Boeing and Airbus: Competitive Strategy in the Very Large Aircraft Market
Boeing and Airbus are contemplating entry into Very Large Aircraft (VLA) market. Both firms are convinced the market cannot support two players due the extremely high R&D costs and the limited (and highly uncertain) state of demand. The key strategic issue is the uncertainty surrounding Boeing's development cost: To what extent would Boeing's experience with the 747 help it reduce the R&D cost of a new VLA prototype? The main point of the case is that Boeing's strategic moves signal its private information, and that this eliminates any first mover advantage Boeing might have had in this market.
Nabil Al-Najjar, Ichiro Aoyagi, Guy Goldstein, Ted Korupp, Bin Liu, Suchet Singh
Al-Najjar, Nabil, Ichiro Aoyagi, Guy Goldstein, Ted Korupp, Bin Liu, and Suchet Singh. Boeing and Airbus: Competitive Strategy in the Very Large Aircraft Market. Case 5-404-759 (KEL022).