Plane Makers Make it plain for Market Share

Plane Makers Make it plain for Market Share

Boeing, the US plane producer, was once the world’s biggest aircraft maker based on its global market share. It has certainly learned that one person’s poison is other person’s meat. In this case, it translates to one company’s failure is another company’s success. Sadly, it is a fail-win situation. Blue ocean strategy teaches us to look for the failures in our competitors to exploit the opportunities. And to create a niche product that would appeal to those customers that have fallen through the cracks. It is one way of making the fierce competition irrelevant. Boeing and Airbus teach us just that. Airbus rose up to the occasion when airliners felt the need for more efficient aircraft. It was a time when Boeing was too caught up in the Dreamliner program.

Boeing going gone

Recently, the U.S partially lifted the economic sanctions in Iran. It enabled the plane maker to reach a deal to sell 100 new planes to Iran Air. However, in between being considered the largest aircraft maker and the Iran Air deal it was on a downhill path. Plane makers were creating a vacuum in the industry. Airbus took advantage of the opportunity and manufactured aircraft to fill the vacuum. Airbus applied the Blue Ocean Strategy from which Sales and Marketing Professionals can learn a few lessons. To put it in context it is worth exploring the rival company, the European plane producer Airbus, and its global market share in comparison to Boeing.

Airbus in business

Europe’s aircraft manufacturer, Airbus, is passionate about aviation and designs the world’s best and efficient aircraft, and is reputed to shape the future of air transportation by regularly capturing half of all commercial airliner orders. In 1995 it became the first plane maker to allow airlines to function without the need for financing a fleet. In the recent decade at an enormous expense, it developed the A380 superjumbo, albeit not yet with enough orders, is another feather in its cap. Airbus entered into the business 50 years after Boeing began its market share domination. It had the confidence and the guts to take Boeing by its horns. What would be interesting is to analyze how it stacks up against its counterpart.

Boeing vs. Airbus

Since the 1990s, the airliner market was a duopoly one with just Boeing and Airbus enjoying the space. However, Boeing’s unassailable lead in the sector of commercial airliners came under threat from Airbus when since 2012 the European firm outpaced it with the number of orders. Boeing’s failures include pricking its pride when it could not manage to stay head to head with Airbus who has been in business for less than half its time. What most companies fail to do is to use its Sales and Marketing force to analyze the competitive landscape on a regular basis either monthly or quarterly. What did Boeing do to reach a situation where Airbus out-competed it using fifth fewer employees? It failed to look beyond the horizon at its immediate competitor.

Boeing’s Dreamliner turns to nightmare

The Dreamliner program that projected to cost $6 billion and take off in 5 years instead took $32 billion and eight years to complete due to technical failures and supply chain hassles. Boeing was the first commercial plane made of lightweight composite materials. It outsourced the production of its 787 Dreamliner to global suppliers causing mounting costs and delays. Caught up in its execution Boeing’s plans for the rest of its other fleet became. The Dreamliner Programme utilized the entire resources of the company, and that consumed the corporation for a long time. While Boeing had its head deep in the sand like an ostrich, so to speak, it created a perfect space for its rival company based in Europe, Airbus, to jump in and carve a blue ocean strategy to expand its market share.

Blue ocean strategy of Airbus

Airbus adopted blue ocean strategy by taking a lead in the production of fuel-efficient narrow-body jets. This resulted in more orders for its A320 neo planes than its counterpart 737MAX. Boeing’s troubles with the Dreamliner also helped Airbus win more orders of its jet A350. Boeing’s 777X is not due until 2020. This saga is a classic example of how Blue Ocean strategies can be created by carefully observing the gaps in the operations of competitors. Marketing then is a function of a company that finds the crack between the needs of the customers and the products offered in the market and plugging the gaps by introducing innovative solutions thus making the competition irrelevant.

Sales and marketing parallel

Drawing parallels from the Airbus-Boeing case study, Marketing Professionals can better align their market share strategies to fill the gaps in the market created by their competitors through close observance and thorough analysis. Sales revenue can be generated not only by satisfying customer needs but also by stepping in to fill the blanks in the target market. More often than not expansion plans of a rival company can be an opportunity for another company to service the customers left by the side by the expanding company who get carried away in the execution of plans.

If in a duopoly market like that of aircraft manufacturers that is highly regulated blue ocean strategy works one can be forgiven to believe that they can be set up in almost any market if one starts thinking out of the box. It requires an entrepreneurial spirit and innovative mind. Companies should encourage Sales and Marketing Professionals to think beyond or without the box so that their creative juices begin to pump in. Otherwise, it would be another case of Boeing Going Gone where a company that is half its age – Airbus – takes over within a matter of very short period.

To learn more about market share and how to dominate your market, consider the SMEI Certified Marketing Executive program.