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In the 10 years from 2004 to 2013, Airbus has received 8,933 orders while
delivering 4,824, and Boeing has received 8,428 orders while delivering 4,458.
And in 2014 Boeing manage to collect 90.8 Billion dollar revenue and Airbus
collected around 60 billion euros.
Airbus Vs. Boeing: Net Orders Per Year
Market Share
2014 Net Market Share
Annual Net Orders Received and Delivered
by Airbus and Boeing
Barriers to entry exist for a number of reasons, but the end result is that
there is limited entry into a market or industry because the hurdles that
must be overcome are great, and therefore firms that are already part of the
industry or market have an advantage and are insulated from competition
from new entrants.
Barriers To Entry
Financing:- The cost to design, prototype, build, and deliver a new LCA is
immense. Boeing 777 the development costs were estimated to be $1012 billon.
The new Airbus A380 had development costs of 12 billion ($16.2 billion).
Production & Logistics:- Every jetliner contains lakhs of parts, ranging in size
from rivets to seats to overhead compartments. These components must be
manufactured and brought together into one aircraft in one place. The primary
reason for the collapse of Douglas Aircraft was their inability to manage their
supply chain and bring together airplanes at a reasonable cost Boeings trouble
in the late 1980s was majorly due to improper supply chain.
Competition Strategies
Threat of
New
Entrants
Model
Threat of
Substitutes
Porters Five Forces for
Boeing Vs. Airbus (Airplane Industry)
1.) Threat of New Entrants : Low
Limited choice for buyers as Boeing & Airbus together, hold nearly
the entire airplane market.
The cost involved in switching airplanes (company) is very high due
to aftermarket support/service costs.
Porters Five Forces for
Boeing Vs. Airbus (Airplane Industry)
3.) Threat of Substitutes : Low
The global civil aerospace market has long been a classic duopoly.
The sector has been dominated by European company Airbus and
the US giant Boeing, with only limited competition in the regional
markets.
The Major Competitors are:
Emergence of New Players
Bombardier
Bombardier Aerospace is a division of Bombardier Inc. The company
competes with Brazilian rival Embraer for the title of the third
largest aircraft manufacturer after Boeing and Airbus. It is
headquartered in Dorval, Quebec, Canada.
Bombardier is a global transportation company that is present in over
60 countries on 5 continents. They operate two businesses:
Aerospace and Rail Transportation.
It's high-performance aircraft and services are seen in a number of
different markets including, Business aircraft, Commercial aircraft,
Amphibious aircraft.
Revenue generated by bombardier in year 2014 was $9.6 billion.
Number of employees in the company were 38350 in the year 2014.
Embraer
Embraer S.A. is a Brazilian aerospace conglomerate that produces
commercial, military, executive and agricultural aircraft and
provides aeronautical services. It is headquartered So Jos dos
Campos, So Paulo State.
The company currently competes internationally with Canadian
rival Bombardier for the title of third-largest airplane maker after
Airbus and Boeing.
Embraer has become one of the main aircraft manufacturers in
the world by focusing on specific market segments with high
growth potential in commercial, defense, and executive aviation.
The 3 markets for which Embraer manufactures aircraft include :
1 Commercial Aviation - EMB 120, ERJ 135, ERJ 140, ERJ 145, ERJ 145 XR,
EMBRAER 170, EMBRAER 175, EMBRAER 190 and EMBRAER 195.
2 Defense Systems - Super Tucano, EMB 145 AEW&C, EMB MULTI INTEL,
EMB 145 MP and Legacy 600.
3 Executive Aviation - Lineage 1000, Legacy 600, Legacy 500, Legacy 450,
Phenom 300 and Phenom 100.