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06 June 2016
06. June 2016 Commercial Aircraft

Ahead of the curve: Airbus and the importance of strategy

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When you’re a world-leading manufacturer of commercial aircraft, staying one or more steps ahead of the competition is critical. And because there is no magic “crystal ball” that can predict aviation trends short- or long-term, Airbus relies on an empowered Strategy team that influences all aspects of the company and its global operations. 
At the centre of this function is Dr. Kiran Rao, Airbus’ Executive Vice President Strategy and Marketing – who originally joined the company in 1992 and worked in several capacities before overseeing Strategy and Marketing in parallel. Setting out Airbus’ overall approach to preparing its future, Dr. Rao first explained why a single person is in charge of the two activities. 
“To put it simply, these two departments are inextricably linked,” he said. “Marketing is about understanding how our products meet the needs of customers and Strategy is about anticipating how those needs will evolve and proposing products and services adapted to their future business environment and the world they operate in.” Dr. Rao continued: “A major product change can take five years, a completely new aircraft eight or more. And then they’ll be flying for 30 years, so we have to think ahead.” 
In place of the aforementioned crystal ball is hard work. The Strategy team’s specialists identify trends by analysing the current market, macroeconomic forecasts, infrastructure development and the evolution of the original equipment manufacturer (OEM) and supplier landscape. They are closely connected to the operational teams across the company, Airbus’ global business development, and provide context and orientation to Airbus’ Research and Technology activities. 
Dr. Rao added: “Although we publish the Global Market Forecast, most of our work is out of the public spotlight. We’re more visible when we successfully launch a new aircraft development – minor or major, an innovative service for our customers or a new partnership or joint venture which broadens Airbus’ global footprint. But our satisfaction comes from understanding the sensitivities behind the forecasts and business cases and the potential consequences of our actions.”
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