The purpose of this report is to analyse the attractiveness of the aircraft manufacturing industry. Research for this report includes information from journal articles, newspapers, and analysis of actions of the main competitors. The major findings indicated that the aircraft manufacturing industry has undergone extensive changes since the late 1990’s. Despite the negative effects of environmental change like the terrorism acts of September 11, 2001 and diseases like SARS on air travel, the aircraft industry is still attractive for new entrants. The long-term growth rate caused by globalisation, governmental support, and general need for more mobility show that there is still a large demand for aircrafts of all sizes. Due to the industry’s attractiveness, it is highly recommendable to enter the industry. Companies considering this should be aware of the high volatility in the market as well as the huge capital investments needed for the development process. [...]
Table of Contents
Executive Summary
1. Introduction
2. Description of the Aircraft Manufacturing Industry and its structure
2.1. Suppliers
2.2. Civil Aircraft Manufacturers
2.3. Aircraft Leasing Companies
2.4. Airlines
2.5. Airports
2.6. End user / Customer
3. Dominant Economic Characteristics of the Aircraft Manufacturing Industry
4. Industry Competition
4.1. Major Competitors
4.1.1. Airbus
4.1.2. Boeing
4.1.3. Bombardier
4.1.4. Comparison of the main competitors
4.2. Competitive Forces Analysis
4.2.1. Rivalry in the industry:
4.2.2. Substitutes:
4.2.3. New Entrants:
4.2.4. Supplier’s Power:
4.2.5. Buyer’s Power:
4.3. Result of the Five Forces Analysis
5. Driving Forces
5.1. Lifestyle and Social Characteristics
5.2. Product Innovation and Technology
5.3. Globalisation
5.4. Government
5.5. Internet
6. Key Success Factors
7. Prospects for the industry
Objectives and Topics
This report aims to evaluate the attractiveness of the global aircraft manufacturing industry by analyzing market dynamics, competitor strategies, and the impact of external economic drivers. The central research question assesses whether the industry remains a viable target for new entrants despite high volatility and significant capital requirements.
- Analysis of the industry value chain and structural characteristics.
- Evaluation of competitive intensity between major players like Airbus and Boeing.
- Application of Porter’s Five Forces to determine industry profitability and barriers to entry.
- Examination of macroeconomic driving forces such as globalization and technological innovation.
- Identification of Key Success Factors for long-term viability in the aerospace sector.
Excerpt from the Book
2.1. Suppliers
For the construction of an aircraft the companies need a variety of raw materials like steel plates or plastic parts. This can be purchased from many suppliers on the world market.
In addition the aircraft companies need a lot of parts they can only get from a small number of manufacturers like plane tires (Goodyear, Bridgestone, Michelin) or high tech components (Siemens, Honeywell).
Last and most important group are the suppliers that deliver components that have to do with the plane’s efficiency and nevertheless with its security. These are parts like the hull and the engines (Rolls-Royce, General Electric). The aircraft manufacturers normally develop new planes together with these suppliers and form therefore long-term strategic alliances.
Chapter Summaries
1. Introduction: This chapter provides an overview of the report's purpose, focusing on the competitive relationship between market leaders Boeing and Airbus.
2. Description of the Aircraft Manufacturing Industry and its structure: This section details the industry value chain, outlining the roles of suppliers, manufacturers, leasing companies, and end users.
3. Dominant Economic Characteristics of the Aircraft Manufacturing Industry: This chapter presents a comprehensive data set summarizing market size, growth rates, and economic indicators within the sector.
4. Industry Competition: This section provides a detailed analysis of major competitors and applies Porter’s Five Forces framework to evaluate competitive rivalry and market threats.
5. Driving Forces: This chapter explores the external factors such as globalization, technology, and government policy that influence the evolution of the aircraft manufacturing environment.
6. Key Success Factors: This section identifies the critical operational and strategic requirements, such as innovation and cost-efficiency, necessary for industry success.
7. Prospects for the industry: The final chapter provides a forward-looking assessment of the industry's growth potential and makes recommendations for prospective new entrants.
Keywords
Aircraft Manufacturing, Airbus, Boeing, Industry Competition, Five Forces Analysis, Market Attractiveness, Globalization, Product Innovation, Value Chain, Entry Barriers, Aerospace, Commercial Jets, Market Volatility, Strategic Management
Frequently Asked Questions
What is the primary focus of this business report?
The report focuses on analyzing the attractiveness of the global aircraft manufacturing industry, considering both the current competitive landscape and long-term growth prospects.
What are the core thematic areas discussed in the document?
The core themes include the industry value chain, the competitive duopoly of Airbus and Boeing, the impact of global external factors, and the identification of success factors for market participants.
What is the main objective of the research?
The main objective is to offer informed recommendations for companies contemplating entry into the aircraft manufacturing sector by assessing risks, capital requirements, and market dynamics.
Which scientific or analytical methods were used?
The authors utilized Porter’s Five Forces framework and value chain analysis, supported by research from industry reports, financial data, and market forecasts.
What is covered in the main body of the work?
The main body examines the structure of the industry, competitive intensity, driving forces like social changes and technology, and the specific economic characteristics that define the market.
Which keywords best characterize this work?
The work is characterized by terms such as aircraft manufacturing, industry competition, market entry barriers, strategic management, and Porter’s Five Forces.
How do exit barriers influence the rivalry within the industry?
High exit barriers, such as the costs associated with spare parts storage and social obligations to personnel, force companies to remain in the market, thereby intensifying price competition.
Why is the threat of new entrants considered low?
The threat is low due to extreme capital requirements for R&D, long development cycles for new aircraft, and strong brand loyalties that function as significant barriers for prospective competitors.
- Quote paper
- Stefan Lacher (Author), Florian Roth (Author), Clinton Graber (Author), 2004, Business Report. Global Aircraft Manufacturing Industry, Munich, GRIN Verlag, https://www.grin.com/document/25483
