Managing Change from fallout of Political Risk:
Russian Commercial Aviation
Background: Political risk realized.
Following the break-up of the Soviet Union in the early 1990s, a crippling paralysis rapidly settled over most sectors of the economy. The ultimate political risk to a national economy had been realized – the entire collapse of a centralized management paradigm. Even basic services halted – tomato farms as well as police services could not get deliveries from suppliers, make payrolls, or collect from customers. Even such mundane activities in relatively non-integrated industries could be struck and struck hard by the lack of capital and basic finance. Vastly more complicated and capital intensive industries such as
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Principal goal: Targeting markets and product for competitive success Existing designs of medium and heavy commercial jet aircraft fail to compete with the modern designs of Europe and the US. The basic elements of aircraft construction are competitive, with state of the art airframes and sophisticated engine design. However, elements as mentioned above prevent the rapid modification of principal products. By using the existing strengths (engineering excellence, design systemization, material resources, workforce skill in fabrication), the goal is finding a market niche to leverage while developing global partnerships to improve product features. This will gain time to refine all elements of passenger jet design to eventually compete in all segments against Boeing and Airbus. To create a competitive product, the goal of the project will need to: * Design a product more in line with core competencies in the short term * Avoid direct competition with Boeing and Airbus in major market segments * Specifically address which markets, routes, carriers are potential customers * Collaboratively involve productive corporate elements- design, fabrication, marketing - in evaluating if the product can be made competitively * Identify domestic sources of new material technology – particularly composites. * Identify