Abstract
When two or more firms engage in a merger, it is usually a highly complex and challenging transaction. It is common wisdom that approximately 50% of all mergers are considered failures. In an international merger, the potential difficulties are often even greater, and they can be due to, for instance, cultural, geographic, or economic differences. The case of Airbus represents a cross-border merger with additional complexity mainly because of idiosyncrasies in the industry environment, such as the strong involvement of political and governmental actors. Therefore, since its inception, Airbus has not only faced fierce competition with its powerful U.S. rival, Boeing, but also constantly struggled with the legacy of being the result of an international merger. The present case will outline some antecedents and consequences of the Airbus merger and discuss the major challenges of Airbus’ international configuration and coordination strategies.
Parts of this case are based on Schmid et al. (2013).
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Notes
- 1.
See Harrison (2011, p. 373).
- 2.
See Braunberger (2006, p. 43).
- 3.
- 4.
- 5.
See Braunberger (2006, p. 30).
- 6.
See Airbus Group (2015b).
- 7.
See Braunberger (2006, p. 14).
- 8.
- 9.
See Wright (1994, p. 6).
- 10.
- 11.
See Airbus Group (2015b).
- 12.
See Braunberger (2006, p. 109).
- 13.
- 14.
See EADS (2001, pp. 2–3).
- 15.
See Barmeyer and Mayrhofer (2010, p. 3).
- 16.
Deckstein and Hawranek (1999, p. 129), translated from German.
- 17.
See Braunberger (2006, p. 121).
- 18.
See Barmeyer and Mayrhofer (2010, pp. 4–7).
- 19.
See Deckstein and Hawranek (1999, p. 130).
- 20.
See Barmeyer and Mayrhofer (2010, p. 5).
- 21.
- 22.
For this paragraph, see Schmid et al. (2013, pp. 75–82).
- 23.
While we focus on the configuration of production activities, other value chain activities are also dispersed within MNCs in general and within Airbus in particular. See Grosche (2012), Kutschker and Schmid (2011, pp. 998–1008) or Schmid and Grosche (2009). Dispersed R&D activities have been investigated, for instance, by Gerybadze (1997).
- 24.
See Noack (2007, p. 13).
- 25.
- 26.
See Noack (2007, p. 13).
- 27.
See Deckstein et al. (2004, p. 90).
- 28.
See Gordon (2014).
- 29.
See Anonymous (2006a).
- 30.
- 31.
See Anonymous (2007a).
- 32.
See Mönninger (2006, p. 33).
- 33.
See Alich (2006, p. 11).
- 34.
- 35.
See Braunberger (2006, p. 215).
- 36.
Anonymous (2007a).
- 37.
See Daly (2006).
- 38.
- 39.
See Mönninger (2006, p. 33)
- 40.
See Noack (2007, p. 13).
- 41.
See Anonymous (2007b).
- 42.
See Gordon (2014).
- 43.
Airbus Group (2007).
- 44.
Kiani-Kress and Bläske (2009, p. 61).
- 45.
See Schubert (2007, p. 12).
- 46.
See EADS (2008).
- 47.
- 48.
See Mack (2009).
- 49.
See Airbus Group (2015b).
- 50.
- 51.
See Airbus Group (2015d).
- 52.
See IATA (2014).
- 53.
See Mester (2015).
- 54.
See Anonymous (2013).
- 55.
- 56.
See Michaels et al. (2012).
- 57.
See Michaels et al. (2012).
- 58.
- 59.
See Airbus Group (2014a, p. 54).
- 60.
- 61.
Airbus Group (2013).
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Questions
Questions
-
1.
To compete with the powerful U.S. rival Boeing, the companies Aérospatiale, DASA and CASA merged to EADS, with Airbus as a subsidiary.
-
(a)
Please discuss the advantages and disadvantages of an international merger in general.
-
(b)
Which of these advantages and disadvantages are particularly important in the specific case of EADS/Airbus? Please back up your statements with appropriate reasoning.
-
(a)
-
2.
EADS’ initial top management structure was very different from conventional management structures in large, stock-market oriented firms.
-
(a)
What are the advantages and disadvantages of a dual structure with two chairmen and two CEOs in a merged company?
-
(b)
In 2006, EADS’ top management had to respond to a sudden crisis in the wake of the A380 delay. Do you think the dual leadership structure hindered an effective crisis management? Please back up your reasoning by appropriate arguments.
-
(a)
-
3.
In 2008, Airbus opened a production site in Tianjin, China.
-
(a)
What might have been the reasons for Airbus to choose China for its first final assembly line outside Europe? Please find several potential reasons and try to present them in a structured way by using established categories on internationalization motives/objectives.
-
(b)
Airbus has vast experience in the manufacturing of aircraft. However, the Tianjin plant was set up as a joint venture between Airbus and Chinese partners. What could have been the rationale for this approach, and what are the risks associated with this approach?
-
(a)
-
4.
Please imagine that you are a consultant for Airbus and that your task is to develop Airbus’ future internationalization strategies. Based on a strategic analysis, which internationalization strategies would you recommend for the next ten years? Please make sure to back up your recommendations with reasonable arguments derived from your strategic analysis.
Please note that, for some of the questions, the case study is only a starting point. You will have to search for additional information to answer the questions.
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Schmid, S., Altfeld, F. (2018). Airbus: Managing the Legacy of a Complex International Merger. In: Schmid, S. (eds) Internationalization of Business. MIR Series in International Business. Springer, Cham. https://doi.org/10.1007/978-3-319-74089-8_3
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