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  • #121
    Originally posted by DanS


    Well, to be fair, they're following their own prescriptions. They canned their own superjumbo.

    As for making business decisions in the absence of a market, don't you think it's rather like playing Russian Roulette? Just because you did it last time and were successful doesn't mean you should do it this time.

    Anyway, they are taking risks, just in a different area. The new 7E7 doesn't have any orders yet. But the risk is assumed to be smaller, considering that it targets discount carriers, a proven and growing market.
    How do you conduct a market research on a market that doesn't yet exist? You can't. That was the genius of Boeing, they created new markets instead of staying within the boundaries of existing ones.
    McDonnel Douglas was a firm that acted upon certain market demands and the result was that they discounted the viability of civilian jets. The result was that they lost market leadership in civil aviation, ultimately being taken over by Boeing.

    IMO, in order to obtain and maintain market leadership in a market that demands a long term vision (and a long term is by definition uncertain) you're required to take big bets and keep on taking big bets.

    I'm not claiming Airbus is a shining example when it comes to visionary projects. The superjumbo won't create a new market. However it does take civil aviation to a next level.
    Take Boeing's Sonic Cruiser, it was a only reaction on an initiative of Airbus, and secondly they didn't pursue it. The extended 747 was laughable. So now they're pretty much left with nothing but a plane that promises to be more efficient that others. And I don't believe that such a project will ensure you market leadership with a decade or two.
    DISCLAIMER: the author of the above written texts does not warrant or assume any legal liability or responsibility for any offence and insult; disrespect, arrogance and related forms of demeaning behaviour; discrimination based on race, gender, age, income class, body mass, living area, political voting-record, football fan-ship and musical preference; insensitivity towards material, emotional or spiritual distress; and attempted emotional or financial black-mailing, skirt-chasing or death-threats perceived by the reader of the said written texts.

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    • #122
      People do market research for new innovations all the time duckie.

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      • #123
        Originally posted by TCO
        I don't know that the recent scandals and such had anything to do with the decision not to do the superjumbo. I think it has more to do with conservatism (perhaps smart perhaps chicken****) from the poor business in aircraft over the past few years.
        I think both are symptons of conservatism. It's safer to cosy up up with govt officials and shareholders than to come up with revolutionary designs and pursue them.
        I don't believe conservatism is dumb, it's just that conservatism won't bring you market leadership.
        DISCLAIMER: the author of the above written texts does not warrant or assume any legal liability or responsibility for any offence and insult; disrespect, arrogance and related forms of demeaning behaviour; discrimination based on race, gender, age, income class, body mass, living area, political voting-record, football fan-ship and musical preference; insensitivity towards material, emotional or spiritual distress; and attempted emotional or financial black-mailing, skirt-chasing or death-threats perceived by the reader of the said written texts.

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        • #124
          I think its difficult to argue that Airbus hasn't benefited from subsidies in the past but equally boeing has benefited from the closed nature of the US markets. The US defence industry with its very pro US outlook has easily provided the same sort of subsidies that Airbus has received - they're just in different forms> The US market is very protectionist and i think companies like BAe have suffered from having UK markets opened up.

          A someone mentioned earlier Walmart is the 3rd (or now possibly 4th) biggest supermarket chain in the Uk now but they're not succeeding despite Walmart's massive buying power - the markets are just very different from the US. And apparently they abolished the singing of the company song pretty quickly

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          • #125
            Originally posted by Colon


            I think both are symptons of conservatism. It's safer to cosy up up with govt officials and shareholders than to come up with revolutionary designs and pursue them.
            I don't believe conservatism is dumb, it's just that conservatism won't bring you market leadership.
            they've also been pretty screwed up for a while. Since at least the early 90's, they knew that they were fat and inefficient. Maybe it's not conservatism. It's stopping being stupid. I mean look at all the companies that do stupid acqusitions. That may be anti-conservative, but it is also often negative NPV.

            If you were a major shareholder, would you prefer them to make the superjumbo or not? Do you think the reward justifies the risk?

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            • #126
              Originally posted by TCO
              People do market research for new innovations all the time duckie.
              Doesn't mean market research is always right. I'm not a great believer in the strategical guidance market research can provide either how.
              DISCLAIMER: the author of the above written texts does not warrant or assume any legal liability or responsibility for any offence and insult; disrespect, arrogance and related forms of demeaning behaviour; discrimination based on race, gender, age, income class, body mass, living area, political voting-record, football fan-ship and musical preference; insensitivity towards material, emotional or spiritual distress; and attempted emotional or financial black-mailing, skirt-chasing or death-threats perceived by the reader of the said written texts.

