Case Study

BOEING 737 MAX: DETHRONED BY COMPETITIVE

RIVALRY?

Submitted By:
Uzair Khalid

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Submitted To:

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Course:
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Strategic Marketing
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 Q1. How was the airbus likely to be impacted by the Boeing crisis? Explain
Answer: After the crash of Boeing the management of Airbus instructed its sales staff not to
mention the fatal crashes of the 737 MAX in their sales pitches to customers. Most of the
airlines decline the orders of Boeing 737 MAX and Airbus wants to capitalize on the
opportunity by getting the orders but they don’t have enough production capacity. Airbus has
struggled with production issues for many of its jets, making it difficult to ramp up output of
the A320. Customers of Boeing had the option of switching orders to Airbus, but doing so
would involve waiting in a queue for approximately three years for the new A320neo planes.

Q2. How were airlines impacted due to the grounding of 737 Max 8? What
key challenges remained for Boeing after the crisis?
Answer: In March 2019, all major countries in the world, including the US, Canada, the UK,
Germany, Singapore, China, and India, had grounded the 737 MAX 8. By grounding these

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planes, airlines have a shortage of planes and disturbed routes. Customers may be tempted to

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cancel orders on the MAX but they would most likely forfeit the cash advances they already

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made to Boeing. Overall, airlines in Asia suffered the most because of the grounding, as
airlines from the Asian continent had made the largest orders for the 737 MAX series.

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The Challenges for the Boeing after the crisis is to regain the support and trust of airlines and
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passengers.
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Q3. Did Boeing crisis evolve due to competitive rivalry?

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Answer: Yes, Boeing crisis evolve due to competitive rivalry. They were in a hurry as The
737 MAX series was developed in response to the world’s best-selling aircraft, the Airbus
A320 (A320), which was also the most fuel-efficient, single-aisle aircraft. They introduced
the Technologies like AOA (Angle of Attack) & MCAS (Maneuvering Characteristics
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Augmentation System). There were lot of flaws in the technology and in the design of the
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Boeing 787 Max. Moreover, Boeing did not offer training for pilots on the 737 MAX 8
aircraft, which was first launched in 2017.
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Q4. What Recovery process does Muilenburg need to follow after the self-
inflicted harm to the company?
Answer: Muilenburg was confident that the 737 MAX could be back in service by October
2019. He was, however, concerned about regaining the support and trust of airlines and
passengers. Boeing engineers need to work on fixing the software problem and the design
flaws. Changes were also made in the MCAS software. Boeing faced the challenge of
convincing the public about the safety of the 737 MAX series planes once it was re-certified.
According to experts, one critical way of regaining trust would be rebranding the 737 MAX
series. However, Muilenburg rejected any such strategy and says, “We’re not focused on
branding and marketing. We’re focused on safety”.

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