The overall problem at Airbus is that there is a sudden decrease in orders following Boeing's announcement of the 787 Dreamliner. This is due to Airbus' ill timed launch of the A380 leaving their financial and managerial resources exhausted as Boeing created a totally new product/market segment with the 787. Airbus has responded with the A350 that is not competitive with Boeing 787.

The root cause of the problem is market demand has shifted away from larger four engine aircraft to smaller more fuel efficient two engine aircraft. Airbus has historically followed Boeing into each market segment, however the A380 come to the market as an outdated fuel inefficient aircraft three decades after Boeing introduced the 747. Thus leaving Airbus with and outdated product and strained resources to counter the 787 threat. The root cause of the problem stems from the decision making and leadership of Gustav Humbert, CEO of Airbus.

If the problem is not corrected, the short term result will be that Boeing will dominate this new product/market segment. If this situation were to repeat itself in future product/market competitive scenarios Airbus would lose their market position against Boeing and eventually fail.

1) Boeing Threat: To what extent do you believe that Boeing will be able to successfully launch the 787? (This must be specific in terms of product risk and timeframe as it forms the basis for the balance of your answer).2) Airbus Strategy: Based on your answer thus far, what strategy should Airbus undertake? Should they continue with the A350 or go ahead with the A350 XWB? 3) Timeframe: If you elect to go with the XWB, should Airbus speed up development of the A350 XWB ahead of the 2013 estimated launch? If you elect to go with the 350 are there any other additional changes you would make to the product or launch plan? 4) Other Options: Are there any other possible strategies that they should consider? 5) Forecast: Based on your proposed strategy, realistically what do you believe the eventual outcome will be?