Search results

Marketing and corporate risk‐taking are always included as elements of industrial competitiveness and yet discussions of industrial policy are strangely silent on these important determinants of firm performance. The inability of Japanese industrial policy to develop these skills has been an important factor in determining the competitive position of the Japanese commercial airplane manufacturing industry. In this industry where domestic demand was not guaranteed, and where the Japanese competitors were not prepared to assume the risk‐taking position common to successful foreign competitors, Japanese industrial policy was unable to match its earlier success in basic industries.

Boeing has been a pioneer in the utilization of strategic alliances with the Japanese in the design and production of aircraft. This strategy has been driven by the escalating costs of airframe and engine design and manufacture, and the significant competition of Airbus as well as domestic competitors in the global aircraft market. Boeing's alliances with Japan have worked well with several families of aircraft and appear to have produced a loyal customer; however, there have been sharp criticisms of Boeing for the closeness of its association with Japan. These criticisms have largely been aimed at the danger posed by unintentional and unavoidable transfer of aerospace technology. This paper examines the history of Boeing's Japanese coalitions, the benefits, and the dangers posed by Boeing's continued aerospace partnership with one of America's largest economic foes.

MR GEOFFREY KNIGHT, Chairman of the Weybridge and Filton Divisions of the British Aircraft Corporation, presented an extremely illuminating paper on ‘The Civil Aircraft Industry’ at the Spring Convention on Economic Factors in Aviation held by the Royal Aeronautical Society on 13/14th May, 1970. In his opening remarks Mr Knight said that the subject was one which could well form the basis for a symposium rather than a single lecture, but in spite of this proviso his paper contained a detailed analysis of transport aircraft projects since the war; it examined the airline market, the commercial criteria for launching new projects, political aspects, the effect on the airframe industry of aero engine policies and the future. In the latter portion of the paper Mr Knight is justly critical of the Plowden Report and its failure to distinguish between the commercial and military markets. Although he thought that the Report made a number of extremely useful and valuable recommendations, he believed that as far as the commercial aircraft industry was concerned it had done untold damage from which we had only just begun to recover in the last couple of years. In contrast to Plowden's dismal prognosis on the short term civil outlook, the last few years had been the most favourable that his own company had known in the commercial aircraft market. The trouble stemmed from the fact that the industry was cyclical one, and any group of people lacking an intimate knowledge of it and examining it at one end of the cycle would be likely to reach quite different conclusions than if it were examined at another part of the cycle.

Airplane technology is undergoing several exciting developments, particularly in avionics, material composites, and design tool capabilities, and, though there are many studies conducted on subsets of airplane technology, market, and economic parameters, few exist in forecasting new commercial aircraft model introduction. In fact, existing research indicates the difficulty in quantitatively forecasting commercial airplanes due in part to the complexity and quantity of exogenous factors which feed into commercial airplane introduction decisions. This paper seeks to address this gap.

The analysis is based on a literature review, supplemented by a collection of secondary data. The study then focuses on applying three technology forecasting techniques: multiple regression; linear regression; and the Pearl growth curve.

The results provide a valid model for multiple regression and linear regression on range and composite material percentage for use in commercial airplane forecasting. However, growth curve analysis, comparatively, appears to provide the most intriguing and flexible forecast outlook in alignment with industry dynamics.

Research implications include a caution for forecasters in support of the difficulty of commercial aircraft forecasting due in part to the quantity of exogenous factors, particularly compared with a related industry, military aircraft. Future work could include: utilizing other forecasting techniques that allow for greater numbers of forecast factors, additional future models, additional range aircraft and/or analyzing the impact that competing transportation modes in mid‐range aircraft could have on long‐range aircraft introduction.

The study provides value in extending a previous descriptive paper on airplane parameters. Additionally, it appears to be one of the first quantitative examples supporting previous research indicating the complexity of forecasting airplane new product introduction, but it overcomes some of this complexity by providing a valid model for forecasting with range and composite material percentage as inputs.

At the dawn of the twenty-first century, Boeing and Airbus, the leading manufacturers of large aircraft, were locked in a battle for market share that drove down prices for their new planes. At about the same time, the two industry heavyweights began developing new aircraft families to address the future market needs they each projected.

Aircraft take many years to develop, so by the time the new planes made their inaugural flights, significant changes had occurred in the global environment. First, emerging economies in the Asia-Pacific region and elsewhere were growing rapidly, spawning immediate and long-term demand for more aircraft. At the same time, changes to the market for air travel had created opportunities for new products. These opportunities had not gone unnoticed by potential new entrants, which were positioning themselves to compete against the market leaders.

In October 2007, the Airbus superjumbo A380 made its first flight. The A380 carried more passengers than any other plane in history and had been touted as a solution to increased congestion at global mega-hub airports. Four years later the Boeing 787, a smaller long-range aircraft, was launched to service secondary cities in a point-to-point network.

