Why has Airbus/EADS reached such a point of economic failure?

Étude de cas Économie & marchés Économie générale

Date de publication :

13/03/2008

Langue :

Anglais

Format :

.doc

Nombre de pages :

30 pages

Niveau :

expert

Consulté :

1 fois

Avis client :

non évalué

Validé par :

le comité Oboulo.com

9,95 € Ajouter au panier

Sommaire :

Sommaire

Aims and Objectives
Literature Review
1. History
2. Organization chart
3. Different sectors in EADS Company
4. Competitor: Boeing
Methodology
1. Primary Research
2. Secondary Research
3. Secondary Evidence
4. Conclusion and Recommendation

Résumé :

Last semester, in Strategic Management module, our teacher -Rob Dekkers- was always drawing parallels between Boeing and airbus. Therefore when we were told that we had to find a subject for a research paper, a work about airbus came immediately to our mind. Given the recent news about airbus, eads, we thought it was more interesting to talk about this failure. More over, as a French citizen, we are directly concerned by the future of this company. Until 2000, airbus was the leader of the aeronautic industry before Boeing and Embraer. From this time on, airbus kept losing some market shares especially due to the problems met with the A380 conception. Added to this, the cost in euros and the selling in a weak dollar -when the dollar decrease of 10 cents, airbus loses 1 billion euros- has been an economic issue inducing huge losses. Now the question is: why has airbus/eads reached such a point of economic failure?

As seen above in the introduction, the question is: why has airbus/eads reached such a point of economic failure? Until 2000, airbus was the leader of the aeronautic industry before Boeing and Embraer. From this time on, airbus kept losing some market shares especially due to the problems met with the A380 conception. So in this report we will try to explain the reasons of this failure.
In a first part, these reasons can be found in the strategy of the company. This strategy can be divided in several points:
The cooperation between the different European countries in eads (France, Germany, United Kingdom, and Spain) met difficulties in the conception of the A380.
The lack of consciousness from the part of the managerial staff who didn't react in 2000 when the first issues emerged.
The outsourcing which is not present in the eads strategy. They produce only 25% of their needs abroad against 80% for their competitors.

In a second part, these reasons can be also found in the economy.
With the lack of outsourcing, eads didn't reduce the cost.
When the costs of production are in euros, the selling currency is the dollar. Therefore when the dollar decreases of 10 cents, airbus loses 1 billion euros.

Finally, we will analyze the solutions planned by the managerial staff of eads, in other words "The Power8" which includes:
Outsourcing
Redundant
Selling of some factories in Europe
New productivity policy

Our aims and objectives about the question: "why has airbus/eads reached such a point of economic failure?" consist to examine the strategy in eads and especially for airbus, and also to understand why this policy failed! We have to understand in this part which policy wasn't good for the company, why they have to change now the strategy and how will they change it?
Then for the finance, we can try to understand why the French government or German government didn't help the company by injected money in the eads'capital.