Boeing's Entry into China's Aviation Market: Opportunities and Challenges

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Table of Contents
1.0 Introduction...........................................................................................................................................3
2.0 Problem Identification........................................................................................................................3
3.0 Problems analysis................................................................................................................................5
3.1 Strategic alliances and networks....................................................................................................7
3.2 Strategizing with corporate social responsibility...........................................................................8
3.3 Managing competitive dynamics in a global context...................................................................10
3.3.1 Cooperation and signaling.......................................................................................................10
3.3.2 Dodgers....................................................................................................................................10
3.4 Cross border structuring, innovation and learning....................................................................10
3.4.1 International division................................................................................................................10
3.5 Governance in a global context.....................................................................................................11
3.5.1 Industry based considerations..................................................................................................11
4.0 Conclusion..........................................................................................................................................11
References.................................................................................................................................................13

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1.0 Introduction
The massive manufacturing of China classified as low grade has made it possible for
China to be elevated from poverty and can now boast as a developed economy. However, the big
question is whether high-tech can play a substantial role in raising China’s economy to the skies.
China has been reported to be on a mission of upgrading its firms a vision that entails the long-
held objective of manufacturing passenger aircraft.
The China market has been dominated by Airbus SE and Boeing Co. for decades and the
incumbent state manufacturer Comac with Comac wanting to surprise its competitors in three
years to come by producing its C919 jet. There are many business opportunities, and China
wants to dominate the market and become the leading market for airplanes and passengers. Thus,
the heavyweights of the aviation industry such as Europe and North America have a point to
worry. The big question to ask is how travelers both at domestic and internationally are prepared
to accept aircraft made in China.
2.0 Problem Identification
Following two years of constant postponements, the C919 completed successfully the
scheduled first test that took place in May 2017. It is only in less than a year that Comac, a
Chinese corporation dealing with commercial aircraft that it already has more than 800 airplane
orders from 28 Chinese buyers. Plans are underway between the Chinese authorities and the U.S.
on obtaining agreements about the worthiness of the planes. The European regulators are also in
the plan as they will be crucial in opening way for both sales and flights that are from China. The
C919 is a flight that will have 158-168 seats and will be primarily a single-aisle jet built and will
come with customized versions as most parts are from different, for instance, the engine is from
the CFM international Inc which happens to be Franco-US based venture. Irrespective of its

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impact on Boeing, a C919 that is up for the market means a boon for Comac’s extensive network
of global suppliers spanning from General Electric company to Honeywell International.
However, production on a large scale can be said to be several years behind and can be
hardly guaranteed. The initial attempt to venture into the aviation market by producing the
ARJ21 which was a 90-seat jet took eight years to become a commercial activity from the first
flight in 2016 (Clark, 2018). The executives from Comac have made announcements that the
C919 will get to the market faster than anticipated and the China Eastern Airlines corporation
will be the first to receive the first batch of consignment at around 2021. Comac has plans
underway to forge an alliance with Russia’s United Aircraft Corporation to design and produce a
jet that is twin-aisle that will be flying from Beijing to New York.
Background
The early bids by China to producer passenger jets failed. For instance, the Y-10 took
decades to move from first design to initial flight tests in the 1980s. However, the state’s interest
faded as aviation business from the West opened up. The MD-82 was developed as a product of
a joint venture that soon collapsed following the acquisition of McDonnell Douglas, a Chinese
partner in 1997. China’s president, Xi Jinping’s agenda for a manufacturing sector that is
complex referred to as made in China by 2025, has led to renewed impetus as the strategy
impedes on projects such as the airplanes. For instance, the first aircraft in China got launched
immediately before testing the C919 (Jiang, 2016).
William Boeing, the founder of Boeing, manufacture his first plan back in 1916 in Seattle
dominated the market for passenger jet sales, and it was until the amalgamation of aerospace
bodies in the European region in 1960 that opened up doors for Airbus which commanded a
substantial market share between the 1980s and 1990s (Tieman, 2017). The two companies that