Chain Management External Collaborative ApproachExternal Collaborative Approach
• Buyer-Suppliers info sharingBuyer-Suppliers info sharing• 75% external procurement75% external procurement• Real timeReal time• Exception based (late management)Exception based (late management)• ProactiveProactive• Visibility (notify when arrived)Visibility (notify when arrived)
eSupplyChain
Four Criteria Framework – A380Four Criteria Framework – A380
Valuable?Valuable? RareRare??
Costly Costly to to
ImitateImitate??
Non-Non-SubstitutaSubstituta
ble?ble?
Competitive Competitive ImplicationsImplications
YesYes YesYes YesYes YesYes Aerodynamics Aerodynamics TechnologyTechnology
YesYes YesYes YesYes YesYes Supplier Supplier Integration AbilityIntegration Ability
YesYes YesYes YesYes YesYes Innovative MaterialInnovative Material
YesYes YesYes YesYes YesYes Marketing & salesMarketing & sales
Core CompetenciesCore Competencies
Ability to utilize the aerodynamic Ability to utilize the aerodynamic technology design to develop new technology design to develop new aircraftaircraft
Ability to integrate thousands of Ability to integrate thousands of suppliers (Supply chain management, suppliers (Supply chain management, 75% external procumbent)75% external procumbent)
Innovative MaterialInnovative Material Marketing & salesMarketing & sales
Business Level StrategyBusiness Level Strategy
cost leadershipcost leadership• Cost-efficiency, scale efficiency, product imCost-efficiency, scale efficiency, product im
provement provement to utilize the technology design to utilize the technology design
• carry more passengerscarry more passengers• CO2 emission reductionCO2 emission reduction• fuel efficiencyfuel efficiency• noise reduction noise reduction
Corporate Level StrategyCorporate Level Strategy
Related DiversificationRelated Diversification• Subsidiary of EDASSubsidiary of EDAS• transferring core competencies transferring core competencies
International StrategyInternational Strategy
RecommendationRecommendation
A380 is the right A380 is the right
long-term solution for long-term solution for Airbus.Airbus.
Rationale to Build A380Rationale to Build A380 Increase product range in Group VI arenaIncrease product range in Group VI arena Resolve Airport Congestion: high capacity aircraftResolve Airport Congestion: high capacity aircraft Take Boeing 747 replaced marketTake Boeing 747 replaced market Utilize Airbus’s core competenciesUtilize Airbus’s core competencies Extend leading technology Extend leading technology gapgap Global popularity of high Global popularity of high fuel-efficient aircraftsfuel-efficient aircrafts Larger cabin provided Larger cabin provided differentiation layout to differentiation layout to operatorsoperators
Production CapacityProduction Capacity Financial PressureFinancial Pressure
Increase capacityIncrease capacity Expedite deliveryExpedite delivery
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800
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1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Delivies Airbus
Delivies Boeing
Order Airbus
Order Boeing
IssuesIssues SolutionsSolutions
ConclusionConclusion
Proceed Proceed with with
A380A380
A380 HighlightsA380 Highlights2007 Airbus delivers first A380-800 to SIA
2006 Certification and delays
2005 Maiden flight
2004 First engine delivered
2002 Component-manufacturing starts
2001 Airbus consortium was merged
2000 Dec. 12, Commercial launch of the A3xxx (€8.8 billion)
1996 "Large Aircraft Division" formed
1994 Began developing Very Large Airliner, A3xxBegan developing Very Large Airliner, A3xx
1993 Boeing canceled similar project
1991 Market demand researched
Wikipedia http://en.wikipedia.org/wiki/Airbus_380
A380 program cost: A380 program cost: US$17 billionUS$17 billionA380 unit cost: USA380 unit cost: US$319 million$319 million
A380 vs 747-8A380 vs 747-8
A380 747-8Speed 0.85 mach. 0.855 mach.
Range 10,521 mi 10,254 mi
Wingspan 261 ft 224 ft
Max takeoff weight 1,235,000 lb 970,000 lb
Capacity 525-853 450
Cost US$319 million US$300 million
Taxiway Wider Normal
Operation cost Cheaper Higher
Wikipedia http://en.wikipedia.org/wiki/Airbus_380
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