Case Analisys : Airbus in China
MREJEN Corentin
Wednesday, October 10 2012
Case Analysis: Airbus in China
1. Identify the key management issues facing Airbus in China.
Since 1985, cooperation between Airbus and China covers the commercial, industry and research sectors. Laurence Barron, president of Airbus China since January 2004 is willing to expand this cooperation with Chinese aviation industry. Heading this way, a joint venture was launched in September 2008 owned by the European aircraft-maker for 51%, with the remaining 49% held by a Chinese consortium that comprises Tianjin Free Trade Zone (TJFTZ) and China Aviation Industry Corporation (AVIC). In addition, already six Chinese companies are involved in manufacturing parts of the Airbus jet liners, adding a strong “Chinese flavor” to the big airplane family. Airbus in China faces many management issues that I’m going to identify. First, since June 2011, the state-owned manufacturer Comac (Commercial Aircraft Corporation of China) entered into competition with both aircraft companies Boeing and Airbus by presenting its new aircraft: the C919. This became possible because of the technology transfer induced by the many aircraft companies’ joint-ventures created these past decades in China. Comac benefited from this efflux and will probably be able to compete with the experienced eastern companies. This was led by the strategy of most companies that consisted in assembling many parts of their aircraft in China. The stateowned company will benefit from many advantages since it knows its market better than any foreign company and that the government has a lot of power in China. In addition, language and cultural barriers, such as the “Guanxi” which relates to social networking and interactions between Chinese people will play in favor of the new local company that will be able to sort out the best agreements and manage their employees with efficiency. Other issue faced by Airbus is their relationship with the Chinese government.
Wednesday, October 10 2012
Case Analysis: Airbus in China
1. Identify the key management issues facing Airbus in China.
Since 1985, cooperation between Airbus and China covers the commercial, industry and research sectors. Laurence Barron, president of Airbus China since January 2004 is willing to expand this cooperation with Chinese aviation industry. Heading this way, a joint venture was launched in September 2008 owned by the European aircraft-maker for 51%, with the remaining 49% held by a Chinese consortium that comprises Tianjin Free Trade Zone (TJFTZ) and China Aviation Industry Corporation (AVIC). In addition, already six Chinese companies are involved in manufacturing parts of the Airbus jet liners, adding a strong “Chinese flavor” to the big airplane family. Airbus in China faces many management issues that I’m going to identify. First, since June 2011, the state-owned manufacturer Comac (Commercial Aircraft Corporation of China) entered into competition with both aircraft companies Boeing and Airbus by presenting its new aircraft: the C919. This became possible because of the technology transfer induced by the many aircraft companies’ joint-ventures created these past decades in China. Comac benefited from this efflux and will probably be able to compete with the experienced eastern companies. This was led by the strategy of most companies that consisted in assembling many parts of their aircraft in China. The stateowned company will benefit from many advantages since it knows its market better than any foreign company and that the government has a lot of power in China. In addition, language and cultural barriers, such as the “Guanxi” which relates to social networking and interactions between Chinese people will play in favor of the new local company that will be able to sort out the best agreements and manage their employees with efficiency. Other issue faced by Airbus is their relationship with the Chinese government.