Strategic Management Report: Analyzing Airbus's Business Operations

This report provides a comprehensive analysis of Airbus's business and strategic management, focusing on key aspects such as the TOWS and Ansoff matrices to assess its strengths, weaknesses, opportunities, and threats, as well as its market and product strategies. The report delves into strat...Read More

Running head: BUSINESS MANAGEMENT AND STRATEGIC MANAGEMENT
Business Management and Strategic Management
The Individual Part
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Table of content
TOWS Matrix:.......................................................................................................................2
Ansoff Matrix:........................................................................................................................2
Strategies:...............................................................................................................................3
Increase the innovativeness:...............................................................................................3
Enhance the promotional activities:...................................................................................4
Increase the number of cross qualified employee:.............................................................4
S.A.Fe Matrix.............................................................................................................................5
Increase the innovativeness:...............................................................................................5
Enhance the promotional activities:...................................................................................5
Increase the number of cross qualified employee:.............................................................6
Implementation plan...................................................................................................................6
Balance Scorecard......................................................................................................................8
Contingency plan.......................................................................................................................9
References:...............................................................................................................................10

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TOWS Matrix:
Strength Weakness
Opportunity  Increase the innovativeness
 Entrance in a new market
 Meeting customer requirement
 Enter developing markets like
India
 Increase the cross qualified
employee to gain the additional
operational benefit
 Advancing the engine power and
efficiency
 Using advance distribution
channel to increase market share.
Threat  Increasing market share can
create the barrier for competitors
 Using strategic alliance
 Involving more in CSR activities
 Increase operational efficiency
 Focusing more on social media
based market
 Using alternative fuel
The strategic identification of market objectives by combining the factors regulated
by the internal environment of Airbus the most appropriate strategies can be developed in
order to increase overcome its weakness while empowering the strength. Ansoff matrix will
be also helpful to market and product related strategies.
Ansoff Matrix:
Existing product New product
Existing
market
Market penetration:
 Increase the price of the products
to gain more profit from the
existing market
 Introduce new offers for loyal
Product development
 Increase the innovativeness with
new fuel efficient aircraft
 Focusing more on social media
based promotion and marketing

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consumers and partners to have
additional advantage and
competency
 Increasing the distribution
channel to achieve the higher
reputation for quick service
strategies
 Focusing on the consumer
requirements of the individual
market
New market Market Development
 Lowering the price to attract more
potential customer
 Using strategic alliance with an
existing company of the new
market to have an insight
 Making strong consumer
relationship
 Involving more in CSR activities
to increase the brand reputation
Diversification
 Increasing operational efficiency
to achieve faster and quality
service
 Focusing on the consumer
requirements to identify
appropriate diversification
 Increase the diversity of the
product as per the market
requirement
 Enhance the promotional
activities through traditional and
digital market.
Strategies:
Increase the innovativeness:
As a manufacturing company Airbus can enhance their innovativeness to attract more
consumers within both existing and new market. Increasing innovation needs strong Research
and Development as well as capital support. Airbus has gained an enormous amount of
revenue from their existing market while having 51.1% market share throughout the globe
(Fernández Camblor 2016). At the same time, the Research and Development department of
Airbus is very strong for civil aircraft designs as well as cargo and special operation aircraft
design. Apart from that the company also has second highest revenue level within its market

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segment. By changing the fuselage dynamics and engine performance the company can build
the optimum fuel efficient aircraft. At the same time, they can also vary these two parameters
to have an unlimited customisable opportunity that could be appropriate for the potential
consumers of both new and existing market.
Enhance the promotional activities:
Airbus belongs to a specific industry segment that does not deal with average
consumers. The consumer segment of this aircraft manufacturing industry consists of
multiple ranges of Airlines Company’s and elite level individual consumers. The company
does not focus on the personal aircraft production; rather, producing aircraft of the airlines is
the main target. Therefore the promotional strategies of this company are more complicated
than other industries. Currently, Airbus is advertising through joint promotional launching
with their consumer airlines. In business to business promotion, the company like Airbus has
a very limited number of opportunity to interact directly with the consumer segment with
appropriate advertisement and promotional tools. However, digital marketing has been found
to be most effective promotional and marketing tools for business to the business
advertisement (Bazargan and Hartman 2012). At the same time, promotional activity through
online media can help the company to penetrate the existing market.
Increase the number of cross qualified employee:
The cross qualification strategy of Airbus can be beneficial through utilising their
efficient and globalised Human Resource Management. The company has a strong and
effective HRM function that can help to develop the most operational workforce. The major
focus in this workforce development of the company is making the employees more efficient
and specialised for a particular task. Airbus has a moderate risk from competitors due to its
delays in product launch and slower consumer service. Most recently Airbus A320 model has
received several poor feedbacks from the consumers due to its inefficient engine performance

