Airbus A3XX- Developing the World's Largest Commercial Jet (A) Case Study

Airbus A3XX- Developing the Worlds Largest Commercial Jet (A) - Case Study ExampleIt is evidently clear from the watchword that there was a risk in terms of the upfront investment required for the project and in like manner the uncertainty of remove, do this decision are a critical and daunting one. The response on the introductory orders had been a positive one but the hitch being the fact that initial orders do non imply long-term demand. As it is launch customers are offered hefty initial discounts. The delivery was not to return place before 2006 and there were very airlines that were willing to order more planes 5-6 years in advance. This made it even more difficult for Airbus to decide on the launch if it could not reach its pre-launch target of 50-100 orders. The air travel industry is a very risky one. There is no grey in this industry its either black or white. Every 3-4 years, one has to put the business at a hazard and if a launch failed then the consequences can be as drastic as culminating into an exit demand from the industry. In recent years, companies like Glen Martin, General Dynamics, and Lockheed have met the same fate. Irrespective of the risks lying leading of it, Airbus went ahead with the launch. Now the deal would be to rectify and work upon the issues on the way and ensure that the launch is successful. Boeing which would be one of its biggest competitors would also have something ready up its sleeves to counter the launch. This threat can also be not denied. They would bring down the prices of their 747s or come up with a new version of 747. Given, their lieu in the industry, Airbus will have to counter the threat received from their end. Even the projected costs of the gamble have been stipulated to be 13 jillion dollars some critics believe that it would shoot up to 15 billion dollars. The financial success of Airbus thus depends on their ability to drive enough early sales foot through the learning curve effect.