STRATEGIC BUSINESS MANAGEMENT ANALYSIS 2022

Running head: STRATEGIC BUSINESS MANAGEMENT
STRATEGIC BUSINESS MANAGEMENT
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Table of Contents
Introduction....................................................................................................................2
Environmental Analysis.................................................................................................3
Macro Trend Analysis................................................................................................3
Highly Uncertain Key Drivers of Change..................................................................5
Industry Analysis.......................................................................................................6
Capability Analysis........................................................................................................7
Value Chain Analysis for Airbus Commercial Aircraft.............................................7
VRIO Analysis of Value Chain................................................................................10
Competitive Implication...........................................................................................11
Proposed Strategy and Conclusion...............................................................................11
References....................................................................................................................14
Appendices...................................................................................................................16

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Introduction
Airbus SE is a known name in the airline manufacturer industry. The company
is the European multinational aerospace corporation that have its headquarters in
Netherlands. The Airbus group has its shared trades in Germany, France and Spain. This
company was the highest order taker in the airliner manufacturing in the year 2019. The
company manufactures military and civil aerospace products. They also manufacture aircrafts
in Europe and worldwide. The company has three units of business- commercial aircrafts,
helicopters and Defence and space (airbus.com 2020). The commercial aircraft is the
emerging segments for the company performance. Yet, the problems in this sector cannot be
avoided. The main challenge that the company is facing in Commercial aircraft segment is
low intake of orders and delivery problems (reuters.com 2017). The manufacturing delays are
affecting the reputation and business of the commercial aircrafts of Airbus group.
The official website of Airbus Commercial Aircrafts states that, “Airbus is a leading
aircraft manufacturer whose customer focus, commercial know-how, technological leadership
and manufacturing efficiency have propelled it to the forefront of the aviation and air
transport industries.” (airbus.com 2020) The challenges that the company is facing in recent
times do not go with the “manufacturing efficacy”. The number of products also is the part of
the manufacturing deals. The company has not been able to deliver the promised number of
products in time. This is creating a problem in their performance. The internal problems of
the company culture can be one of the reason of such degradation. The changes in the
authoritative and managerial roles are creating imbalance in the organisational work culture.
The overall impact can be shown in the manufacturing units. The delay in manufacturing of
the new commercial flights are the outcomes of the lack of leadership competencies. The
company has recently lost one of its important deals to a Singapore based aircraft. The

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famous Superjumbo A380 production is now standing in a questionable position because of
the delayed manufacturing.
The rival companies are capturing the markets of Airbus as they are delivering more
aircrafts in less time. The competition is high and in this situation, the Airbus is not being
able to manage its internal problems effectively. In the company statement, the mention of
technological leadership is there. The reputed European aircraft company is also falling
behind in their innovations. One of the main competitors Boeing is been grounded for last
few years, but because of the manufacturing delays, the company is not being able to grab the
opportunity of the market. The Airbus Chief Executive Guillaume Faury, stated in an
interview- “It might look like a paradox, but in the short term, we don’t benefit from the
situation with our competitor.” (Lincoln and Linh 2019). While publishing the annual report
of 2019, Faury explained that they are not being able to grab the opportunity Boeing has
provided them as they are not being able to manufacture the planes fast enough (nytimes.com
2020). The bulk orders for the planes are lagging behind for months and this is hampering the
profit and reputation of the Airbus Commercial Aircraft.
Environmental Analysis
Macro Trend Analysis
The drivers of change in an industry are the determinants of the opportunities and
threats within its context. In the airline industry, the main trade drivers are the political
scenario of the country, in this case, United Kingdom would be considered. These are the
external factors that influences the organisational growth and impact (Richter and Witt 2017).
Other than the political factors, the technological interventions and the legal factors also are
affecting the business results of Airbus commercial aircrafts.
Political

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The political scenario of a country influences the business of any sector. The aircraft
industry is not any different. According to Reuzeau (2020), a stable political condition in a
country gives the required security and support to the companies in the country. For Airbus, it
is extremely necessary that it has the trade and tax related support from the concerned
country government. In the case of UK, this support is available as the country has a stable
political background. The changes in the rules and policies are not that rapid. Therefore, the
company has to think less about these aspects and they can perform their business effectively.
With the change of the government, there comes some changes in the policies and trade
provisions. The company than have to reset their operational methods to adjust the change
(Schmid and Altfeld 2017). Hence, political turmoil can lower the business opportunity. In
UK, the political stability can be great opportunity for the commercial aircraft segment of
Airbus.
Technological
Technological interventions and innovations are the key to competitive advantage in
the aircraft industry. The companies that are entering the market might work with some
innovative technology that would cater the market demand more efficiently. The
technological interventions are also related to the manufacturing and delivery times
(Rosenberg Hansen and Ferlie 2016). The overall impact of technology over this industry is
huge. Commercial aircrafts of Airbus are known for their technological novelty and comfort.
The company has a great reputation related to its research and innovation. At the same time,
the technological interventions of the competitive company can affect the performance of the
company. Therefore, the technology can only work as an opportunity for the company if they
stay ahead of their competition. On the other hand, any kind of technological advancement by
the competitors can reduce the company selling nd profits.

