1. The Rise of Airbus, 1970 - 2005
Joe Ebiston
Johny Arul
Joseph A.J
Josephine Monisha
Judith Arockiamary
Kattampalil Tess
Kane Ajith Thayil
Kiran Paul
Manasi Anand
Team Members

2. Introduction
• A journey from Infancy to Growth to Maturity
• Historical Journey
– Problems of 1970s
– Strategies of Bernard Lathiere (1975 – 1985)
– Strategies of Jean Pearson (1985 – 1998)
– Strategies of Noel Forgeard (1998 – 2005)
– Current Problems

3. Commercial Aircraft Industry
• Enormous risks
• 1980s – four companies (Boeing, McDonnell
Douglas, Airbus and Lockheed)
• 1990s – Duopoly (Boeing and Airbus)
• High Development costs (at least 300 to 400
planes)
• Complex technology
• Material innovations
• Need of Government support
• Deregulation (allowing smaller short distance
aircrafts)

4. Problems of 1970s
• After WWII
• Coming together of Governments
• Development of A300
• Decline of Sales (Total no of planes ordered for
4 years – 20)
• Establishing Consortium
France's
Aerospatiale
48%Germany's
Deutsche Airbus
48%
Spain's CASA
5%

5. Airbus in BCG Matrix - 1970
Cash Cows Dogs
Stars Question Marks
Industry
Growth
Rate
Relative Market ShareHIGH LOW
LOW
Airbus

6. Infancy – Bernard Lathiere (1975 – 1985)
• Low Sales (only 1 in 1975)
• Lathiere’s winning Strategy – ‘3 Pillars’
– Family of Planes
– Technological Leadership and Decentralized
Production
– Global Sales Strategy
• Downside of Lathiere’s Strategies

7. Airbus in BCG Matrix - 1985
Cash Cows Dogs
Stars Question mark
Industry
Growth
Rate
Relative Market ShareHIGH LOW
LOW
Airbus

8. Growth – Jean Pierson (1985 – 1998)
• Internal Measures
– Product Development
– Cost Cutting (Lean Manufacturing)
• External Measures
– Sales Strategy (American Rivalry)
– Subsidies (Bilateral agreement with Boeing)
• 37% Market Share

9. Airbus in BCG Matrix - 1998
Cash Cows Dogs
Stars Question mark
Industry
Growth
Rate
Relative Market ShareHIGH LOW
LOW
Airbus

10. Maturity – Noel Forgeard (1998 – 2005)
• Restructuring Airbus’ Ownership
– Consortium to Company
• Diversification in defense products
• Globalization (Supply Chain)
• Marketing Strategies (53% Market Share)
• Favourable Financial Performance
France's
Aerospatiale
48%
Germany's
Deutsche Airbus
48%
Spain's CASA
4%
British Aerospace
20%

11. Airbus in BCG Matrix - 1998
Cash Cows Dogs
Stars Question mark
Industry
Growth
Rate
Relative Market ShareHIGH LOW
LOW
Airbus

12. Current Problems – Porter’s Five
Forces Analysis
No close Substitutes
No supplier pressure
Competition
1. Boeing’s B-787 ‘Dreamliner’
2. Boeing’s case with the WTO
on Government Loans
Buyer’s power
Deregulation in market
Reduced demand for
Jumbo carriers
No new entrants

13. SWOT Analysis
• Strengths
– Technology Leadership
– Lean Manufacturing (Global Supply Chain)
– Ownership of company
– Diverse products
– Strategic Alliances
– Strong Marketing support
• Weakness
– Lack of adaptability to changing environment
(failure of A350)

14. SWOT Analysis (Contd.)
• Opportunities
– Low cost mid sized planes segment
• Threats
– Stiff competition from Boeing (B787 – ‘Dreamliner’)
– Political Lobbying by Boeing (case in WTO and ‘Airbus
Accord’ in US Govt)
– High development cost
– Decline in the value of Dollar
– Decline in demand for Jumbo Carriers
– Increase in Fuel Prices
– Recession and decline in use of air travel
– Decline in Competitive edge in Airbus

15. Questions to be answered
• Should Airbus implement its past CEOs’
strategy in order to increase its competitive
position?
• Should some earlier policies and strategies be
revised and modified?
• Should new strategies be formed to tackle this
downturn and Boeing’s competition to stay in
Star position? If yes, what are they?

16. Our Solution