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Airbus Strategy Diamond
Transcript of Airbus Strategy Diamond
Founded 18 December 1969 (as Airbus Industrie)
2001 (as Airbus SAS)
Founders Bernard Lathière, Roger Béteille, Henri Ziegler
Headquarters Blagnac, France
Area served Worldwide
Products Commercial airliners (list)
Revenue Increase €33.10 billion (FY 2010)
Net income Increase €1.597 billion (FY 2008)
Parent Airbus Group (formerly EADS)
Subsidiaries Airbus Corporate Jets
Airbus Operations S.A.S.
WHAT IS AIRBUS?
VISION AND MISSION
to create the best and safest aircraft
A BRIEF HISTORY OF AIRBUS
EXECUTIVE COMMITTEE MEMBERS
President and Chief Executive Officer
Günter Butschek Chief Operating Officer
John Leahy Chief Operating Officer - Customers
Chief Human Resources Officer Airbus Group & Airbus
Tom Williams Executive Vice President Programmes
Charles Champion Executive Vice President Engineering
Chief Financial Officer Airbus Group & Airbus
Executive Vice President Procurement Airbus Group & Airbus
to meet the needs of airlines and operators by producing the most modern and comprehensive aircraft family on the market, complemented by the highest standard of product support
VARIETY OF AIRBUS
WHERE IS IT BUILT?
ECONOMIC OF LOGIC
STAGING and PACING
The “Xtra” flight experience
1. GERMANY: Hamburg, Bremen, Stade, and Buxtehude
2. FRANCE: Toulouse, Toulouse Saint-Eloi, The Saint-Nazaire and Nantes
3. UK: Broughton site (North Wales) and Filton
4. Spain: Getafe, Illescas, and Puerto Real
AIRBUS AROUND THE WORLD
Management and Leadership
As a global business operating with staff in over 30 countries, a network of some 1,500 suppliers and an order book of more than 3,600 aircraft, the management and leadership challenge at Airbus is enormous.
Our ability to meet that challenge is business-critical. This is why the integration of Management and Leadership skills has been identified as a strategic key competency which enables us to provide a consistent approach across our operations, from the executive committee to line and business managers.
We have developed a company wide strategy to ensure that our managers are identified, developed and assessed to a global standard. The objective for us is to maximise our managers’ ability to effectively engage with all staff in order to drive and deliver against business performance objectives.
Arenas in diamond strategy means where will the firm be active or participate. Arenas encompass choices made about where to compete, such as the external environment, like product or service markets, geographic area, technologies, market segment, and distribution channels.
family or passenger aircraft, corporate jet, freighter aircraft, and military aircraft
. This diverse aircraft line-up provides airline customers and other operators around the globe with tailored solutions to meet the needs of any market – from low-cost and full-service carriers to the air freight, VIP transport and military airlift segments.
Geographically, Airbus which headquartered in Toulouse, France, continues to grow on an international scale, with final assembly lines in Europe and China – to be joined by the U.S. It is a truly global enterprise with an active workforce of 61,000 around the world, fully-owned subsidiaries in the United States, China, Japan, India and the Middle East, and spare parts centres in Hamburg, Frankfurt, Washington DC, Dubai, Beijing and Singapore, training centres in Toulouse, Miami, Hamburg and Beijing and more than 150 field service offices around the world. Airbus also relies on industrial co-operation and partnerships with major companies all over the world, and a network of some 2,000 suppliers in 20 countries.
On September 2008, Airbus made joint venture with a Chinese consortium of Tianjin Free Trade Zone (TJFTZ) and China Aviation Industry Corporation (AVIC) which result to the final assembly line in Tianjin of A320 type. In March 2014, Airbus and its Chinese partners announced the extension of this successful joint venture for an additional 10 years covering the 2016-2025 timeframe. During this second phase, the facility’s capabilities will be further increased with expanded deliveries in the Asian region, assembly of the A320neo (new engine option) from 2017 onwards, and invitation of major suppliers to develop projects in Tianjin.
On June 2014, Airbus Group and Safran had agreed to create a 50-50 joint venture in space launchers, combining Airbus's launch systems with Safran's propulsion systems. The venture is expected eventually to incorporate the marketing teams for Europe's Ariane space rocket, currently in the European consortium Arianespace, and some design teams from French and German space agencies.
Airbus acquired Metron Aviation, a U.S.-based company specialized in air traffic management on July 2011, which in hope it could strengthens Airbus's strategy to accelerate and support air traffic management programs that will dramatically improve global air transportation capacity, efficiency and environmental sustainability. Metron Aviation provides advanced research, air traffic flow management, airspace design, energy and environmental services to air navigation service providers, airlines and airports.
