Competitive Strategies
The Why Behind the What
May 13, 2021

In today’s increasingly competitive marketplace, it’s critical companies understand what their competitors are doing.  But it’s equally important to understand the why behind the what, as this informs a more strategic response.

The recent issues surrounding Boeing’s 737Max are a public example of the how important it is to understand the why.  The 737 is the workhorse of many airlines, and critical to Boeing’s success.  Boeing believed Airbus’ 320neo would be too expensive to develop and offer marginal improvement, and thus wouldn’t pose a major threat.  But coming from Europe, Airbus understood the long-term demand for more energy-efficient planes and had incentive to make it work.  After the A320neo was introduced to better compete with the 737 via more fuel-efficient engines and more aerodynamic wings, and American intended to buy it, Boeing of course had to respond.  Historically, Boeing preferred newly engineered models to upgrading existing models, but had developed a re-engined 737 as a backup for future new models.  Earlier issues launching the new 787 also made Boeing hesitant to launch a new model.  And the time pressure of the American order meant the reengined model was the only option.  But the new engines changed the dynamics of the plane, and significant changes require additional pilot training, so software was used to mimic the standard plane’s dynamics.  The crashes that resulted from the MCAS system failures are well known, and the fallout to Boeing has been devastating.

There were lots of “whys” behind Boeing’s decisions for the 737Max, which led to Boeing’s failure and Airbus’ success.  Being cognizant of those “whys” may have lead to different choices by Boeing.  For your own competitive situation, doing a competitive assessment or conducting a war games exercise should also include exploration of the “why behind the what”, both for your competitors and your own approach.

Primary source for 737Max story:  https://leehamnews.com/2019/03/20/boeing-didnt-want-to-re-engine-the-737-but-had-design-standing-by/