The paper examines the extent to which Airbus has recognized and succeeded in meeting the critical success factors defined by the industry as well as industry analysts prior to 2005. In addition, Porter’s generic strategies model will be used to assess the choices that the Airbus management team and Board made, and whether these choices succeeded in giving Airbus a competitive advantage. This analysis compares the performance of Airbus over the past five years to its major industry competitors, Boeing and Embraer. The paper concludes with a discussion of the feasibility and sustainability of the company’s strategic direction over the next five years.
As early as the mid1990s, industry analysts such as R.W. Mann and Company identified several factors that were seen as critical for companies hoping to succeed in the aircraft manufacturing industry (www.rwmann.com). In their strategic planning documents and in annual reports to shareholders, the companies also recognized that rapidly changing market factors would require that they adapt their business strategies to address these emerging challenges.
Birnbaum (2004) defines a critical success factor as a strategic area where successful performance must be achieved to accomplish the business goal. The phrase “must be achieved” is highlighted because as the analysis will show, Airbus either misread the critical success factors that were identified at the time, or they simply were unable to implement strategies to achieve their strategic goals. My review of the industry analysts’ predictions as well as my review of the company websites for Airbus, Boeing and Embraer, have identified the following five common critical success factors for the aircraft manufacturing industry back in 2005:
1. Companies must expand into international markets. The number of new airlines is projected to grow through 2010 to meet increased demand for passenger travel. This growth was projected to take place