Airbus-From Challenger to Leader Essay Example | Topics and Well Written Essays - 750 words

Airbus-From Challenger to Leader - Essay Example According to Subhadra (2003), the aerospace industry is broadly divided into three categories: space programs, defense contracts, and commercial aircraft. The main players in the commercial market include Boeing and Airbus Industrie (Airbus). The major threat to aerospace industry in today’s world is terrorism (Wensveen and Wells, 2007). Most airlines went bankrupt and filed for bankruptcy after the September 2001 terrorist attack. This led to decline to the world’s air passenger traffic. Another problem was that Boeing accused Airbus of choosing to use heavy price cutting in order to beat off the competition. The other problem was that they were also accused by rival Boeing of manufacturing aircrafts that it had not received orders for thereby creating a glut in the market. Furthermore, in the early 1980s Airbus was faced with financial hardships for the A-320 project. This was attributed to the fact that the government of Airbus’ partners had not approved the program. Secondly, when Airbus actually wanted to bring in more partners, no new partner was willing to invest money due to uncertain financial health of the consortium (Subhadra, 2003). Thirdly, problem regarding the products already in the market was that the consortium had not yet made money on them. Another negative feature of Airbus was its slow decision-making process and lastly, the global economic crisis, which also affected the aviation industry. To overcome its problems, Airbus uses computer software to develop its products. To alleviate slow decision-making process, the firm encouraged good cooperation among partners with manufacturing plants spread allover Europe. Since the partners were reluctant to invest due to uncertain financial health of the consortium, in early 1998, the Airbus partners re-commenced discussions on revamping the organizational structure of the consortium. Lastly, before initiating the production of a new