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Legal
Airbus has recently faced some legal allegations against their company which is not
adding to their reputation. The company has faced some legal fights with Austria for having
some fraud in their fighter jet sections. The company has to be very careful in their
commercial flights sections. Any kind of frauds or negligence is in these plane manufacturing
can cause the risk of the lives of passenger which will lead the company to massive legal
anomalies (Nickols 2016). The risk in this legal sections are a great threat to the company
reputation if not managed carefully.
Among the above mentioned drivers of change, the political stability of UK can act as
an opportunity along with the technological support that the company can get from UK
government and R&D sectors. But the legal challenges can be a great threat for the company
business if not managed carefully as the trade policies of UK are strict and competition is
high.
Highly Uncertain Key Drivers of Change
Technology
Technology is the huge influence in the business of Airbus. The trends in technology
are ever changing. With the technological revolutions of modern times, in the aerospace
industry is almost evolutionary. Right from the design to the manufacturing process, every
aspects of the plane manufacturing is related to the higher technologies. The areas of
improvement in the aerospace manufacturing technology might include- supplier process,
integrated quality, production data sources, manufacturing planning and manufacturing
designs (Michael, Storey and Thomas 2017). All of these influence the trend s of aerospace
manufacturing industry. Airbus has been one of the leading company because of its
technological interventions. In spite of that, the manufacturing design of the company needs

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to be changed so that the speed of production cam be increased. The company would not be
able to use the opportunities in the market if they do not upgrade their technological
innovations.
Manufacturing Process
The competitor of Airbus, Boeing, has delivered a great opportunity for the company
to manufacture more units and increase their business. Unfortunately, the company is not
being able to grab the opportunity as they are lagging behind in their manufacturing units. As
opined by Aguinis, Edwards and Bradley (2017), in the aircraft industry the companies have
to be on toe in their production so that they can grab the opportunities of the market. This
trend of the industry is a great opportunity, but Airbus is not being able to use it because if
their own shortcomings.
Industry Analysis
Porter’s five Force
Bargaining Powers of Suppliers
The number of suppliers in the industry is higher than other industries. Therefore, the
bargaining power of the suppliers is a weak force for the business of Airbus commercial
flight manufacturing.
Bargaining powers of the Buyers
The buyer do not have much control over the prices of the products as the number of
companies in this field are quite limited. Hence, the industry players do not have to deal with
the threat of bargaining power of the buyer at large.
Threats of Substitution Products

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The firms operation in the industry of aircrafts do not face much threats from their
substitute industries. The companies have high profits in this industry but entering the
industry is quite difficult (Hitt, Ireland and Hoskisson 2016). The availability of the
substitutes in the industry of Aircrafts are quite negligible. Hence, for Airbus Commercial
aircrafts, threats of substitute products is quite low.
Threats of New Entrants
The industry of commercial flight manufacturing needs high capital costs. Hence it is
difficult for new entrants to enter the industry easily. Hence, the threat of the new entrants are
quite low for the commercial aircrafts of Airbus. Also the strict licencing for the
manufacturing if the planes make the threats if new entrants weak.
Existing competition
The companies that exist in this industry are known for their quality products and high
end technology. Therefore, a mere change in the strategies by any company are easily
noticeable. Rivalry among the firms in this industry is a weaker force for this transparent
condition (Baumgartner and Rauter 2017). Though the capabilities of the competitive firm
also makes this an important threat. Any kind of fall from quality can be harmful for the
companies operation in the scenario. Airbus also have to be careful of this aspect of the
business to reduce the threats within the industry.
Hence, this can be concluded that low bargaining power of the suppliers and the buyer
are a great opportunity for the Airbus business unit to grow. The threats of new entrants and
substitute products are also low which a positive thing for the company profit making is
again. The only potential threat can come from the competition with the existing companies.