Acquisition of Airbus and Satair – a Danish leading aviation after-market distributor – will significantly enhance Airbus’ services offering in aircraft material management. On 27th July 2014, Airbus acquired Satair for about $504 million in cash to add a maintenance and components company. Satair is a premier independent distributor of aircraft parts and services specializing in expendables and components. Through its worldwide supply chain network and its regional sales offices, Satair provides aviation parts and innovative services to a broad customer base around the world, supporting all major aircraft families in the commercial aviation market.
Differentiators are those factors that are believed to allow the firm to "win" in its targeted arenas, particularly external arenas. Differentiators can include image, price, customization, styling, reliability, and speed to the market. Differentiatiors answer the question of ‘How will the firm win the competition?'
From this picture, we know that Airbus has the biggest marketshare with 33.1%. There are some differentiators or uniqueness that Airbus has, so it could win over its competitors.
1. First, there is configured wingspan which has longer and slimmer wings that make it better glide through the skies, as the flow of air over the wing surface reduces drag and in turn, improves fuel efficiency.
2. Second, there is new lightweight 'smart' materials sense the load they are under, making for a lighter aircraft that draws less fuel and curbs emissions.
3. Third, Airbus has new manufacturing methods that will reduce the cost and environmental impact of building the aircraft despite the new advance materials and complex shapes.
4. Next, Airbus engines will be more reliable, quieter and fuel-efficient. The positioning of the engines, at the rear and semi-embedded, fully optimises the aircraft for lower fuel burn. The engine placement also boosts cabin comfort through decreased noise levels. The engines can be incorporated into the aircraft body because technological advances will have reached such a level that superior engine reliability will diminish the need for immediate access to its components.
5. Another technologies advance of Airbus is the fuselage or central body of the aircraft, which is no longer a simple tube but is curved and shaped to provide more internal space for various cabin configurations, with better aerodynamics outside to improve flight. The fuselage and entire aircraft structure is manufactured entirely from composite to take advantage of the easy-to-shape characteristics of the material.
6. Airbus’ entrance/exit doorways are double doors to allow for faster, easier boarding.
7. The empennage (tail section of the aircraft) is U-shaped, acting as a shield to reduce external noise pollution. The concept plane does not use a vertical tail, as seen on the planes of today. Vertical tails are required when engines are installed on the wings as they provide directional stability in case of engine failure. The engines of the future will have no risk of failure, eliminating the need for a vertical tail.
8. The electrical system will continuously monitor its own state of health, anticipating any need for maintenance and automatically scheduling this well in advance. Electronics and other systems on board will be entirely self-sufficient, requiring minimum to zero maintenance.
The company’s product line of
family or passenger aircraft
is characterized by high comfort, unmatched economics and versatility. The type of passenger aircraft are A320, A330, A340, A350 XWB & A380 Families ranging from 107 to 525 seats. Airbus offers the most modern and comprehensive corporate jet family in the world, giving customers the greatest choice of the widest and most spacious cabins.
The company’s corporate jets
range from the Airbus ACJ318 all the way to the double-deck ACJ380, allowing customers to select the comfort they want in the size that they need.
Airbus builds highly capable freighters
to fulfill a full range of cargo lift requirements. The freighter aircraft types are A330-200F, A380F, Beluga and A330P2F freighters set new standards in the general and express freight markets.
For military aircraft,
Airbus has A330 MRRT, A400M, C295, CN235, C212, Eurofighter Typhoon, Unmanned Aircraft System, and PZL-130 Orlik.
1. Fly by Wire
Introduced on the single-aisle family in the 1980s, fly-by-wire (FBW) technology is one of Airbus' principal competitive advantages. Weight savings, lower maintenance costs and greater precision in flying are among the advantages of the fly-by-wire system employed on Airbus jetliners. Fly-by-wire technology has enabled Airbus to develop a true family of aircraft with the highest degree of operational commonality, with nearly identical cockpit designs and handling characteristics. This makes crew training and conversion shorter, simpler and highly cost-effective for airlines – and allows pilots to remain current on more than one aircraft type simultaneously without supplementary takeoff/landing requirements, recurrent training and annual checks.
Airbus cabins are designed to offer their passengers the highest levels of comfort, services and efficiency. Passenger comfort has always been a major design consideration at Airbus in order to ensure the best possible passenger experience across all its aircraft families. Airbus cabin designs are not only innovative and attractive, but are also being continuously improved to keep offering travellers the quietest, most comfortable and enjoyable journeys. Passenger comfort has always been an important differentiator for the airline industry -especially on long range routes. Airbus jetliners provide comfort without compromise, accommodating this modern comfort standard in full-service economy class for passengers, while still offering airlines unrivalled operating economics and fuel efficiency.
3. State of the art In-Flight Entertainment
All Airbus aircraft, from short-medium range A320 Family up to ultra-long range A380, can be fitted with the latest state-of-the-art In-Flight Entertainment (IFE) systems offering passengers individual screens with audio and video on demand throughout the cabin with access to hundreds of high quality audio and video programmes. In addition, passengers can enjoy satellite live television broadcasts, outside live views from landscape cameras and access the internet from their individual monitor.
