Answer to Question 1:
Wide bodied segment of large commercial jet aircraft industry can only support to two players at present i.e. Boeing and Airbus. Because they are holding the large stake in the whole jet aircraft industry and there is less demand for other aircraft which only have the seating capacity of less than 100 passengers. These two aircraft industry giants are leading this industry and also established themselves in the market. For manufacturing of wide bodied aircraft, there is high development cost associated in the market and to recover the development, the companies should have adequate orders to sell. Example is furnished in the case study that for 1 boeing 787 aircraft, it costs $18 to $20 Billion and to book the profit, the Company have the order of 1100 aircrafts. Thus, the new entrants shall incur high cost in development of wide bodied aircraft and being the new supplier, they do not have numbers of orders to supply in the market.
Barriers for entry in Wide Bodied Industry:-
As Two prominent giants, Boeing and Airbus have large market stake of wide bodied aircrafts with respectively 50% and 31%. They are completed established in the market and already have numbers of orders with the clients (Penuel, et al. 2017).
There is high development cost, so to recover this cost; the new comers should have good number of orders.
Initially, the new entrants will not be able to get such number of orders as that of Boeing and Airbus.
There is very high risk as there is high investment required to establish their existence in the market.
Both Aircraft entities Boeing and Airbus are developing new technology and techniques to increase their demand in the market (Penuel, et al. 2017).
Thus Both Boeing and Airbus are presently having the monopoly on this market and it is too hard to get the entry of new entrants in this industry.
Answer to Question No. 2:
No, the entry barriers into the narrow-bodied segment are not the same as those into the wide-bodied segment. There are three new entrants in narrow bodied segment with the seating capacity of 100-190 seats. Out of these three entrants, Comac has the support from the Chinese Government to receive the new orders and the aircrafts of this entity has the seating capacity of 170-190 which is good factor to consider the Comac for the new orders. Other two entrants also have many orders to recover the costs and book the profits from the sale of narrow bodied aircrafts.
The other rivals are also performing good in this segment, that is why Boeing and Airbus are not be able to dominate this market. As some have various parameters like know-how, government support, seating capacity etc. These entrants also have good number of orders. So these two prominent leads, boeing and Airbus should develop new techniques and fuel efficient features to be introduced in their narrow bodied aircrafts and also provide some price drive and low profit to beat cut throat competition.
Hence, the entry barriers into narrow bodied aircrafts are less as compared into wide bodied industry. Although Boeing 737 and Airbus A320 are most efficient aircrafts in narrow bodied segment. To sustain in this high competition, Boeing and Airbus should adopt some innovative features as compared to others and there must be some price difference, so that they can maintain their position in this scenario (Penuel, et al. 2017).
Answer to Question No. 3:
The Aircraft industry is a very vibrant industry and the demands for this industry are increasing day by day as the demand for air travel is increasing. Many people travel through Airlines for their businesses and pleasure trips which would create the drastic demand for the aircrafts in the next twenty years. In such years, this industry will have the ordering capacity of 37000 new aircraft. The demand would create more profit opportunities for Boeing and Airbus. These lead Giants have the complete set up to develop the wide bodied aircrafts as well as narrow bodied aircraft. They are adopting new techniques to introduce new features and making their aircraft fuel efficient and adequate price consideration (Glatthorn, et al. 2018).
Presently, Boeing and Airbus are leading the wide bodied segment as well as narrow bodied segment. In Wide bodied segment, Boeing and Airbus have monopoly as there is high development cost. But these two emerging leaders have very efficient product in the market. Other rivals have number of orders and government support. There is a probability that both of these companies may lose their hold in the market. Thus, they have to introduce new and innovative features in this segment and should have less focus on the profits (Kalmykova, Sadagopan, & Rosado, 2018).
Answer To Question No. 4:
Being a new entrant in the narrow bodied segment like Comac and Bombardier, the development strategy will focus on attainment of high number of orders received from the markets and study the needs of this market. I, being a new entrant, have good seating capacity and also have assistance from the Chinese government. But there need to make research on the market strategy of other rivals and adopted new techniques so that we can attract the new clients and increase the stake in the market (Thomas, et al. 2016).
We have good know-how that would help us to evolve new versions in the aircrafts and these innovations can only help to become the lead in this industry and dominate the market. To achieve this target, the Companies should understand the needs of the market and try to develop these needs in the aircraft so that we can introduce their products more efficiently and effectively.
Thus, a good development strategy includes the feedbacks and difficulties from the existing clients and tries to innovate their ideas and resolve their difficulties to their possible extent. Narrow Bodied segment have less number of entry barriers so the new entrant can take the entry and with the strong development strategy, it can change the demand in the market (Hare, et al. 2017).
Answer to Question No. 5:
Two Giants, Boeing and Airbus are the fast movers of this industry. They have monopoly in the wide bodied aircrafts jets and also efficient jets in the narrow bodied aircrafts jets. Both of these companies are working on new and more fuel efficient versions in their aircraft jets. In this way, these companies can control their stake in the market. As we know, market needs the new and efficient airlines jets according to the time and demand. If these companies develop some new and efficient features like fuel saving and price efficient, the demand for their product would increase and results in good profit generation. They should study the market and develop their strategy accordingly which helps to achieve the bulk orders and in the long run, the performance of the company will be good (Black, et al. 2017).
The Companies should make a good development strategy to know the demands of the market and according give the products so that the goodwill of the companies may be increased.
It is very important to both of the companies to retain their position in the market so that they can get the number of orders from the clients and supply the same on time. According to the high demand of this industry and pleasure trips, this industry would need the more aircraft jets and satisfy their demand, the companies shall have new and advanced technology to be different in the market.
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