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              • #127
                Originally posted by Standup
                I think its difficult to argue that Airbus hasn't benefited from subsidies in the past but equally boeing has benefited from the closed nature of the US markets. The US defence industry with its very pro US outlook has easily provided the same sort of subsidies that Airbus has received - they're just in different forms> The US market is very protectionist and i think companies like BAe have suffered from having UK markets opened up.

                A someone mentioned earlier Walmart is the 3rd (or now possibly 4th) biggest supermarket chain in the Uk now but they're not succeeding despite Walmart's massive buying power - the markets are just very different from the US. And apparently they abolished the singing of the company song pretty quickly
                This was a very simple-minded post. go read some stuff by our poster, Adam Smith.

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                • #128
                  Originally posted by TCO


                  they've also been pretty screwed up for a while. Since at least the early 90's, they knew that they were fat and inefficient. Maybe it's not conservatism. It's stopping being stupid. I mean look at all the companies that do stupid acqusitions. That may be anti-conservative, but it is also often negative NPV.

                  If you were a major shareholder, would you prefer them to make the superjumbo or not? Do you think the reward justifies the risk?
                  If you were a CEO do you believe you ought to follow every whim of the stock exchange?

                  Conservatism and sloppy management aren't mutually exclusive either.
                  DISCLAIMER: the author of the above written texts does not warrant or assume any legal liability or responsibility for any offence and insult; disrespect, arrogance and related forms of demeaning behaviour; discrimination based on race, gender, age, income class, body mass, living area, political voting-record, football fan-ship and musical preference; insensitivity towards material, emotional or spiritual distress; and attempted emotional or financial black-mailing, skirt-chasing or death-threats perceived by the reader of the said written texts.

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                  • #129
                    Originally posted by Colon


                    Doesn't mean market research is always right. I'm not a great believer in the strategical guidance market research can provide either how.
                    Nor is market research in existing markets always a good guide. But when you say it is impossible to do it and it is a routine part of any new large R/D initiative, I have to correct you. And I'll bet some serious Euros that it was done for the superjumbo...

                    FYI: I think you are wise to realize that strategic planning does not cause certainty and that sometimes people get lulled into thinking that their guesses have more certainty to them than they really do, just based on all the work they did. Still, this does not mean that you get better answers by never studying the business problems logically and attempting to do analysis to support your decisions.

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                    • #130
                      Originally posted by Colon


                      If you were a CEO do you believe you ought to follow every whim of the stock exchange?

                      Conservatism and sloppy management aren't mutually exclusive either.
                      I don't understand your first question. What is it in refernce to? I would have to make this investment decision even if the company were private. I'm asking if you think the project is positive NPV.

                      On the second, absolutely. No argument.

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                      • #131
                        Simple minded? ouch.

                        In what way ? There's an on going debate which seems to be have sunk to the level of "you cheat, no we don't".

                        If its a closed big ie only open to US companies then this is just another form of subsidy. There is no competitative market.

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                        • #132
                          Originally posted by Standup
                          Simple minded? ouch.

                          In what way ? There's an on going debate which seems to be have sunk to the level of "you cheat, no we don't".

                          If its a closed big ie only open to US companies then this is just another form of subsidy. There is no competitative market.
                          And you supplied nothing new and not even a response to Adam Smith's post which is on your point. And Adam Smith is a Ph.D. trained economist and a pretty insightful microeconomist.

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                          • #133
                            Oh well obviously my fault for not having enough letters after my name.

                            The general level of the debate is not at the level of trained economists and i'm willing to be told why i'm wrong in saying that having a guaranteed market doesn't offer a competitative edge in the same way a subisdy does ?

                            But why not trying being polite about it ? And in simple terms so i'm able to follow - sadly my Phd is in something else but if someone doesn't follow the aregument i see no reason to take them to task over it.

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                            • #134
                              My Ph.D. is in something else too. but I can recognize sophistication versus triteness.

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                              • #135
                                FYI: I think you are wise to realize that strategic planning does not cause certainty and that sometimes people get lulled into thinking that their guesses have more certainty to them than they really do, just based on all the work they did. Still, this does not mean that you get better answers by never studying the business problems logically and attempting to do analysis to support your decisions.
                                Yup Yup
                                I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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