4. In-flight connectivity
Passengers can use their own wireless communication devices such as mobile telephones, smart phones, tablet or laptops to send and receive SMS messages, e-mails, access the internet and social networks, or make and receive occasionally phone calls. Both WiFi and mobile telephone services are praised by passengers especially when travelling for business purpose, in priority for data services. In addition, by the in-flight connectivity, cabin crew can easily manage the service from the Forward Attendant Panel and have the option of selecting a ‘voice-off’ mode to restrict cell-phone usage to data services only. Airbus offers by far the most comprehensive combination of connectivity solutions with different IFE suppliers. The A350 XWB native connectivity is illustrated by its standard SBB satcom and by the unique freedom of choice it offers to customers: ALNA, Thales TopConnect, and Panasonic Global Communication Suite. Panasonic GCS also enters into service on A330 & A380 this year.
Staging and pacing refer to the sequence and speed of strategic moves. Staging choices typically reflect available resources, including cash, human capital, and knowledge. Several factors such as, resources, urgency, credibility, and the need for early wins should drive staging decisions.
The economic logic element reflects how all the pieces tie together in a way that satisfies key stakeholders. Economic logic for profit-oriented firms can take the form of scale economies, scope economies, premium pricing or some combination of these.
The success of a business venture requires taking risks to develop differentiated products. The competition in the modern businesses has increased the innovation and creativity required to develop new products. For a business to maintain its market share it requires to expand its products and collaborate with all the partners in the industry.
5. Cockpit design
Airbus is the first airplane use a two man cockpit. Beginning with the A300, Airbus improved the cockpit layout, allowing a two-pilot flight crew to operate the aircraft without the need for a flight engineer. The new concept, called the Forward-Facing Crew Cockpit, went into service on an A300B4-220 delivered to Garuda Indonesia airlines in 1982, and it heralded a new era in flight decks which was to be followed by all other large aircraft manufacturers worldwide. The two-man cockpit was the idea of Mr. Wiweko Soepono, former President Director of Garuda Indonesia. Airbus took the next step in cockpit development on the A310, introducing electronic flight instrument displays that replaced many of the traditional analogue dials on the main instrument panel. This A310 “glass cockpit” used six computer-driven cathode ray tube displays to provide the captain and co-pilot with centralised flight and navigation information as well as monitoring and warning data.
Vehicles identify the degree to which the strategy relies on internal development efforts relative to partnering with or acquisition of external parties. It is about ‘how will the company get there?’ Either it is by internal development, joint ventures, licensing/franschising, alliances, or acquisitions.
The partnership or alliance of Airbus had with easyJet on August 2013 paid off as this low-cost carrier based in the UK helped Airbus inch closer to the 2013 target set by its parent company, the European Aeronautics Defence and Space Company (EADS). In a statement, Airbus said easyJet confirmed a deal for 100 orders of its A320neo model as well as 35 orders of its A320neo single-aisle planes, landing it on the top spot in the company's sheets for the most number of orders in July.
New alliances just happened on September 2014, Airbus, Denel Aerostructures, and aeronautical engineering and manufacturing company Aerosud Aviation, would jointly develop industrial projects to enable the South African partners to bid for larger-scale manufacturing work packages on Airbus commercial airliner programmes than they had been able to secure independently of each other.
The new alliance of those three companies would strengthen and sharpen the global competitiveness of South Africa's aerospace manufacturing industry and its research and development capabilities.
A strategy is the means by which a firm will achieve its goals and objectives. As a result, a strategy designed to pursue this objective will consist of an integrated set of choices. These choices can be categorized as five related elements of strategy based on decisions that managers make regarding arenas, vehicles, differentiators, staging and economic logic. These elements are central to the strategic management process that we call as strategy diamond. The company’s manager must focus on these five elements as a whole because many managers only focus on one or two such element and often leaving large gaps in the overall strategy. Or, they may have all five pieces but not understand how they need to fit together. These five elements in the strategy diamond need to be integrated as a whole to achieve the objectives.
Boeing VS Airbus
- American Airline Manufacturer
- Founded in 1916 by William Boeing and George Westervelt
- Headquarters at Chicago, Illinois, US
- Began by manufacturing for US Military during the first world war
- In early 1970s, Boeing faced a host of problems
- Boeing's market share (70% in early 1970s) began to decline when Airbus Industry was formed
- By the end of 1977, Boeing was affected by Asian Economic crisis and lost 17% of its market share.
- Boeing's internal problems are excessive bureaucracy, redundant manufacturing process, and outdated information technology setup.
Boeing VS Airbus
- Airbus seemed all set to take market leadership in the low cost segment from Boeing for the first time
- From mid 1990s onwards, Airbus had steadily increased its market share
- By the late 1990s, Boeing and Airbus had an equal shared in the market
- In 1985-1986, Boeing's market had decreased to 46% with Airbus having increased its share to 25%