Case analysis-Boeing Vs Airbus case, international business strategy Essay

Case analysis-Boeing Vs Airbus case, international business strategy - Essay Example It was claimed by Airbus that, â€Å"both the Boeing and the McDonnell Douglas have been benefited for years from the hidden U.S. government subsidies†. This merger was a horizontal merger between the Boeing and the McDonnell Douglas. By the term horizontal merger it can be understood that the merger is occurring between the companies that produces similar goods and services. This kind of merger basically takes place when larger companies attempt to create more efficient economies of scale (Investopedia, 2010). It is evident from the case study that the performance of the McDonnell Douglas had been very poor which would have forced it to exit from the commercial aircraft business. According to the analyst â€Å"the merger with the Boeing merely accelerated the process. Because the merger would reduce the number of players in the commercial aerospace industry from three to two, it was expected that the antitrust authorities would review the merger†. Both the Airbus and the Boeing have received under the terms of joint agreement, various government aids in order to develop the large aircraft like Airbus A380 and Boeing 787. The US had made a complaint against the loans that was granted to Airbus since Boeing had not received any such kinds of aids. According to the experts of the aviation industry, by this kind of complaint the US were actually trying to prevent the EU from granting any further launch aids to the Airbus for the development of the A350. This would also help the US manufacturer Boeing to strengthen their position in the United States. In response to the complaint made by the United States aircraft makers like the Boeing against the Airbus, the EU also filed a case against the US for unlawful subsidization of the Boeing. Therefore, this seems to be the major problem as analyzed from the case study which needs proper attention (Haak & Bruggemann, 2010). Another key