Airbus vs. Boeing in superjumbos
Subtitle: a case of failed preemption
By: Benjamin C. Esty and Pankaj Ghemawat
Contributors: Ghemawat, Pankaj; Harvard Business School. Division of Research
Series: Working paper / Division of Research, Harvard Business School -- 02-061; Working paper (Harvard Business School. Division of Research) -- 02-061
Publisher: Division of Research, Harvard Business School
Published: 2002
Place of publication: Boston
Language: eng
Number of pages: 64
Subjects: Aircraft industry; International Competition; Airbus Industrie; Boeing Aerospace Company
Description: This paper looks at competitive interactions between Airbus and Boeing in very large aircraft. It concludes that Boeing attempted to preempt Airbus in introducing a new product in this space but failed to do so because of the incredibility, given the assumption of value maximization, of self-cannibalization. A theoretical model is used to illustrate this credibility constraint, and an assortment of evidence -- involving pro forma financial valuations, product market data (on prices and quantities), capital market reactions to key events, and qualitative information on Boeing's organizational structure and recent changes to it -- is assembled to support the hypothesis that the constraint on self-cannibalization ultimately proved decisive.
Notes: "August 3, 2001. Rev. February 14, 2002."

Includes bibliographical references.