Case Study: Business Jet Makers' Strategies in the Chinese Skies

This case study analyzes the business jet market in China, focusing on the challenges and opportunities for business jet makers. It examines the impact of Chinese institutions, including the government and military, on the industry, and how they either facilitate or prohibit the flights of business jets. The study also explores the resources and capabilities required for success in the Chinese market, highlighting the strategies of major players like Gulfstream and the competitive landscape involving companies like Boeing, Airbus, and Embraer. It discusses the effects of economic slowdowns, the role of the Five-Year Plan, and the impact of government policies, including luxury taxes and anti-corruption campaigns. The case study concludes by emphasizing the importance of understanding the Chinese market dynamics and adapting strategies to overcome barriers to entry and achieve growth in the aviation sector.

Running head: ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
Name of the Student
Name of the University
Author Note

1ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
Table of Contents
Introduction........................................................................................................................2
Analysis of Chinese skies..................................................................................................2
Ways by which China’s institutions facilitate or prohibit the flights of Business Jet
Makers............................................................................................................................2
Availability of the necessary capabilities and resources to improve their operations....4
Conclusion.........................................................................................................................7
References.........................................................................................................................8

2ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
Introduction
The case study that has been taken into consideration for analysis is based on
the operations of Business jet makers in the Chinese skies. The various factors that
have an impact on organizational operations in airlines industry of China have been
discussed in the case study. The report will be mainly based on the detailed analysis of
the ways by which the various Chinese institutions have facilitated the operations and
growth of various Business Jet makers. The capabilities and resources that can be
utilized by the organizations in order to enhance their operations will be analyzed in the
report as well. The barriers that are faced by various organizations with respect to the
operations of different institutions in China. These are mainly related to the issues that
Chinese skies that provide to the various organizations. The report will be based on the
details that are related to the different strategies that can be implemented by
international organizations in order to enter the aviation industry of China.
Analysis of Chinese skies
Ways by which China’s institutions facilitate or prohibit the flights of
Business Jet Makers
The slowing down of Chinese economy has proved a major topic of the global
business based news in the last few years. The growth of Chinese economy has been
quite slow in third quarter of the year 2003 as the country is struggling due to the trade
war with United States and soft demand of domestic market as well. The slowdown in
Chinese economy has thereby taken place in spite of the efforts made by the
government in order to support the economic activities (Ansar et al. 2016). The slow

3ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
growth of Chinese economy can have a major impact on the global economic conditions
and operations of various organizations as well. China has also become a major engine
related to the growth that has been seen in the last few years. The demands for various
types of products that include the commodities ad machinery have been able to support
the growth levels of organizations in different parts of the world (Banerjee, Duflo and
Qian 2020).
The Business jet makers however have huge levels of expectations with respect
to their operations in the Chinese skies. The foreign organizations are mainly interested
in the one billion customers who are a part of the Chinese airlines industry and have the
ability to enhance revenues and profitability as well. The arrival of foreign organizations
in China in the year 2003 has been able to support their growth and revenues in the
industry as well (Barro 2016). The Business jets are considered to be quite ideal for the
consumers in China and the vast territory of the country as well. China has been able to
become the second biggest economy in the world with respect to number of billionaires
in the country. However, the number of business jets that are currently flying in the
country are less than 400 and this number is considered to be smaller than that of Brazil
and Mexico. The number of jets flying the country is also smaller than that which is
present in the airport that is located outside Los Angeles (Chai et al. 2018).
The rise in growth of Chinese aviation industry mainly coincides with aftermath of
global financial crisis that has taken place on a global basis. The aviation based
organizations have aimed at entering the industry in order to enhance their revenues
and taking advantage of the large group of consumers as well. The military is mainly
able to control the Chinese skies and this is able to enhance the ways by which

4ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
organizations can enter the aviation industry of the country (Fang 2016). The airport of
Beijing has been able to offer two take-off based slots to the various organizations in the
industry. The huge taxes and duties that are being faced by organizations are also
based on the control that various institutions have on the operations and profitability
levels as well. The government has also planned for imposing the luxury taxes in the
industry that can further increase the costs that are faced by organizations with respect
to entry in the country (Huang 2016).
The anti-corruption campaign developed by the President of China has also been
able to influence the decisions that are made by foreign organizations to enter the
country. The two major institutions that have thereby been able to influence the entry of
organizations in the Chinese aviation industry include the government and military. The
government of China has however implemented major steps in order to enhance the
attractiveness of the aviation industry and the country as a whole (Kılıç, Uyar and
Karaman 2019). The Five-Year Plan developed by the government has been able to
enhance the entry of organizations in the aviation industry of the country. The
government has also been able to understand that the growth of aviation industry can
provide major levels of contribution to the enhancement of Chinese economy (Li and
Cai 2016).
The barriers that have been provided to aviation based organizations in China
due to presence of various institutions are able to influence the growth of the industry
and entry plans of different organizations as well. The institutions have been able to
influence the flights in a negative manner and have also prohibited the flights. However,
the recent plans that are being made by the government of China and the President

5ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
have aimed at supporting the ways by which aviation organizations can enter the
country (Li 2019).
Availability of the necessary capabilities and resources to improve their
operations
The capabilities and resources are able to play a major role in enhancing the
operations of the firms that aim at entering the aviation industry. The different
organizations that have operations in the country include Beech Hawker, Cessna and
Gulfstream of the United States, Dassault Falcon of France, Learjet of Canada (owned
by Bombardier). These organizations are able to provide major levels of competition to
each other with respect to the levels of services that are offered to the consumers in
China (Martin 2018). The huge consumer base in the country can be catered in an
effective manner with the support that is offered by the services of the organizations.
The growth potential of various organizations like Airbus, Boeing and Embraer of Brazil
is able to influence the competition levels in the industry (Shi, Guo and Sun 2017).
Boeing has adapted the 737 based model in order to develop the Boeing
Business jet, Airbus on the other hand has modified A320 in order to offer Airbus
Corporate Jet and Embraer has modified the ERJ 190 regional jet for the purpose of
developing Lineage 1000. The ultra large business jets have offered better circulated,
spacious interiors and long ranges that are based on different price ranges. The
competitive price ranges have been able to influence the entry of organizations in the
aviation industry of China (Su and Liu 2016). Gulf Stream has been able to gain the
topmost position in the industry with respect to revenues that are gained in the airlines
industry of China. Gulf Stream has sold more than 100 jets in the country and this has

6ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
led to the enhancement of market share. Gulf Stream has been able to win the orders
and this also includes the changes that are implemented in the models that has led to
the enhancement of buyers of the organization (Williams 2016).
In the year 2011 Gulf Stream had implemented major changes in G250 model
that had been introduced in the year 2008. The website of the organization has been
able to play a major role in developing communication with the consumers in order to
provide details related to the changes that have been implemented in various models.
The marketing based efforts that had been made by Gulf Stream have been able to
support the growth of the organization in China and the ways by which it has fulfilled
demands and needs of the consumers as well (Su and Liu 2016). A 60-plane based
deal had also been signed by Gulf Stream as a part of Asian Business Aviation
Conference and Exhibition (ABACE) in Shanghai that was held in the year 2014. The
industry gathering had been able to play a major role in enhancing the operations and
revenues that are gained by an organization like Gulf Stream (Yadav and Goriet 2019).
The deal that had been signed by Gulf Stream is considered to be the largest in
the entire world with respect to the amounts that are involved. The international
organizations belonging to various countries have been able to gain huge levels of
capabilities and resources that can be used for the purpose of entering the aviation
industry of China. The trends in the Chinese industry and the various aspects of the
society have an impact on the organizations that plan to enter the country (Su and Liu
2016). The changes that have taken place in the financial support provided by the
government of China are able to influence the international organizations in a huge
manner. The organizations that currently aim at entering the aviation industry have been

7ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
able to take advantage of the situation and the financial support that is provided to them
by the government as well (Zeng 2019).
The aviation based organizations have been able to enhance their operations
with proper usage of finances that are offered by the government. The forecasts and
trends have been able to depict that in the coming 20 years the demands related to
aviation services will increase and this will result in enhancement of the revenues as
well. The country has aimed at becoming the third biggest in the world with around 1500
business jets that is behind the United States and Europe that have 9500 and 4000
business jets respectively.
The resources and capabilities of the international organizations are able to
support the ways by which they are able to enter the aviation industry of China. The
growth of Chinese economy has been influenced in a positive manner due to plans that
have been made by the international firms to start their operations in China. The support
has also been provided by the Five year plan made by the Chinese government (Fang
2016). The President of China has taken major steps in order to improve the entry of
organizations and their operations as well. Gulf Stream has proved to be a major player
in the aviation industry of China and the various international organizations that have
started planning their entry in the country are supported by the government initiatives
(Shi, Guo and Sun 2017).
Conclusion
The report can be concluded by stating that the aviation industry of China and
various institutions have provided barriers to the entry of different international

8ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
organizations. The two major institutions that have provided barriers to entry of
international firms include the government and the President and the military as well.
The barriers have been able to influence the operations and levels of revenues as well.
However, the recent initiatives that are implemented by the government and five year
plan implemented by the President have supported the growth of international
organizations as well. The capabilities and resources of various international
organizations can support the growth and entry of organizations as well. The three large
jet making organizations including Boeing, Airbus, and Embraer (of Brazil) have been
able to gain major resources in order to start the operations in the industry. The massive
resources of firms are able to support the entry based plans that are made by them.

9ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
References
Ansar, A., Flyvbjerg, B., Budzier, A. and Lunn, D., 2016. Does infrastructure investment
lead to economic growth or economic fragility? Evidence from China. Oxford Review of
Economic Policy, 32(3), pp.360-390.
Banerjee, A., Duflo, E. and Qian, N., 2020. On the road: Access to transportation
infrastructure and economic growth in China. Journal of Development Economics,
p.102442.
Barro, R.J., 2016. Economic growth and convergence, applied to China. China & World
Economy, 24(5), pp.5-19.
Chai, J., Zhou, Y., Zhou, X., Wang, S., Zhang, Z.G. and Liu, Z., 2018. Analysis on shock
effect of China’s high-speed railway on aviation transport. Transportation Research Part
A: Policy and Practice, 108, pp.35-44.
Fang, C., 2016. China’s economic growth prospects: From demographic dividend to
reform dividend. Edward Elgar Publishing.
Huang, C.J., 2016. Is corruption bad for economic growth? Evidence from Asia-Pacific
countries. The North American Journal of Economics and Finance, 35, pp.247-256.
Kılıç, M., Uyar, A. and Karaman, A.S., 2019. What impacts sustainability reporting in the
global aviation industry? An institutional perspective. Transport Policy, 79, pp.54-65.
Li, H. and Cai, Y., 2016. Analysis of Monopoly Power in China’s Civil Aviation Industry.
In Proceedings of 2015 2nd International Conference on Industrial Economics System
and Industrial Security Engineering (pp. 231-236). Springer, Singapore.

10ANALYSIS OF BUSINESS JET MAKERS CASE STUDY
Li, Y., 2019. Organizational and interorganizational factors affecting safety in the
Chinese civil aviation industry. Social Behavior and Personality: an international
journal, 47(5), pp.1-7.
Martin, G., 2018. Flying dragons from the sea: Chinese carrier-borne aviation. Asia-
Pacific Defence Reporter (2002), 44(4), p.42.
Shi, Y., Guo, S. and Sun, P., 2017. The role of infrastructure in China’s regional
economic growth. Journal of Asian Economics, 49, pp.26-41.
Su, Y. and Liu, Z., 2016. The impact of foreign direct investment and human capital on
economic growth: Evidence from Chinese cities. China Economic Review, 37, pp.97-
109.
Williams, A., 2016. The Golden Triangle: The Leading Edge of Chinese Aviation.
In Contemporary Issues Shaping China’s Civil Aviation Policy (pp. 149-166). Routledge.
Yadav, D.K. and Goriet, M.O., 2019. A study of flight operational challenges
encountered by general aviation industry in China. International Journal of Sustainable
Aviation, 5(3), pp.249-262.
Yang, L., Wang, J. and Shi, J., 2017. Can China meet its 2020 economic growth and
carbon emissions reduction targets?. Journal of Cleaner Production, 142, pp.993-1001.
Zeng, J., 2019. Research on digital standard form and model of aviation manufacturing
industry. In APISAT 2019: Asia Pacific International Symposium on Aerospace
Technology (p. 1701). Engineers Australia.