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Economic Analysis: Theory and Practice
 

Competition and cooperation in the global aircraft engine manufacturing industry

Vol. 14, Iss. 47, DECEMBER 2015

PDF  Article PDF Version

Received: 24 June 2015

Received in revised form: 3 July 2015

Accepted: 29 October 2015

Available online: 25 December 2015

Subject Heading: ECONOMIC ADVANCEMENT

JEL Classification: 

Pages: 2-9

Sobolev L.B. Moscow Aviation Institute (State University of Aerospace Technology), Moscow, Russian Federation
sobolevLB@yandex.ru

Subject The article analyzes the development trends in the global aircraft engine manufacturing industry. Two major trends include constant product renovation and business model optimization based on profitability indices. The business model optimization provides sustainability of aircraft engine manufacturers in the highly competitive aircraft engine market, increase in labor efficiency and stock value.
     Objectives The aim is to increase the economic efficiency of the United Engine Corporation by using the business models of global leaders in aircraft engine building, and their competition strategies.
     Methods The study presents a comparative analysis of leading Western and Russian corporations involved in aircraft engine manufacture.
     Results The analysis demonstrated that owing to competition and well-targeted business diversification, Western aircraft engine manufacturers provide for a stable growth of economic indicators (net sales, shareholder value, product modernization).
     Conclusions and Relevance Under fiercer competition in the global aircraft engine manufacturing sector, it is necessary to consider business model options in Russia, to maintain internal competition (at least of the 'Soviet' type), and to have a well-judged approach to diversification of Russian aviation corporations.

Keywords: diversification, aircraft engine manufacturing industry, conglomeration, gas turbine engine, United Engine Corporation

References:

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  2. Volokhov D.A. Konglomeratnye sliyaniya i pogloshcheniya: “plyusy” i “minusy” zarubezhnykh i rossiiskikh konglomeratov [Conglomerate mergers and acquisitions: pros and cons of foreign and Russian conglomerates]. Trudy Instituta sistemnogo analiza RAN = Proceedings of Institute for Systems Analysis of RAS, 2006, vol. 24, pp. 126–152.
  3. Drucker P.F. Zadachi menedzhmenta v XXI veke [Management Challenges for the 21st Century]. Moscow, Vil'yams Publ., 2004, 272 p.
  4. Inozemtsev A.A. Dvigatel' PD-14 – budushchee rossiiskogo aviaproma [The PD-14 turbofan is the future of the Russian aviation industry]. Innovatsii = Innovation, 2013, no. 12, pp. 77–80.
  5. Sobolev L.B. [A network form of business organization in aviation corporations]. Trudy MAI, 2012, vol. 59 (In Russ.) Available at: Link.

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