Analysis of the Commercial Aircraft Manufacturing Industry & its Challenge from Asia: A Case of Strategic Destruction of the Western Dominated Industry

This research case explores and provides a critical perspective on the strategic destruction of the Western dominated aircraft manufacturing industry and its challenge from Asia. The decades of international outsourcing of aircraft manufacturing work by Western manufacturers to Asia coupled with diffusion of tacit scientific and technical knowledge has lowered the entry barriers for the Chinese and Japanese to enter the market as full-fledged producers of commercial aircrafts and competitors to the Western aircraft manufacturers. The outsourcing of design and manufacturing of advanced technologies that took years to mature with internal corporate investment and government funding has endowed the Asian challengers with the technological fundamentals required to build commercial aircrafts. In the years to come, China and Japan are poised to become serious players in the global market for commercial aircraft and there are already changes taking place in the regional jet market with the ARJ-21 and MRJ aircraft programs and the launch of the C919 that will surely challenge the market leadership of the Western manufacturers sooner rather than later