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Capability Analysis
Value Chain Analysis for Airbus Commercial Aircraft
Primary Value Activities
The Airbus commercial aircrafts unit gives special importance to their sale and
production. Therefore, the primary value activities need to be analysed to understand their
performance measures.
Inbound Logistics
Airbus is hugely depended on their suppliers for the supply of the raw materials and
store distributions. The ware house and inventory management of the company is recently
facing some problems. According to Zhao et al. (2017), it is because of the disparities of the
supply and demand aspects in the inbound logistics that the company is not being able to
meet the executed orders on time. The number of suppliers in this industry is fixed. Hence,
getting right amount of supplies for the extended orders can be a great challenge for the
company operations.
Operations
The manufacturing and services operations are a critical part of the value creation in
Airbus. The supplies for the products are transferred in to the end product through the
operations. The operational activities of the commercial aircrafts of Airbus includes-
repairing, manufacturing, packing, testing, assembling and maintenance. These are the part of
the company operations that have to be effectively working to get competitive advantages.
Outbound Logistics
Different intermediately steps in the manufacturing and delivery process are the part
of Airbus’ outbound logistics. In the case of Airbus commercial aircrafts, the outbound

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logistics would include warehousing, material handling, transporting, order process a
delivering. Business growth can be achieved if Airbus decides to improve their outbound
logistics.
Marketing and Sales
The marketing and sales unit of the company are quite string. This is the company that
has been able to capture a lion share of the UK aircraft market. Hence, the marketing and
sales of the company adds a huge value to the company operations and production.
Services
The services in the value chain analysis denotes the pre-sale and post-sale services.
The customers in the aircraft industry considers the post-sale relationship to be an important
part of their deal (Meyer, Neck and Meeks 2017). It also concerns the promotional and
marketing aspects of Airbus.
Secondary Value Activities
The secondary activities of the firm are important to provide required support to the
primary activities of the firm.
Firm Infrastructure
Airbus has strong infrastructure in itself with skilled human resources and strategic
management. The aspects of firm infrastructure within Airbus are accounting, financing,
planning. Legal matters handling and quality management.
Human Resource Management
In the face of the challenges, the company is trying to increase its production and
delivery speed. In this matter, the human resource and its contribution to the process cannot

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be neglected (Hitt and Duane 2017). The effective management of the human resources is
one of the priority of the company.
Technology Development
Most of the value chain activities of Airbus commercial aircrafts can be improved
through the use of modern technology. The reduced production of the company can be
improved if the technology is incorporated to the system more.
Procurement
The procurement management is the part of the organisation that deals with
purchasing the equipment, machinery supplies and raw material (Lasserre 2017). The
distribution of the finances in these sections are important to keep the function ongoing.
VRIO Analysis of Value Chain
VRIO framework is used to analysis the capacities of the resources that the company
has and how they creates differentiate values for the company. The VRIO analysis shows the
strengths of the resources and competitive advantages for the company. The value chain of
the Airbus Commercial Aircrafts can be evaluated through VRIO framework.
Valuable
The most valuable resources of the company are the financial resources and raw
materials. The human resource of the company are another valuable resource for improving
the value chain of the company. Airbus can give tough competition to their competitors
through their skilled and resourceful human resources.
Rare
The rare resources for the company is their financial resources. As an aircraft
company, Airbus has worked in mergers and acquisition along with partnership programs that

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gives it a good financial support. The cost structure of the company is rare in the industry in
works.
Imitable
The industry of aircrafts designing is itself very costly to imitate. Therefore, the
companies like Airbus do not have an imitable business strategies. The resources used by the
company in financial and product resources are not imitable easily. The technology that the
company uses is hard to imitate as well. Though the human resources are imitable as their
competitors can train their employees with the same skills.
Organisation
In the organisational structure of the company is quite strong. The financial resources
and costs of the company are organised in an effective way. The human resources are
organised and so are the supplies or inventories. The intellectual resources of technology nd
innovation are managed effectively in Airbus.
Competitive Implication
The Airbus has a strong resources in their financial and technology sections. The
human resources of the company are another important asset for the company. In spite of that
the management of the human resources of the company are to be improved in their
management aspects (Ansoff et al. 2018). The main strength of the company is their financial
resources management. Effective technological interventions, suppliers and their marketing
and sales strategies. All of these are effective for giving the competitive edge to the company.
The recent challenges highlighted the weaknesses in procurement management, human
resources and firm infrastructure management. These are the reason of low productivity of
Airbus Commercial Aircraft.

