Instructor Manual with Case
Notes for Strategic
Management Concepts and
Cases Competitiveness and
Globalization 14th Edition By
Michael Hitt, Duane Ireland,
Robert Hoskisson, Jeffrey
Harrison (All Chapters 1-13,
100% Original Verified, A+
Grade)
Part 1: Case Notes: Case 1-22
Part 2: Instructor Manual:
Chapter 1-13
,Part 1: Case Notes All Chapters
Hitt 14e Case Teaching Notes
Case 1 The Rise and Demise of Airbus A380
Case Synopsis
Airbus and Boeing competed head to head and accounted for more than 90% of the market
share in the aircraft production industry by the end of the 1990s. With increased economic
growth, demand for large aircraft emerged, especially in Asia, which moved aviation from the
traditional point-to-point model to a newer hub-and-spoke model. This shift was supported by
larger aircraft with more seats, higher fuel efficiency, and less cost per seat for airlines.
The A380 was developed as a strategic tactic by Airbus to compete with Boeing in the very large
aircraft market. Barriers to entry in the large aircraft market were high due to the costs
involved, but Airbus management believed airlines would continue to take advantage of hub-
and-spoke systems. Early response to the A380 was promising, with more than 50 orders from
six airlines by 2001.
Seating capacity was believed to be the biggest advantage of the A380. The interior design was
flexible, allowing for different class configurations, and the cabin was considered the quietest
and most spacious available. The external market also saw benefits, with increased tourism and
sales at airport retail and restaurant outlets. However, this change also led to increased
congestion at large hub airports, and many airlines started to explore a return to point-to-point
routes with smaller aircraft.
The 2008 economic crisis and increased competition from low-cost airlines weakened prospects
for the A380. Smaller models proved more effective in meeting consumer demand and
responding to changing market conditions. This led to a decrease in sales for the A380, and
Airbus could not achieve its projected breakeven point. Airbus began to slash production of the
A380 by 2017 due to diminishing orders and shrinking backlog, and by 2019, it slashed
production to eight A380s annually, a demand dip of almost 92%. Airlines that used the A380
began to cut orders and open new point-to-point routes in favor of larger hub-and-spoke
routes.
Other factors in the external market impacted the Airbus A380 as well. In addition to changing
market conditions, a case was lodged by the World Trade Organization (WTO) against Airbus
and its chief rival Boeing over unfair subsidies to aircraft makers. Airbus ran into assembly
issues due to the huge number of suppliers, parts, and testing processes that were required to
build new production facilities from scratch, as well as those needed to make the aircraft.
Airports also had to make infrastructure upgrades, including widening runways, taxiways, and
shoulders to accommodate the larger aircraft.
Boeing, Airbus’s main competitor, began moving away from larger aircraft toward a more
competitive mid-sized wide-bodied jet, allowing Boeing to respond more rapidly to changes in
,customer demand and the increased ability of secondary cities worldwide to offer international
routes using a point-to-point model.
The A380 proved to have several disadvantages for airlines who purchased them. The aircraft
could not be filled during low peak travel periods, and only a few airports could accommodate
its size. The downtime was longer, and it had higher fuel requirements. Additionally, the aircraft
had been developed with the goal of attracting airlines in China but failed to appeal to Chinese
customers in the world’s biggest market for aircraft.
While Airbus was able to beat the competition in terms of aircraft deliveries early on, it
continued to incur losses from the A380. The aviation industry consistently offered new
technology, airframes, and engines, aiming to lower fuel burn, less noise, and more efficient
, flying. Narrow-body aircraft gained popularity and now had the advantage of extended range,
fuel efficiency, and higher maximum take-off weight. Boeing responded to the A380 with its
own innovative B787 Dreamliner.
Today, Airbus boasts the development of three environmentally friendly commercial aircraft
and continues to protect its market share despite the failure of the A380 and a turbulent two-
year period when the COVID-19 pandemic reduced industry profits and disrupted customer-
facing processes. The company will need to continue to develop market-sensing competencies
to respond to the increasing demand for narrow-body aircraft that support point-to-point
routes originally believed to represent significantly less potential than the hub-and-spoke
model but now represent the future of flight.
Learning Objectives
● Define strategic competitiveness, strategy, competitive advantage, above-average
returns, and the strategic management process. (Chapter 1)
● Describe the competitive landscape and explain how globalization, technological
changes, and expectations of socially responsible behavior shape it. (Chapter 1)
● Describe strategic leaders and what they do. (Chapter 1)
● Explain the importance of analyzing and understanding the firm’s external environment.
(Chapter 2)
● Define and describe the general environment and the industry environment. (Chapter 2)
● Discuss the four parts of the external environmental analysis process. (Chapter 2)
● Name and describe the general environment’s seven segments. (Chapter 2)
● Identify the five competitive forces and explain how they determine an industry’s
profitability potential. (Chapter 2)
● Define strategic groups and describe their influence on firms. (Chapter 2)
● Describe what firms need to know about their competitors and different methods used
to collect intelligence about them. (Chapter 2)
● Define capabilities and discuss their development. (Chapter 3)
● Describe four criteria used to determine if resources and capabilities are core
competencies. (Chapter 3)
● Explain how firms analyze value chains to determine where they are able to create value
when using their resources, capabilities, and core competencies. (Chapter 3)
● Discuss the relationship between customers and business-level strategies in terms of
who, what, and how. (Chapter 4)
● Explain focus strategies as a business-level strategy, including the associated risks.