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and the higher risk of thermal failure (O'Connell and Williams 2016). Therefore, increasing
the workforce efficiency can increase the resultant operational efficiency. The higher
operational efficiency will increase the performance of the manufactured aircraft that will be
also beneficial for making brand value.
S.A.Fe Matrix
Suitability Acceptability Feasibility
Increase the innovativeness √ √ √
Enhance the promotional activities √ X X
Increase the number of cross qualified
employee √ √ X
Increase the innovativeness:
Increasing innovativeness can be very beneficial for aircraft that can also be utilised
to implement diversification in a new market. There are many airlines who are sicking for
more fuel efficient aircraft with lower carbon emission level. The innovative model and
engine efficiency can make the product more attractive to the potential consumers. At the
same time, in this operational strategy, Airbus has to consider its potential risk of market
failure. In the history of aircraft development 36.9% cases of innovation have been failed due
to lack of market understanding (Lasserre 2017). It can cause massive loss in terms of market
reputation and revenue level. Therefore before initiation of any new innovation the market
analysis and interpretation is very important to find out the most appropriate target to be
fulfilled during the designing of new innovative products.
Enhance the promotional activities:
Social websites like facebook hold around 63.9% of global market communication
and promotional activities (Mellor, Hao and Zhang 2014). However, this promotional

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platform is also very risky. Often this digital platform of promotion causes negative
marketing and declining brand image. However, this negative marketing cannot regulate the
market reputation of Airbus because of its business to business approach. As a secondary
promotional objective, the company can also attract terminal consumers through the social
media based promotion. It can also increase the market reputation of the ground level
population that will influence the purchasing tendency of the airlines.
Increase the number of cross qualified employee:
It is more beneficial to have a specialist for a particular job rather than having a
multitasking stuff. Excellence proficiency is the core concerns on which the overall
performance growth can rely. At the same time increasing the number of cross qualified
employees can be beneficial for the preservation of health and safety measurement during the
production period. Specialised logistics staffs can improve the time and cost efficiency of
inbound and outbound efficiency (Brown and Bessant 2013). Similarly, the marketing staffs
with higher quality and specialisation can provide more in depth market research that will
help to find appropriate marketing strategy. However, there are some disadvantages of this
strategy as well including in higher investments, limited multithreaded functionality and
others. Training and developing of existing employee to make them specialised as well as
recruiting new specialised and higher educated employee requires high investment and
complex time management.
Implementation plan
Department Functionality/role
HR Training and development of old employees
Recruiting cross qualified new employees

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Marketing Conducting market research
Strategic marketing campaign and promotion
Sales Effective consumer relationship with strategic negotiation with consumers
Finance &
Accounting
Developing budget before the marketing and promotional operation
Preparing financial plan for management
Allocation and estimation of efficient value and expense distribution
R&D Initiating conceptual plan
Designing and testing the efficiency of prototype
Making initial changes for feasibility
Manufacturin
g
Utilising the raw material with highest efficiency
Follow the planning and designing to build up attainability
Logistic Negotiating with supplier for quality inbound logistics with cost efficiency
Coordinating outbound logistics, distribution channel and warehouse
IT Managing and operating internal and external data, information and
communication with efficient technological intervention.
Legal Partnership and contract handling with supplier and distributors
Monitor international trades and enforce regulations
Maintain standard workforce policies
Airbus has strong supply chain management and partnership that ensures the adequate
supply of required raw material. At the same time, the company focus more on conserving its
reputation of assembling more thermodynamical efficient engines with its products. From US
suppliers Airbus imports most of its medium to large scale engine. In this section, selection of
appropriate supplier and cost efficient supply chain is essential. Apart from that, the stronger
and more efficient outbound logistics process and distribution management can decrease the
overall investment for producing the innovative product (Wensveen 2018). The lower
operational cost is the key to achieve the higher return on investment level.
An effective promotional strategy is also very helpful for introducing these new
products to the existing as well as to the new market. Airbus has a specific cabin design that

