SMARTER SKIES PROJECT BY AIRBUS - MODULE 1




SMARTER SKIES PROJECT BY AIRBUS

Module 1: Basic Aspects of Innovation






1.0 Introduction
In this module, I will be focusing on the basic aspects of innovation for Airbus's Smarter Skies project. First of all, I will be clarifying the kind of innovation that the Smarter Skies is, analyze its newness accordance to certain dimensions, describe its service aspects and explain the various components of its business model. Furthermore, I will state my views on whether Airbus utilizes the service dominant logic and whether it modified its business model for Smarter Skies.

 1.1 Type of innovation
As a beginning, it is important to clarify the meaning of innovation. As described in the OECD’s webpage, defines four types of innovation1: product innovation, process innovation, marketing innovation and organizational innovation. Product innovation is a good or service that is new or significantly improved. This includes significant improvements in technical specifications, components and materials, software in the product, user friendliness or other functional characteristics. Process innovation is a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software. Marketing innovation is a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing. Organizational innovation is a new organizational method in business practices, workplace organization or external relations. If we move our perspective on Airbus's innovation which is called 'Smarter Skies' is a combination of technological and product innovation. Why technological? Because it brings high technology and newness by exploring; eco climb, express skyways, low noise free glide approaches and landings, low emission ground operations, powering future aircraft and infrastructure. Especially 'Eco Climbing' fits perfectly to the technological innovation. Eco Climbing is aircraft launched through assisted takeoffs using renewably-powered, propelled acceleration will allow for steeper climb from airports to minimize noise and reach efficient cruise altitudes more quickly. This is new technology in aviation industry, there is no similar product introduced or used. Why product innovation? Because, the products such products such as low emission ground operations, powering future aircraft and infrastructure, low noise free glide approaches and landings are improving of the products. These innovations will be the improvements of the currently using products. That’s why it’s also product innovation.
  1. 1- http://www.oecd.org/site/innovationstrategy/defininginnovation.htm

1.2 Newness of innovation
  • Incremental versus Radical: 
It is really hard to say that Smarter Skies project is incremental innovation or radical innovation. Because it is mutual, radical and incremental innovation. However the majority is at incremental side. Because many of Airbus's innovations are development of their current products. First of all let’s start with the definition of incremental innovation. As defined in the business dictionary webpage incremental innovation2 is a series of small improvements to an existing product or product line that usually helps maintain or improve its competitive position over time. Incremental innovation is regularly used within the high technology business by companies that need to continue to improve their products to include new features increasingly desired by consumers. As know, Airbus is a giant aviation company and strive to develop its products and technology in order to survive in this harsh competitive industry. Innovations which are express skyways, low emission ground operations and powering future aircraft and infrastructure will be the development of current products and systems. Thus, we can say that it is incremental innovation. On the other hand we can call Smarter Skies project as radical innovation too. Because the innovations such as eco climb and express skyways have never produced or innovated in the world. These innovations are the significantly important and pioneer innovations, they will chance the aviation industry. To sum up briefly Airbus's Smarter Skies project is incremental and radical innovation.

