Title:	Airbus and Boeing in China: Risk of Technology Transfer?
Author(s):	Prof Ashok Som & Guilaume Poutrel
University:	ESSEC Business School, Paris-Singapore
Abstract:	Boeing was the leader in the aircraft industry. In the late 90's, Airbus could catch up with Boeing. Today the two companies fight fiercely and hold about 50 percent of the global market. Slowly, the battlespace between these giants is being focused in China. Leadership challenge in China, in the next decade would be crucial for gaining market share in the global arena, as China's airspace will be the second largest in the world. Airbus was the first entrant in the Chinese market and followed a strategy of cooperation whereas Boeing chose a late-entrant strategy. Both the first and the late-entrant strategy had its pros and cons and especially so because of the risk of technology transfer. On the one hand, companies preferred protecting their innovations and technology through IPR laws but it faced a huge risk in China where IPR laws were not yet well established. Also the Chinese State dealt with foreign direct investments (FDIs) to maximize the knowledge and transfer of technology to its State Owned Enterprises (SOEs) for the betterment of its domestic labor. On the other hand China was a market that could not be ignored due to its opportunities and growth potential. The case highlights and provides a moot point where two seemingly divergent strategies were followed by two leading manufacturers of aircrafts in the past decade. The case discusses the (a) evolution of Boeing and Airbus in China (b) the demand created by the specificities of the Chinese market (c) innovation and adaptation in their products offerings (d) maintaining their supply chain and (e) their divergent strategies vis-à-vis technology transfer.
Publication Details:	Published
Pub/Rev Date:	September 2006
Case Length:	16 pgs
Teaching Note:	Yes, 24 PPT Slides
Pages (TN):	16 pgs
Subjects:	Management of Technology and Innovation
Issues:	Strategy, competition, demand & supply, technology transfer, risk, bargaining, aircraft industry, China
Country:	Europe: France, Germany, UK, China
Period Covered:	2000-2006
Industry:	Airlines and Aviation
Level:	Undergraduate & Postgraduate
Links of Interest:	–