Week 3 Org Strategy Internal Environment

2

Company Research and Selection

Terrell McGhee

Southern New Hampshire University

Organizational Strategy in a Global Environment Inographic

Clarence Clark

1/9/2022

Airbus SE has a technological and innovation track record of over fifty years, and the company is the leading producer and manufacturer of aerospace products, solutions, and services globally (Aibus.com, 2021). The company has its headquarters in Leiden, Netherlands, but Toulouse, France, is the head office. The company is a European multinational corporation producing commercial helicopters, aircraft, space, defense, and security, the main civil business is conducted by a French company Airbus S.A.S with other facilities distributed across European Union countries, China, and the United Kingdom. According to Airbus (2019) release, the company was the leading airline manufacturer taking the most order for airline production, surpassing its immediate competitor Boeing. Airbus SE manufacturers, designs, and sells military and civil aerospace products in the UK and globally, thus, apart from airline construction, it manufactures products such as advanced satellites and telecommunication systems, navigation and science, and earth observation programs.

Airbus SE is a multinational company leading global aerospace that produces and delivers aerospace solutions to customers intending to create a safe and more prosperous world (Airbus.com, 2021). The company's customer base is mainly businesses in the airline industry across the globe. It serves airlines in India, Malaysia, France, China, Turkey, among other countries, the airline companies order aircraft, and they are delivered by the company as ordered. Airbus SE is a multinational aerospace corporation. Therefore, it does not sell its products to individuals but conducts most of its business with companies operating international airlines such as IndiGo, Air Asia Malaysia, Lufthansa, EasyJet, Delta Air Lines, Jetblue Airways, Turkish Airlines, China Eastern Airlines, and China Southern Airlines. These airline companies have one of the highest numbers of operating airlines and have historically placed many orders with Airbus SE making them its top customers.

According to the Airbus newsroom, COVID-19 has affected its business operations globally over the last two years. On their official website, the company announced a reduction in business activity with a 40% decrease in its operations due to the effect of the pandemic (Airbus.com, 2021). COVID-19 has significantly impacted the company's business operations, and this trend is expected to continue for the next few years as the global economy recovers from the effects of the pandemic. According to the company, this challenge is expected to result in a reduction in the number of employees by 15,000 by the end of 2021, this measure has been agreed upon the realization that the company may not recover to the pre-COVID-19 levels before 2023, and the process of recovery may extend until 2025. Thus the measures are taken to restructure the company and focus on a global adaptation plan, however, as a multinational company, it will work with various social experts to limit the impacts of those affected through programs such as voluntary departures, long-term partial unemployment, and early retirements where appropriate (Airbus.com, 2021).

According to Guedhami et al. (2021), COVID-19 has resulted in an economic crisis globally, large multinational companies have suffered a decline in firm value due to the stock market crisis. Airbus SE is not an exemption, and over the last two years, the company has underperformed with its operations decreasing drastically. According to Euronews (2021), the company reported a loss of €1.1 billion as a result of COVID-19 in 2020, this impact has been caused by grounding on numerous planes resulting from international travel restrictions, which continue to create uncertainties in the industry as new variants of the coronavirus are discovered every year. According to Garrow and Lurkin (2021), never before has the airline industry witnessed and sustained such a dramatic decline in air passengers. Thus, over the next few years, Airbus SE will experience a significant reduction in its revenue and market share as the world recovers from the devastating impacts of COVID-19.

References

Airbus.com. (2021). Airbus plans to further adapt to COVID-19 environment | Airbus. Retrieved 30 December 2021, from https://www.airbus.com/en/newsroom/press-releases/2020-06-airbus-plans-to-further-adapt-to-covid-19-environment

Garrow, L., & Lurkin, V. (2021). How COVID-19 is impacting and reshaping the airline industry? Journal of Revenue and Pricing Management, 20(1), 3-9. https://doi.org/10.1057/s41272-020-00271-1

Guedhami, O., Knill, A., Megginson, W., & Senbet, L. (2021). The Dark Side of Globalization: Evidence from the Impact of COVID-19 on Multinational Companies. SSRN Electronic Journal. DOI: 10.2139/ssrn.3868449

Airbus.com. (2021). Innovation | Airbus. Retrieved 30 December 2021, from https://www.airbus.com/en/innovation

Airbus.com. (2021). Who we are | Airbus. Retrieved 30 December 2021, from https://www.airbus.com/en/who-we-are

Euronews. (2021). Airbus reports €1.1 billion in losses due to COVID-19 pandemic. Retrieved 30 December 2021, from https://www.euronews.com/2021/02/18/airbus-reports-1-1-billion-in-losses-due-to-covid-19-pandemic