Airbus Case

According to the case, Boeing could respond in four different ways:

a) Develop a stretch version of 747. In 1999 they revived the idea of an improved 747 plane but it did not work because it was costly and also did not attract as many costumers to develop this improve version of 747. Another consideration to take in account is the fact that 747 old model could not survive while competing with the newly efficient A3XX

b) Cut prices of 747. This might attract some customers from A3XX, but will also squeeze out a lot amount of profit…

c) Developing a competing super jumbo jet. This is the riskier decision Boeing could make. This involves a cost of $13 billion and will take it about 6 years to develop this new product as Airbus did developing A3XX. We believe that at this time Airbus will have gain a lot portion of the market and will become a leader; therefore it would be more difficult for Airbus to introduce this product in the market.

d) Ignore the potential threat. This is the most likely response Boeing is going to performed because taking this project will cost them too much and will make their financial situation even riskier (we have to remember that in 1997 Boeing reported its first loss, therefore, they have to be very cautious regarding the projects they undertake). We believe that at this point they need to be concentrated in recover the costs as soon as possible, and enhances its previous products might be the fast and feasible solution to deal with A3XX.