Airbus_vs_Boeing_Duopoly_New_Microeco.pptx

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1. Airbus vs Boeing Duopoly Presented by Group 6

2. 2 Group 6 Name PRN Saptarshi Sikdar 23020841134 Mahak Gupta 23020841146 Rochit Limje 23020841149 Rushikesh Gaikwad 23020841150 Aditi Kumar 23020841172 Group Members

3. What is Duopoly? A duopoly is a market structure in which only two firms sell a particular product or service. This means that the two firms have a significant amount of control over the price and availability of that product or service. The two key features of a duopoly are: There are only two firms in the market. The firms are interdependent, meaning that the decisions of one firm will affect the profits of the other firm. 3

4. Duopolies can arise in a number of ways. For example, two firms may be the only ones that have the necessary resources to produce a particular product. Or, two firms may agree to cooperate and act as a single entity in the market. Duopolies can have a number of different outcomes, depending on the behavior of the two firms. If the firms cooperate, they can act like a monopoly and charge higher prices. If the firms compete aggressively, they may drive prices down to the cost of production. 4

5. Examples of Duopoly: 5 Some examples of duopolies include: The airline industry in the United States, where the two largest airlines are American Airlines and Delta Air Lines. The breakfast cereal industry, where the two largest brands are Kellogg's and General Mills. The search engine market, where the two largest firms are Google and Bing. The founder of duopoly is the French mathematician and economist Augustin Cournot. He developed the first mathematical model of duopoly in 1838.

6. Airbus vs Boeing Airbus Boeing Airbus was founded in 1970 as a consortium of European aerospace companies. It has since become a global leader in commercial aviation, and is known for its A380 superjumbo, which can carry up to 853 passengers. Boeing was founded in Seattle, Washington in 1916, and has since grown into one of the largest aerospace companies in the world. It is known for its iconic 747 jumbo jet, which revolutionized air travel in the 1970s.

7. Their popular Airplanes: 7

8. Competitive Strategies of Airbus 8 Airbus is pursuing a number of competitive strategies, including: Expanding its reach into new markets . For example, Airbus is developing a new single-aisle aircraft called the A321XLR, which is specifically designed for long-haul routes. Focusing on sustainability .  Airbus is committed to developing more sustainable aircraft, and it is investing heavily in research and development in this area. For example, Airbus is working on developing a new hydrogen-powered aircraft. Partnering with other companies . Airbus is partnering with other companies to develop new technologies and products. For example, Airbus is partnering with Rolls-Royce to develop a new engine for the A350.

9. Competitive Strategies of Boeing 9 Open innovation :  Boeing collaborates with suppliers, universities, and other organizations to develop new technologies and products. This helps the company to stay at the forefront of innovation and to reduce the cost of development. Strategic partnerships : Boeing has strategic partnerships with a number of companies in the aerospace industry. For example, the company has a partnership with Mitsubishi Heavy Industries to produce the 787 Dreamliner. These partnerships allow Boeing to share resources and expertise with other companies, which can help the company to be more efficient and competitive. Customer focus : Boeing is committed to providing its customers with the best possible products and services. The company has a strong customer support network and it is constantly working to improve its products and services.

10. Airbus vs Boeing Aircraft Deliveries: 10 676 480

11. Market Share Trends 11 Over the past decade, both Airbus and Boeing have experienced fluctuations in their market share. In 2011, Boeing held a 49% market share while Airbus held a 51% market share. However, in 2019, Boeing's market share dropped to 45% while Airbus' market share increased to 55%. This shift can be attributed to various factors such as the grounding of Boeing's 737 Max aircraft and the success of Airbus' A320neo family of planes. With Asia-Pacific being the fastest-growing region, both Airbus and Boeing are expected to see an increase in demand for their aircraft. In 2022, Boeing’s Market share is around 48% whereas the Market Share of Airbus is 52 %

12. Reasons for existing duopoly 12 One of the main reasons for the existing duopoly in the commercial aviation industry is the high cost of entry. The development and production of aircraft require significant capital investment, making it difficult for new players to enter the market. The complex regulatory environment that governs the industry. Safety regulations are stringent, and compliance with these regulations requires significant resources and expertise. Airbus and Boeing have developed a deep understanding of these regulations and have the necessary resources to comply with them, giving them an advantage over potential new entrants.

13. Emergence of New Players One of the most notable new players is the Chinese company COMAC. COMAC is developing a new family of commercial aircraft called the C919. The C919 is a single-aisle aircraft that is designed to compete with the Airbus A320 and the Boeing 737. The C919 is expected to enter service in 2023. Another new player is the Brazilian company Embraer. Embraer is already a major player in the regional jet market, but it is also developing a new family of single-aisle aircraft called the E-Jet E2. The E-Jet E2 is expected to enter service in 2024. T he American company Boom Supersonic is developing a new supersonic passenger jet called the Overture. The Overture is expected to enter service in the late 2020s. 13

14. Outsourcing Experiment 14 Boeing and Airbus have always outsourced subcomponents and systems to suppliers. In the case of the 787, however, Japanese suppliers are acquiring so-called core competences, starting with wing technology and the new lightweight materials. Hence, critics say, Boeing is giving up its competitive edge by outsourcing the major parts of the 787 with the new materials. Airbus is changing its strategy. Instead of outsourcing more and more activities and subcontracting them to partner companies as done in the past, the time of externalizing work packages seems to be drawing to a close. This is indicated by the management’s decision to reintegrate all logistics and warehouse issues into the company. Obviously, a strategic U-turn after many years in which external contractors were included in aircraft manufacturing mainly for cost saving reasons.

15. Will the duopoly continue? There have been  few challenges to Boeing and Airbus, since Airbus began manufacturing in the 1970s.  Other companies have either moved aside or been absorbed into the duopoly. With the failure of Boeing's acquisition in 2020, Embraer remains a large, separate competitor. But it is not planning any moves to develop larger aircraft. 15

16. Thank You