(Chapter 4)
● Define competitors, competitive rivalry, competitive behavior, and competitive
dynamics. (Chapter 5)
● Describe market commonality and resource similarity as the building blocks of
competitor analysis. (Chapter 5)
Notes for Strategic
Management Concepts and
Cases Competitiveness and
Globalization 14th Edition By
Michael Hitt, Duane Ireland,
Robert Hoskisson, Jeffrey
Harrison (All Chapters 1-13,
100% Original Verified, A+
Grade)
Part 1: Case Notes: Case 1-22
Part 2: Instructor Manual:
Chapter 1-13
,Part 1: Case Notes All Chapters
Hitt 14e Case Teaching Notes
Case 1 The Rise and Demise of Airbus A380
Case Synopsis
Airbus and Boeing competed head to head and accounted for more than 90% of the market
share in the aircraft production industry by the end of the 1990s. With increased economic
growth, demand for large aircraft emerged, especially in Asia, which moved aviation from the
traditional point-to-point model to a newer hub-and-spoke model. This shift was supported by
larger aircraft with more seats, higher fuel efficiency, and less cost per seat for airlines.
The A380 was developed as a strategic tactic by Airbus to compete with Boeing in the very large
aircraft market. Barriers to entry in the large aircraft market were high due to the costs
involved, but Airbus management believed airlines would continue to take advantage of hub-
and-spoke systems. Early response to the A380 was promising, with more than 50 orders from
six airlines by 2001.
Seating capacity was believed to be the biggest advantage of the A380. The interior design was
flexible, allowing for different class configurations, and the cabin was considered the quietest
and most spacious available. The external market also saw benefits, with increased tourism and
sales at airport retail and restaurant outlets. However, this change also led to increased
congestion at large hub airports, and many airlines started to explore a return to point-to-point
routes with smaller aircraft.
The 2008 economic crisis and increased competition from low-cost airlines weakened prospects
for the A380. Smaller models proved more effective in meeting consumer demand and
responding to changing market conditions. This led to a decrease in sales for the A380, and
Airbus could not achieve its projected breakeven point. Airbus began to slash production of the
A380 by 2017 due to diminishing orders and shrinking backlog, and by 2019, it slashed
production to eight A380s annually, a demand dip of almost 92%. Airlines that used the A380
began to cut orders and open new point-to-point routes in favor of larger hub-and-spoke
routes.
Other factors in the external market impacted the Airbus A380 as well. In addition to changing
market conditions, a case was lodged by the World Trade Organization (WTO) against Airbus
and its chief rival Boeing over unfair subsidies to aircraft makers. Airbus ran into assembly
issues due to the huge number of suppliers, parts, and testing processes that were required to
build new production facilities from scratch, as well as those needed to make the aircraft.
Airports also had to make infrastructure upgrades, including widening runways, taxiways, and
shoulders to accommodate the larger aircraft.
Boeing, Airbus’s main competitor, began moving away from larger aircraft toward a more
competitive mid-sized wide-bodied jet, allowing Boeing to respond more rapidly to changes in
,customer demand and the increased ability of secondary cities worldwide to offer international
routes using a point-to-point model.
The A380 proved to have several disadvantages for airlines who purchased them. The aircraft
could not be filled during low peak travel periods, and only a few airports could accommodate
its size. The downtime was longer, and it had higher fuel requirements. Additionally, the aircraft
had been developed with the goal of attracting airlines in China but failed to appeal to Chinese
customers in the world’s biggest market for aircraft.
While Airbus was able to beat the competition in terms of aircraft deliveries early on, it
continued to incur losses from the A380. The aviation industry consistently offered new
technology, airframes, and engines, aiming to lower fuel burn, less noise, and more efficient
, flying. Narrow-body aircraft gained popularity and now had the advantage of extended range,
fuel efficiency, and higher maximum take-off weight. Boeing responded to the A380 with its
own innovative B787 Dreamliner.
Today, Airbus boasts the development of three environmentally friendly commercial aircraft
and continues to protect its market share despite the failure of the A380 and a turbulent two-
year period when the COVID-19 pandemic reduced industry profits and disrupted customer-
facing processes. The company will need to continue to develop market-sensing competencies
to respond to the increasing demand for narrow-body aircraft that support point-to-point
routes originally believed to represent significantly less potential than the hub-and-spoke
model but now represent the future of flight.
Learning Objectives
● Define strategic competitiveness, strategy, competitive advantage, above-average
returns, and the strategic management process. (Chapter 1)
● Describe the competitive landscape and explain how globalization, technological
changes, and expectations of socially responsible behavior shape it. (Chapter 1)
● Describe strategic leaders and what they do. (Chapter 1)
● Explain the importance of analyzing and understanding the firm’s external environment.
(Chapter 2)
● Define and describe the general environment and the industry environment. (Chapter 2)
● Discuss the four parts of the external environmental analysis process. (Chapter 2)
● Name and describe the general environment’s seven segments. (Chapter 2)
● Identify the five competitive forces and explain how they determine an industry’s
profitability potential. (Chapter 2)
● Define strategic groups and describe their influence on firms. (Chapter 2)
● Describe what firms need to know about their competitors and different methods used
to collect intelligence about them. (Chapter 2)
● Define capabilities and discuss their development. (Chapter 3)
● Describe four criteria used to determine if resources and capabilities are core
competencies. (Chapter 3)
● Explain how firms analyze value chains to determine where they are able to create value
when using their resources, capabilities, and core competencies. (Chapter 3)
● Discuss the relationship between customers and business-level strategies in terms of
who, what, and how. (Chapter 4)
● Explain focus strategies as a business-level strategy, including the associated risks.
(Chapter 4)
● Define competitors, competitive rivalry, competitive behavior, and competitive
dynamics. (Chapter 5)
● Describe market commonality and resource similarity as the building blocks of
competitor analysis. (Chapter 5)
