Competitive strategies in business and markets

Business

Boeing and Airbus - Culture and Strategies

There are many industries where two companies compete for leadership. In the commercial passenger airline manufacturing industry there are two firms that have been competing aggressively for many years; Boeing and the Airbus, a subsidiary of the European Aeronautic Defence and Space Company (EADS). Both of the firms have been successful: their dominance of this market has lead to a duopoly. The way firms in any industry choose strategies will reflect not only their own core competences, resources and goals, but the conditions of the external environment which inevitably includes the actions and strategies of their competitors (Mintzberg et al., 2008). Examining Boeing and Airbus it is possible to look at the ways in which they have influenced each other.

Boeing is a U.S. firm, with a long history and good relationships with many U.S. airlines, where there is a nationalistic culture and close relationships with countries such as Japan. However, the culture is one that has been influenced by internal strife at many points in time, with a high union presence following the conflict model (Bryson, 2001). For example, in 2008 the company faced a strike by more than 27,000 workers following Boeings concerns regarding job security and pay when Boeing increased the level of outsourcing cost efficiency and flexibility (Gates, 2008). Bryson (2001) argues that the reason for the emergence of a collective culture characterized by conflict is the result of an employment relationship lacking communication and trust. However, Boeing over the years have sought to overcome this and create more unity, as seen with the rebuilding of the Boeing 737 manufacturing site at Renton, Washington, after it was destroyed by an earthquake (Steelcase, 2005). The redesign of the facility sought to reduce the barriers between management and employees so create a greater level of cooperation. Other strategies included increased communication and teamwork. More recently, the difficulties faced by the airline following the recession and the fear for jobs has also served to create more unity, but this has not prevented disagreements.

By comparison Airbus is a far more diverse firm, starting out in 1970 as a consortium of manufacturers from different European countries with members from France, Germany, Spain and later the UK. The culture of the organization may be argued as highly diverse, reflecting the national cultures from which the member companies originated. The internal culture had to deal with a wide range differences, including languages and general cultural practices. The firm has also had conflict, in 2011 firm faced a walk out by 11,000 German workers in protest at the requirement for productivity gains (BBC News, 2011). However, the European firms that made up Airbus, comes from an environment where there is generally a more cooperative model of collectivism with a higher level of social support (Legge, 2004; Hofstede, 2003).