The aerospace industry has undergone tremendous change in recent years. Always something of an anomaly, due to its critical role in national economies and in national security, the sector has always been distinct from other manufacturing industries in its reliance on high-technology innovation and the shifting sands of private and public investment. Since the end of the Cold War, financial and other crises have led to a spate of mergers and acquisitions, leaving fewer and fewer players in the commercial airplane industry. Meanwhile, some firms exited the business altogether. State-owned companies have been privatized, national firms have been consolidated in some countries, and the first transnational aeronautics conglomerate in Europe, EADS, was founded in 1999. Those left standing must strive to exploit international alliances and their network of horizontal and vertical collaborations in order to gain long-term competitive advantage. How to harness both management strategies and marketing tactics to the cause in the commercial airplane industry is the subject of this book.
Primary among the challenges faced by firms is industrial rationalization. How do corporate leaders who are charged with managing newly merged companies integrate distinct corporate cultures, rationalize operations and activities, and eliminate duplication of product and function, while maintaining their focus on gaining competitive advantage in the marketplace? The answer depends on the nature of the firm. Single-sector companies have the advantage of being lean, agile, and quick to react to market forces, while multisector companies have the potential to exploit synergistic relationships among divisions, economies of scale, financial strength, and the balancing of risk. These factors affect companies’ behavior not only at the strategic level, but also at the tactical level. This book provides scholars of strategic marketing and management, as well as executives and decision makers in commercial aviation, with the industry background necessary to understand the aeropsace companies’ struggle for survival in the newly restructured market.