Essay about Project Managenet

595 Words Sep 17th, 2014 3 Pages
1. What are the dynamics of competition in the commercial aircraft industry?

a. The high cost of product development leads to a high break-even point.

Initially in the aircraft industry, projects required much less time and money to develop each project. As time progressed as well as technology, the costs and demands on the aircraft system increased. Before the 1980’s within the commercial aircraft industry, there were a number of large manufactures including Boeing, McDonnell Douglas, Airbus and Lockheed. Boeing’s decision to bet the entire company on the wide bodied 747 decimated all other American commercial aircraft competition. The 747 became in so much demand that it dwarfed McDonnell Douglas into a merger with Boeing and
…show more content…
c. The need to establish economies of scale helps to reduce costs.

The original aerospace companies before and after the 80’s were well known not just for their attempts at aviation but also as major defense prime contractors. As many companies throughout the world look for other work it allows more revenue over more departments that can be gathered for larger projects. The loan and gathering of revenue to develop the 747 aircraft which crippled the other aerospace companies was only possible by the current widespread workforce that Boeing had.

As costs to fund programs can be found by large distribution and loans, when distributing these costs over a large and diverse company the direct costs will inherently be lower than if over fewer departments and a smaller company viewed by Banks providing loans.

d. The need to establish steep learning curves limits entry into the industry to a few giant firms.

The entry into a specialized field such as aerospace engineering warrants great technical capability from many employees to be able to appropriately work together and develop a certain product. Additionally, the uniqueness of the aviation industry especially on the large scale would only thrive through a long and steady growth of a small company gaining experience over a long period until it is able to take on a project such as a commercial airliner.

The difficulty is also exacerbated by

Related Documents