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allows the pilot to control the plane with more relaxed posture. The company can also
improve the cockpit design in a more innovative way that can attract more airlines companies
(Kiseleva 2017). Moreover, innovative production will require more investment which can
ensure larger benefit range with appropriate tactics. Social media promotion and other digital
platform based promotion require very less amount of investment. In spite of being cost
beneficial, the digital platform based promotion can help to conduct an effective market
analysis. The IT department will team up with the marketing department to handle online
based promotional activities.
The Human Resource structure of Airbus is distributed globally that can help to find
the most appropriate candidate for a particular designation. Similarly, wider connection with
labour market ensures greater opportunity to find more efficient and productive employee
with higher potentiality (Kim, 2012). For internal training and development, the company can
initiate various on job training program where employees of various departments can get
adequate training with specialisation by wasting less time on it. At the same time, Airbus can
improve their workforce efficiency in a specific task by conducting event based training and
conference based training. Moreover, the company has to focus on the specialisation of
technicians and engineers to make the operational capabilities and consumer handling more
efficient.
Balance Scorecard
Perspective K.P.I (Key Performance Indicator)
Finance Increase Return On Investment by 13.5% in next 3 years
Ensure sustainable profit growth around 3 to 5% in each year
Decrease operational cost 5% in next year
Customer Increase customer satisfaction and consumer base by 12% in each year
Improve consumer helpline performance by 12% in next 2 years
Operation Improve product quality by 3 % in each year

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Reduce backlogs by 12% in next 2 years
Improve information integrity to develop work flow efficiency above 95.8%
Contingency plan
If Airbus will fail for efficient Acquisition and negotiation that can reduce the profitability
business, the company can shift their entire market segment from their existing market to new
emerging market. At the same time changing the market will require new diversification policies
to capture the potential market share. Apart from that the company can sell their partial planning
and conceptual designs to other aircraft manufacturing company to acquiring enough capital. On
the other hand if Airbus will fail to engage cross qualified labors, the company can initiate
alternate grouping and workforce mapping to solve the operational backblocks. At the same time,
using alternate fuel technology for their aircraft engine can reduce their expense significantly and
can also enhance their brand value for this innovation. Despite that, the company can incorporate
additional real time consumer helpline to conduct simultaneous market research with consumer
handlings.
The strategic planning and building of market objectives with combining the factors
regulated by the internal environment of Airbus will help to develop the most appropriate
implementation and the alternative backup plan in order to increase the market share,
profitability, brand value and prospect. Implementation of the contingency plan can be executed
with accurate and effective evaluation procedure concerning the operational potentialities and
expanse capability. Throughout the process legal advisory department can handle the contract and
legislative issues for trading and partnership.

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References:
Bazargan, M. and Hartman, J., 2012. Aircraft replacement strategy: Model and
analysis. Journal of Air Transport Management, 25, pp.26-29.
Brown, S. and Bessant, J., 2013. Strategic operations management. Routledge.
Fernández Camblor, A.G., 2016. La apuesta por el crecimiento empresarial: estrategia de
internacionalización, métodos de entrada y política internacional de marketing= Betting on
company growth: international strategy, methods of entry and international marketing policy.
Kim, M., 2012. Strategic responses to used-goods markets: Airbus and Boeing since 1997.
Working Paper, October.
Kiseleva, A.M., 2017. Marketing strategy of the territory in the investment policy of the
city. Strategic Management, 22(1), pp.22-29.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Mellor, S., Hao, L. and Zhang, D., 2014. Additive manufacturing: A framework for
implementation. International Journal of Production Economics, 149, pp.194-201.
O'Connell, J.F. and Williams, G., 2016. Ancillary revenues: The new trend in strategic airline
marketing. In Air Transport in the 21st Century (pp. 195-220). Routledge.
Wensveen, J., 2018. Air transportation: A management perspective. Routledge.