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Proposed Strategy and Conclusion
Strengths
Cost management
Financial resources
High reputation
Low competition
Weaknesses
Procurement Management
Human resource management
Delivery and logistics management
Instability in company management
Delay in Delivery and Production
Opportunities
Big market opportunities
Availability of resources
Technological resources
Threats
Changing trends in the market
Changing production requirement
Rapid change in demands
Figure: Swot analysis of Airbus Commercial Aircrafts
(Source: Created by Author)
Possible Strategies for the Airbus Commercial Aircrafts could be Cist Leadership,
Differentiation, Focused Differentiation or Mixed strategies.
Among the suggested strategic options the most effective strategy for the airbus
present challenges would be Differentiation. The challenges that the company was facing was
related to its late production and managerial problems. The differentiation technique would
be focused to the improvement in the production or manufacturing quality (Rothaermel
2016). Cost reduction is not the problem for the firm as its financial resources are duly
managed. Hence, the company has to work for the improvement of its functional and product
qualities so that it can capture the market share easily. This will include the better
communication among the departments, better management of the procurement and logistics.
Also the unique technological inclusion in their supply chain management would be effective

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for the company to improve their production. Delivering the products on time would help
them getting market competitive advantages and more profits. If the company becomes
successful in making difference in their operation and management aspects, it can solve the
challenges in an effective way.
Introducing the differentiation for manufacturing would reduce the threats of
changing trends. The company would be ready with flexible marketing and manufacturing
options. They would be able to use technology more effectively. The procurement
management and the human resources management would be another part of the
differentiation strategy. As quality would be given priority, the company would be able to
capitalise their strengths like strong financial resources and skilled employees. The resources
for the strategy are already there in the organisation, only the leaders have to manage them in
an effective way through improved communication and better timing. The purpose of the
company is to provide improved service to their customers and build sustainable relationship.
Through this strategy, the company would be able to attain that at multiple level.

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References
Aguinis, H., Edwards, J.R. and Bradley, K.J., 2017. Improving our understanding of
moderation and mediation in strategic management research. Organizational Research
Methods, 20(4), pp.665-685.
airbus.com (2020), airbus: Commercial Aircraft. Available at:
https://www.airbus.com/aircraft.html
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018. Implanting
strategic management. Springer.
Baumgartner, R.J. and Rauter, R., 2017. Strategic perspectives of corporate sustainability
management to develop a sustainable organization. Journal of Cleaner Production, 140,
pp.81-92.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Lincoln, W. and Linh, D., 2019. Case 4: Airbus and the A380.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic
management interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Michael, S., Storey, D. and Thomas, H., 2017. Discovery and coordination in strategic
management and entrepreneurship. Strategic entrepreneurship: Creating a new mindset,
pp.45-65.
Nickols, F., 2016. Strategy, strategic management, strategic planning and strategic thinking.
Management Journal, 1(1), pp.4-7.

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nytimes.com, 2020, As Boeing Jets Sit Idle, Airbus Can’t Make Planes Fast Enough.
Available at: https://www.nytimes.com/2020/02/13/business/airbus-boeing.html
reuters.com, 2017. Airbus faces multiple challenges as it enters new era. Availaboe at:
https://www.reuters.com/article/us-airbus-reorganisation/airbus-faces-multiple-challenges-as-
it-enters-new-era-idUSKBN1601ZO
Reuzeau, F., 2020. The Key Drivers to Setting up a Valuable and Sustainable HOF Approach
in a High-Risk Company such as Airbus. In Human and Organisational Factors (pp. 31-39).
Springer, Cham.
Richter, K. and Witt, N., 2017. Introduction: Supply Chain Integration Challenges in the
Commercial Aviation Industry. In Supply Chain Integration Challenges in Commercial
Aerospace (pp. 1-15). Springer, Cham.
Rosenberg Hansen, J. and Ferlie, E., 2016. Applying strategic management theories in public
sector organizations: Developing a Typology. Public Management Review, 18(1), pp.1-19.
Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Schmid, S. and Altfeld, F., 2017. Airbus–Managing the legacy of a complex international
merger. In Technologie, Strategie und Organisation (pp. 287-308). Springer Gabler,
Wiesbaden.
Zhao, E.Y., Fisher, G., Lounsbury, M. and Miller, D., 2017. Optimal distinctiveness:
Broadening the interface between institutional theory and strategic management. Strategic
Management Journal, 38(1), pp.93-113.

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Appendices
Appendix 1: Changes in response to tutor feedback
Tutor feedback Changes
1. the identification of
opportunities through relevant
resources
I have taken the help of the annual report
and nytimes report to identify the threats and
opportunities
2. the relevance of SWOT
analysis
2. I have done the SWOT analysis of the
basis of the report finding, taking clue from the
relevant resources
3. the reference and
citation
3. All the references I have used in this
assignment are recent and cited in Harvard style.