The case provides students with an opportunity to analyze the profit potential of the global aircraft manufacturing industry in 2002 and in 2011. Students can also identify the actions of participants that weakened or intensified the pressure on profits within the industry.

Audio format (.mp3 file) available with purchase of PDF. Contact cases@kellogg.northwestern.edu for access.

AIRCRAFT ENGINEERING was born in March 1929 of the belief that the emerging technology from which it took its title would become a fundamental element of engineering progress. The keystone of its policy was that it would attempt to meet the needs of engineers and students working in this field and that its contents should be ‘written by engineers — for engineers’. That this venture was fully justified has been amply vindicated by the achievements of the industry during the ensuing 41 years — as recorded in the first 500 issues of this Journal, the major milestone celebrated this month. This is a propitious occasion on which to review the record to date because, although aviation has always been about looking forward, history is instructive and it is the impressive performance of the aerospace industry to date that inspires and motivates confidence in its future.

The CEO of Embraer, reflects on his company's dramatic ascent to its position as the world's leading regional aircraft manufacturer. Since becoming a private company, Embraer had successfully introduced seven commercial aircraft models to the market, including its latest, the 118-seat EMBRAER 195. Now, he is concerned because Embraer does not know what to expect from Bombardier, Boeing, and Airbus regarding their competitive response to his company's recent attacks on the commercial aircraft market. How would they respond to Embraer's successful launch of its recent family of jets? Would Bombardier really follow through with its launch of the CSeries? Would Airbus and Boeing perceive the latest attacks by Embraer and Bombardier as attacks on its own family of jets? Most importantly, given Embraer's expectations of rivals' future competitive moves, what should it do next to protect its position and influence its competitors' actions?

This paper aims to address the questions of different outsourcing strategies between Airbus and Boeing and point out the theoretical limits of the resource-based view (RBV) approach that must be broadened with a finance perspective. Owing to the complexity of systems, the aircraft industry is nowadays structured around a well-organised value chain of product development and manufacturing. However, according to the RBV, capabilities attached to some systems and components are strategic resources and must be kept in house to maintain competitive advantage. In commercial aircraft avionics, critical systems such as flight controls fall directly under this rule, due to substantial risks of passenger safety they deal with.

This study is based on two comparative studies concerning the A330/340 and A350 programmes at Airbus and their equivalents at Boeing, the B777 and the B787. The data are both primary (financial and patent data) and secondary (semi-structured interviews and documentation.

The main result highlights the limits of the RBV model to understand why Airbus has chosen to re-internalise the development and production of flight control systems contrary to Boeing. For both, cost reduction is the main objective of outsourcing, but European firms are more careful with critical resources. The financialisation of aircraft manufacturers’ strategies is another explanatory factor relevant to understand why Boeing outsources strategic resources such as flight controls.

The authors demonstrate the potential of multiplication of research methods to address a question. Second, they try to bring together different theories in a preliminary effort, which gives them some promising stuffy perspective for future works.

By addressing both the RBV and the financialisation perspectives, the authors provide an interesting view of the COmplex Products and Systems (CoPS) challenges.

The findings of this research must provide key of interpretation for business managers, which may consider the two faces, knowledge management and financial, to explain corporate performance.

Several originalities are relevant in this work. From a methodological point of view, the authors offer a comparison between the two main players of commercial aircraft manufacturing, an oligopolistic industry. Second, the data they choose to rely on are both qualitative and quantitative to strengthen the results. Third, at a micro level, this study is original in its approach of linking outsourcing to financialisation.

Spotlights that strategic alliances are widely used within the aerospace industry and the success of Europe’s Airbus Industrie consortium has been much publicized. Less well‐documented has been the success of some of Europe’s leading engineering companies, such as Rolls‐Royce, Daimler‐Benz and BMW, in supplying aero engines to the world’s airlines. Again collaborative ventures have played an important part in helping these firms to build market share within this highly competitive global market. Reviews the changes that have taken place within both the airframe and the engine sectors of the aerospace industry in recent years. Critically evaluates the part that strategic alliances have played in the increasing commercial success of the European Union in both sectors. Highlights differences in the nature and role of such alliances as well as their impact on the structure of each sector.

This paper aims to address the advantage of considering an evolutionary classification scheme for commercial aerospace supply chains. It is an industry wide approach. By going beyond the performance of the single firm and considering the whole supply chain for a product a better understanding of present states and performances of the firms within the chain can be achieved.

The approach is presented as evolutionary steps by introduction of key supply chain characters. These steps are brought together by applying cladistics to classify the evolutionary relationships between supply chain forms.

Key character states define the change of supply chain forms in the evolutionary adaptation to market realities and to proactive responses to increased competition.

The potential benefits of this approach include a benchmark of best practice, a strategic tool for policy development, and the creation of future scenarios.