Boeing vs. Airbus Essay

1580 WordsFeb 5, 20137 Pages
Topic Paper – Week 3 Boeing vs. Airbus Submitted by Melissa Mijares Prepared for Greg Gotches BUSN 6120, Managerial Economics Spring 2013 Section OB Webster University January 27, 2013 CERTIFICATE OF AUTHORSHIP: I certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course. _Melissa Mijares 01/27/2013 Signature Date There is no question that the aircraft market is a duopoly lead by Boeing and Airbus. Both companies remain in fierce competition to dominate the number one spot in the industry. Airbus has held that position since 2003. However, according to the Wall Street Journal, Boeing is threatening to take its position back and reign as number one for the first time in over a decade (Ostrower, 2013). As a duopoly, this change can prove to have a significant effect on the aircraft marketplace as well as our economy in general. As a duopoly, the entrance into the aircraft market can prove to be extremely difficult, not leaving many options for substitutes. Those that may even fathom the idea of entering the aircraft market are faced with considerably high set up costs. Cost may include, but are not limited to training, labor, personnel, and supplies, in addition to the cost of research and development and legal costs of new products. On the other hand, customers considering switching suppliers have very minimal buyer power and may also be faced with considerable costs. Such circumstances clearly clarify the high concentration in the aircraft industry. Boeing and Airbus are now both viable competitors in the aircraft market with some very distinguished differences as well as similarities. A

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