Airbus predicament

Introduction

The long-term strategic purpose of Airbus is in its company strategic vision of creating the best and the safest aircraft. The mission statement supports this purpose that follow the principle of meeting the needs of airlines and operators through producing the most modern and comprehensive aircraft on the market. The success of an airplane company normally depends on its commitment to service customers with high safety and top quality. In this paper, I provide a discussion focused on the critical issues that Airbus is facing, which is affecting the relationship of the company with its investors and also damaging the image of the company. The paper aims to provide a strategic plan that contains solutions to the problems described that will help resolve the situation at the company.

Problem

 Airbus deals in producing jetliners and aircraft that have a huge passenger capacity and also unique intrinsic design. However, in the recent time, the company has been facing some critical issues that are of much concern to the top management. The problem that exists is that there is an increasing number of accidental cases resulting to the questioning of the safety and quality provisions of the planes that the company manufactures; there is also weak public relation because of incompetence of the company to communicate properly with its stakeholders. Airbus also has a drop in the sales because of poor performance in the marketing department. Another critical issue is the failure of timely delivery of orders that are already sold by the company and decreasing profits due to inappropriate pricing strategy. There is also the threat of an increase in gasoline costs, which the company is considering managing through charging high flying process for passengers that compromise the service efficiency.

Strategic plan

So as to restore its reputation and its competitive edge, Airbus should focus on enhancing its efficiency, innovation, customer responsiveness, and quality. Based on the issues facing Airbus, it is evident that the main problem affecting the company is operational inefficiency. Efficient operations normally result to benefits such as cost containment and performance that exceeds or meets the customer obligation (Mankiw, 2014). The efficient operations do not just happen, and airlines tend to face a myriad of operational challenges including limited resources, schedule disruption, and increasing customer expectations.

The operational inefficiency at Airbus is causing challenges such as poor work quality, poor safety standards, disruptions in production, and poor coordination among departments. As a result, the inefficiency is affecting the work processes of the sales department, marketing department, and also the production department (Watersm 2006). Boeing is a major competitor of Airbus and because of the operational inefficiency at Airbus; it is creating a way for Boeing to excel in its operations resulting in a decrease in sales and profitability at Airbus.

At Airbus, the cost of fuel is a major challenge and also a critical impediment to profitability. The increasing prices of fuel also have a significant revenue, cost, or operational impact on the business (Watersm 2006). In regards to the high costs of fuel, Airbus is considering the need for managing the issue through increasing ticket fares because of the competition to maintain customer satisfaction and loyalty. Increasing the ticket fair should only act as a short-term objective. However, the company should consider identifying the poor-performing aircraft and making some mechanical adjustments so as to help reduce drag, which will result in a reduction in fuel usage (Yu, 2012). There is an ongoing, long-term solution to fuel saving and Airbus needs the solution now. The aerospace industry is continuing to design and enhance the airframes and engines that will improve performance while it is improving fuel efficiency (Wu 2012). There is also a short-range alternative to help save fuel through reducing the flight time. The air traffic control needs to search for a method to decrease the flight time through having more direct routes and also improve the procedures resulting from new technology.

Airbus should also consider improving its marketing strategy. Boeing is a tough competitor, and for Airbus to be competitive in the industry, it should consider improving its marketing. It is essential for Airbus to implement a media strategy that will promote the brand through direct mail, promotion, newspapers, and television. The TV advertisements can consider the endorsement of celebrities who have never before appeared in advertising. When using such a strategy, it can help to communicate the benefits of flying upper class as the only best choice for business travelers that will help to increase the number of tickets for business travelers (Mankiw, 2014). Airbus should move forward in using branding in the high competitive service industry that will create a series of association, values, and positive perceptions. The brand values will also help in influencing the choices that the airline travelers across the world make.

Safety is a top priority at Airbus including delivering the aircraft on time, on quality, and on cost. The Airbus customers normally expect quality in the aircraft that they buy. The safety, reliability, maintenance cost and comfort are the key areas where quality if crucial in the judgment of an aircraft. When customers are using Airbus, they usually trust the airline to get them safely to their destination. Safety is extremely important. In the recent years, Airbus had been having some cases regarding accidents and evidence show that crews not fully trained are flying Airbus planes. The quality and safety are essential to the reputation of the company (George, 2015).  Airbus need to develop a program that will provide a full range of flight training including basic and extended pilot training and also programs for examiners and instructors.  Providing better training to the crew members can help reduce the aircraft accidents; however, the process would cost the company money (Peteraf et al. 2011). Ensuring safety is critical in the airline business and even though the training program will be expensive, it is worth in ensuring customer satisfaction and a good reputation for the company.

Airbus is also facing the issue of delay in delivery of planes purchased and not yet delivered. A delay in the delivery schedule can be very bad for the company. A strategy that Airbus can use to improve the problem is through improving its supply chain visibility. The delay in the supply of planes is as a result of the lack of supply chain visibility. Without the timely and accurate information regarding the supply chain structure and the development progress on each supplier site, the value of the product Airbus is selling will be compromised. Thus, to improve delivery, Airbus needs to ensure that all suppliers and strategic partners should provide all information in the supply chain relationship so as to communicate accurately and ensure the timely delivery of products.

Conclusion

Airbus need to consider the above strategies outlined that will help the company to improve its operation and also be competitive in the industry. Airbus needs the above strategy so as to compete successfully and also strengthen its prospects for the long-term company success.

Reference

Gamble, J., Strickland, A., Peteraf, M (2011). Crafting & Executing Strategy McGraw-Hill Education

George, F (2015). Why pilots need more than simulator training. 

Mankiw, N (2014). Brief principles of macroeconomics. Cengage Learning

Watersm D (2006). Operations strategy. Cengage Learning

Wu L (2012). Airline operations and delay management. Ashgate Publishing

Yu, G (2012). Operations research in the airline industry  Springer Science & Business Media

Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in cheap term papers if you need a similar paper you can place your order from top research paper writing companies.