Question 1

Using the Framework on fig. 1.2 (Chapter 1), do the Airbus A380 and Boeing 787 qualify as high-technology products? Justify your answer.

The Airbus A380 and Boeing 787 qualify as high-technology product because their environments manifest the set of common characteristics: market uncertainty, technological uncertainty and competitive volatility.

Market uncertainty

The two companies had opposing ideas concerning the new technology's needspoint to point. Airbus expected that the number of passengers would grow so large that the available means of transport would not be enough. Boeing on the other hand expected that in case such congestion would occur, passengers would opt for short distances and move from point-to-point to avoid the crowded airports. 

Even when Boeing was working of 787 and Airbus on A380, the two companies were not sure if the technology would be in line with the standards of the industry. They were not even sure how long the technology would last before a new one emerged into the market. The companies were working with estimations and could not as well tell the size of their potential markets (Mohr et al., 2009).

Technical uncertainty

When Airbus and Boeing embarked on their projects, each had scheduled when they expected the plane to be launched. Airbus expected their plane to be completed by 2005 while Boeing wanted the 787 to be ready by 2007. A380 took 2 years longer while Dreamliner delayed by 15 months. 

The companies still had no idea about the side effects that their new products would bring. At the time of manufacturing, neither of the companies considered if the other firm’s product would make theirs obsolete. The companies only concentrated on the capacity of the plane, weight and fuel consumption (Mohr et al., 2009).

Competitive volatility

Airbus and Boeing are the top aircraft companies but they could not cancel the possibility of smaller companies coming up with new ideas that would outmatch theirs. 

Even then, they have no idea who would be a future competitor (Mohr et al., 2009). Until such a time comes, they cannot think of the tactics or product that a competitor will introduce.

Question 2
Draw a road map of historical evolution of the products from Airbus and Boeing between 1970 and 2005. What insights do you gather from this roadmap road map about nature of the commercial aircraft industry and competition rivalry of the two firms.

Figure 1 A Road Map of Historical Evolution to products of Airbus and Boeing

The commercial aircraft industry is very competitive as it is characterized by continuous changes in technology. The two companies are in a competitive rivalry where each company wants to be the first in the industry. The rivalry is good for the economy since it leads to introduction of new technology.

Question 3
Both companies experienced severe delays in the development of their next-generation products. What could Airbus and Boeing have done to prevent such delays?

The easiest option would have been to accept to cooperate as had proposed in 1992. They would have been able to work collectively towards this common goal. 

Airbus would have been assisted in selecting materials and the increase in staff would have provided enough supervisors to ensure that companies supplying the materials did it on time with no missing parts.

Question 4
Analyzing customer behavior and other trends in the travel business, which company’s vision of the industry’s future (Airbus and Boeing) do you think will materialize? Why? How does this affect the company’s positioning strategy?

Boeing’s vision will materialize. Financial Times reports that the aviation markets are weakening especially those of emerging economies like China, Brazil and Russia (Hollinger, 2016). Even though these companies have high orders at present, the weakening of these economies will affect the airlines since they have a substantial number of orders from airlines in developing nations. 

It is very likely then that the number of passengers will reduce and there will be no need for gigantic planes as Airbus Company had expected (Newhouse, 2008). Boeing Company is therefore better placed to operate planes with fewer seats because a long-range plane will make losses if its seats cannot be filled.

Question 5
In 1995 Airbus and Boeing decided not to cooperate on the design and manufacture of next-generation passenger jet. Do you think this was the right decision? Justify your answer.

I think that Airbus and Boeing made the right decision. The competition between the two companies is very important for economic growth because it leads to development of new technology. It also encourages more people to invest in manufacturing industry as aircrafts are needed in large numbers.

If they come together, there will be no competition and manufacturing jobs may have to reduce. The rivalry between these companies is very open and there is a high possibility that conflicts would be common if they decide to work together.