TO: Boeing’s CEO
SUBJECT: Airbus and Boeing
The Kind of rivalry between Airbus and Boeing
The rivalry between Airbus and Boeing is a competitive rivalry. Boeing appears to be a monopoly, and Airbus was intending to challenge its monopoly. Both companies are in the industry, that is, the aircraft industry; one (Boeing) appears to be ahead of the other (airbus). As Airbus tries to grow in the industry, it becomes a threat to Boeing. The decision made by one firm influences the decisions to be made by the other firm and their performance; in this case, if Airbus decides not to implement its proposed project them Boeing will benefit for many years. Every firm aims at leading in the industry and maximizing its revenue.
Another factor that makes this rivalry a competitive rivalry is the fact that a firm makes its intention and developments known to the other firm so as to examine their response to those decisions and developments. This competitive rivalry is very risky since it entails engaging in risky developments such as Airbus was making a decision of developing the world’s first commercial superjumbo jet in order to challenge Boeing’s monopoly in the industry. The action taken by Airbus is an action that initiates the competition in the aircraft industry.
The rivalry is competitive also because the two firms have resource similarity. Both firms are developing aircrafts, and they also aim at developing large…
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