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    Airbus's Predicament

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    Case 1

    Airbus's Predicament

    The Airbus company is facing some very bad news. A number of ugly

    incidents are worrying top management and bringing difficulty with

    investors. Your job is to use your skill as an MBA candidate and devise a

    specific plan to improve their situation.

    You must first understand the situation by reading articles in The Wall Street

    Journal and other publications. This situation calls for clear action. Hence,

    you cannot take the view that the situation is too complex or that you do not

    have enough information. That would be unworthy of an MBA candidate!

    Here are some major issues to consider.

    1. The recent Airasia plane crash involved an Airbus plane. While no

    one is blaming Airbus yet, it is a very bad situation. Many people

    were killed. There will be doubts about airplane safety. Airbus's main

    concern is the safety of the plane itself. However, Airbus planes flown

    by crews that are not fully trained would also be a bad reflection

    on the company. Quality and safety are critical to a company's


    2. It is widely thought that Airbus has made "deals" with governments

    that selected Airbus over Boeing. This may come to light and would

    damage the image of the company. It suggests unfair competition

    particularly with developing countries where bribery is more common

    than in the US or Western Europe. This has a public relations aspect -

    avoiding or tamping down bad news.

    3. Boeing is a tough competitor. Maybe Airbus should increase its

    advertising and marketing. After all, marketing is very important.

    While Airbus has made a spectacular rise in recent decades, one can

    never rest. Airbus's stock has dropped more than 25% in roughly

    the last six months. Boeing's stock has done pretty well over the last

    twelve months. What could cause this difference between the two

    companies? More ad's on TV or other marketing efforts might help in

    these difficult times.

    4. The specific number of airplane sales and the delivery schedule

    may be the most important issue the company faces. Sometimes bad

    news blows over. People may have "short memories" about airplane

    crashes. Perhaps Airbus should downplay recent crashes and focus

    on delivering the planes that were purchased but not yet delivered.

    Failing to deliver on schedule is very bad for a company's reputation.

    5. Gasoline cost is a big issue for airline companies. It has been

    suggested that Airbus work doggedly to improve airplane efficiency -

    lowering the cost of flying passengers. Profit for the airline companies

    Airbus serves is important.

    6. Another view is that Airbus is fine; it simply needs to sell at the right

    price in the right manner. This view holds that the Boeing 737 and the

    Airbus 320 are both very good planes. There are differences in cost,

    passenger capacity, operating costs and other matters. Maybe Airbus

    should lower prices or otherwise fine tune how it sells its planes. This

    view also holds that customer preferences are fickle. People may like

    one airline because it gives better peanuts. The real issue is the profit

    of the airlines.

    Further Instructions:

    There are many issues to look at in this case. You must read about the topic

    and formulate a credible "solution" that will please top management of


    1. When you identify a solution, evaluate all alternatives. Select one -

    2. Be specific. Give facts. Do not rely on opinion. Quote credible

    3. Use the Problem—Solution —Benefits format to solve the

    the best - alternative and develop a comprehensive plan to carry it


    sources. Don't use expressions such as "People say..."

    problem. Do not create a paper that merely describes the problem.

    Your problem description should not exceed one page. Do not

    waste time defining the problem or the history of the company as

    told in Wikipedia. You must SOLVE the problem.

    © BrainMass Inc. brainmass.com December 15, 2020, 11:35 pm ad1c9bdddf

    Solution Preview

    The response addresses the query posted in 1610 words with APA references

    //The success of an airplane company depends on their commitment to serving the customers with top quality and high safety. In this context, the further discussion is done regarding the critical issues faced by Airbus that are affecting its relationship with investors and hampering company's reputation. For this purpose, a specific plan containing alternative solutions is suggested to the top management for improving the current situation of the company.//

    Airbus is a global aircraft company, which is headquartered in France and deals in producing aircrafts and jetliners that have huge passenger capacity and unique intrinsic designs (Airbus, 2015). There are several critical issues faced by the company in the recent times, which is bothering the company's top management. There are increasing numbers of accidental cases questioning the quality and safety provisions of the planes manufactured by the company. Furthermore, there is an issue of weak public relations due to the incompetence of the company to properly communicate with its stakeholders. The company is also noticing a drop in its sales due to the poor performance of the marketing department. In addition to this, there is a problem of failure in the timely delivery of airplanes that are already sold by the company. The company is also facing the threat of increasing gasoline costs, which are being managed by charging high-flying prices from the passengers, which has compromised the service efficiency (Mankiw, 2014).

    Lastly, the company is also suffering from the issue of decreasing profits because of inappropriate pricing strategy. After the analysis of the above issues, it is examined that the central problem of Airbus is the operational inefficiency of the company. Due to operational inefficiency, the company is facing challenges in the form of disruptions in productions, poor work quality, loopholes in safety standards, as well as, poor coordination among the departments. The operational inefficiency is negatively affecting the work processes of productions department, marketing department, and sales department as well. The operational inefficiency of Airbus has created a market opportunity for its main competitor Boeing, which has resulted in the lower sales and profitability of the company (Hill, 2011).

    //The above text gave an overview of Airbus and the critical problems faced by it. In order to solve the above discussed issues of Airbus, various alternative solutions have been provided in the further discussion keeping in consideration the operational inefficiency as the central problem.//

    Revision of Existing Marketing Strategy by Expert Assistance

    The current marketing strategy of Airbus is influenced by the provision of localized customer support by the company (Airbus, 2014). The company has formulated its marketing and promotional policies with respect to the expansion of the business strategy. Airbus has recently entered into military transport aircraft segment. Airbus promotes its newly developed aircrafts at different platforms such as ...

    Solution Summary

    The expert examines Airbus's Predicament. The response addresses the query posted in 1610 words with APA references.