Throughout the history of commercial aircraft business, Boeing had been recognized as the industry leader over decades, yet until Airbus takes over the title in 2006. In hope to regain its leading position in the industry, Boeing has initiated a new product strategy in 2004, named the Dreamliner, or the 787, to capture the forecasted increasing demand for a midsized wide-body jetliner. Market Positioning The 787 is positioned as the first midsized commercial airplane with long-range capability, which could offer non-stop service over long distance and greater flexibility for airlines to fill up the seats. Travelers’ preference to fly directly to their destination is the main believe of 787’s expected success. The launch of the 787 is likely to succeed in the market as it fills the gap between smaller airliners with limited range and large jetliners with long distance ability. It may transform the traditional hub-and-spoke network for long distance travelling by cutting down the transfer flight to the final destination. Another simple reason for the potential success of the 787 is that, if not seen as profitable, Airbus would not be interested in launching a direct competing model, the A350.
Development Process The development process of the 787 is considered as revolutionary compared to all Boeing’s previous product developments. Historically, Boeing’s engineers designed and prepared hundreds of pages of details for each part and then demanded that their strategic partners build the parts to the exactly specification. However, Boeing has asked its international suppliers to fund and run their own R&D for the first time in its history. This aims to achieve costs reduction and higher efficiency, but it may pose potential integration problems as over 70% of the 787’s parts are designed and manufactured globally by different partners using different technologies and standards. Potential Pitfalls As demand for aircraft increases, especially from emerging economies, the market is becoming larger and more attractive for new competitors.
The Term Paper on The construct lifestyle in market segmentation
Keywords Lifestyles, Market segmentation, Consumer behaviour, Tourism Abstract The swift and wide-ranging changes that present-day society is undergoing are leading to an increasing personalization in consumer behaviour patterns. These are increasingly less well explained by socio-demographic and economic criteria. This effect seems to be particularly well reflected in tourism. As one of the ...
With the “global systems integrator” strategy, Boeing’s strategic partners will develop their own technologies and parts, which could potentially be used on their own commercial planes in the future. In addition, these partners will have the sole right to sell their own developed parts and technologies to anyone without Boeing’s approvals, including Boeing’s existing competitors. To avoid these from happening, Boeing should take back the entire R&D of the 787 parts. Other Challenges Currently, the global commercial aircraft industry is becoming consolidated toward an oligopoly. Airbus and Boeing are the two major players in the market, with fewer other minor participants such as Bombardier. To their mutual benefits, Boeing and Airbus should work together, rather than fight each other. They could share the market by separating it into two broad categories, one for larger aircrafts, the A380, and another for smaller jetliners, the 787. They could also reduce their R&D costs by exchange their technologies and know-hows. Furthermore, Boeing and Airbus could raise the market entry barrier by setting up the standards of the industry to prevent potential competitors from entering.