Case:
Airbus's Predicament
The Airbus company is facing some very bad news. A number of ugly incidents are worrying top management and bringing difficulty with investors. Your job is to use your skill as an MBA candidate and devise a specific plan to improve their situation.
You must first understand the situation by reading articles in The Wall Street Journal and other publications. This situation calls for clear action. Hence, you cannot take the view that the situation is too complex or that you do not have enough information. That would be unworthy of an MBA candidate!
Here are some major issues to consider.
1. The recent Airasia plane crash involved an Airbus plane. While no one is blaming Airbus yet, it is a very bad situation. Many people were killed. There will be doubts about airplane safety. Airbus's main concern is the safety of the plane itself. However, Airbus planes flown by crews that are not fully trained would also be a bad reflection on the company. Quality and safety are critical to a company's reputation.
2. It is widely thought that Airbus has made "deals" with governments that selected Airbus over Boeing. This may come to light and would damage the image of the company. It suggests unfair competition particularly with developing countries where bribery is more common than in the US or Western Europe. This has a public relations aspect - avoiding or tamping down bad news.
3. Boeing is a tough competitor. Maybe Airbus should increase its advertising and marketing. After all, marketing is very important.
While Airbus has made a spectacular rise in recent decades, one can never rest. Airbus's stock has dropped more than 25% in roughly the last six months. Boeing's stock has done pretty well over the last twelve months. What could cause this difference between the two companies? More ad's on TV or other marketing efforts might help in these difficult times.
4. The specific number of airplane sales and the delivery schedule may be the most important issue the company faces. Sometimes bad news blows over. People may have "short memories" about airplane crashes. Perhaps Airbus should downplay recent crashes and focus on delivering the planes that were purchased but not yet delivered.
Failing to deliver on schedule is very bad for a company's reputation.
5. Gasoline cost is a big issue for airline companies. It has been suggested that Airbus work doggedly to improve airplane efficiency - lowering the cost of flying passengers. Profit for the airline companies Airbus serves is important.
6. Another view is that Airbus is fine; it simply needs to sell at the right price in the right manner. This view holds that the Boeing 737 and the Airbus 320 are both very good planes. There are differences in cost, passenger capacity, operating costs and other matters. Maybe Airbus should lower prices or otherwise fine tune how it sells its planes. This view also holds that customer preferences are fickle. People may like one airline because it gives better peanuts. The real issue is the profit of the airlines.
Further Instructions:
There are many issues to look at in this case. You must read about the topic and formulate a credible "solution" that will please top management of Airbus.
1. When you identify a solution, evaluate all alternatives. Select one -
2. Be specific. Give facts. Do not rely on opinion. Quote credible
3. Use the Problem—Solution —Benefits format to solve the the best - alternative and develop a comprehensive plan to carry it out.
Sources. Don't use expressions such as "People say..."
Problem. Do not create a paper that merely describes the problem. Your problem description should not exceed one page. Do not waste time defining the problem or the history of the company as told in Wikipedia. You must SOLVE the problem.