2- http://www.businessdictionary.com/definition/incremental-innovation.html
  • New to the company, new to the market & new to the world: 
Airbus's Smarter Skies can be classified as an innovation that is somewhere between new to the company, new to the market and new to the world. Initially Smarter Skies significantly important project, because it will have huge impacts on to the company, market and the world. Let’s start with Smarter Skies projects new to the company, by changing the aviation sector with this project Airbus Company will take the advantage of innovative pioneer. They will start selling their project to the other companies and it will make them leader of the aviation sector. Secondly, this project is new to the market too. The innovations that Airbus introduced are unique to the market. For example, 'Eco Climb' - Assisted take-off using renewably powered. There is no such product in the commercial air transportation industry, it is definitely new the market. One more example, 'Express Skyways' - Aircraft in free flight and formation along. It is also new to the market. There is no such a form of flight commercial air transportation industry. Smarter skies project will be helpful for the market. Because, those innovations are energy saver and it will help to the airline companies to cut the costs. Thirdly, Smarter Skies project will also be new to the world, because all of those introduced innovations are environmentally friendly and green products. Because, by Low emission ground operations, on landing, aircraft engines could be switched off sooner, runways cleared faster and ground handling emissions could be cut. It is good environmentally friendly newness for the world. Also, at 'Eco climb' and 'Powering future aircrafts and infrastructure' they are planning to use renewable energy sources. It is new to the world because there is no planes that consuming aviation gasoline in the world. With those innovations planes will land and take off low noise. If you go near to the airports you can notice that how noisy there. But this innovation will change it, it will be less noisy.
  • Modular versus architectural: 
The Airbus's innovation Smarter Skies is modular innovation. A modular innovation is usually limited to changes in the components without any major changes to the system configuration. Smarter Skies project is modular innovation. It is brings technology and product development without architectural design. The first thing they do is modular innovation because it is really big innovation project. That is why are focusing on the project's technical details, not to the design and architectural details. Architectural innovation will be the second step for Airbus. What the first need to do is make the technical details as good as they can. After that, they can turn their viewpoint to the architectural innovation.
  • Competence enhancing versus competence destroying: 
Smarter Skies project is competence enhancing. Because these innovations will open new segmentation in aviation market. Other competitive firms will generate innovative products and services in order to survive. Smarter Skies will be just a trigger to the market and it will be the beginning of modern, environmentally friendly and green products in aviation industry. With this project Airbus will be pioneer innovator and it will open new competition segment and that is modern and environmentally friendly aviation. In shortly, competition will go on by adding new competition segment.
1.3 Services Aspects of Airbus’s Smarter Skies
Airbus Company is a well-known aircraft producer. The company focuses into providing tangible good with accompanying services. Airbus's Smarter Skies project will be on same way as company's perspective. This innovation focuses into providing tangible good with accompanying services. The innovations; eco-climb, express skyways, free glide approaches and landings, ground operation and power are both providing goods in order to sell to the customers.
Technology is most important factor for companies in order to be sustainable. The Smarter Skies represents that how technology is rapidly evolving and very soon. The innovations in Smarter Skies project will make big changes in aviation industry. Airbus's platform presents businesses and sectors with various opportunities that could refine their existing way of doing things, help them tackle challenges better and make them more efficient and productive. 


1.4 Business Model Aspects
  • Value proposition:  
The Smarter Skies project will create a lot of value for its market. Airbus's customers which are air transportation companies (Emirates, Turkish Airlines etc.) will be happy about those innovation. Because Smarter Skies project will cut their costs and flights will be more profitable. 
Airbus has been crafting its plane of the future for some time now, while earlier visualizations focus on see-through aircraft with shape shifting chair, the aviation company's latest ideas have the environment and passengers' precious time in mind. Airbus Company unfolded its Smarter Skies project of what air travel will look like in 2050, and all signs indicate to shorter flights and less energy consumption. For one, the aircraft manufacturer imagines an assisted takeoff, dubbed "eco-climb" mode, where smaller, lighter airplanes would depart from shorter runways and reach cruising altitude faster. Once in the air, planes could pinpoint the most direct route and travel en masse ‘a la a flock of birds’ along "express skyways" in order to reduce emissions and arrive to their destinations sooner. And when it comes time to land, aircraft could landing into airports with engines running in idle, allowing for reduced noise and emissions. By looking at those benefits this innovation will be so advantageous.
  • Customer relationships:
Airbus mainly promotes their product and services to the aviation companies, for example to the Emirates, Turkish Airlines, Lufthansa, Air France etc. Smarter Skies project's products haven’t been released to the market and produced. Thus, it is hard to give certain information about Smarter Skies project's customer relation. However, only thing can be done is evaluating Airbus company's current customer relations and forecasting for Smarter Skies. Airbus is a well-known as an aircraft producer and its customers are airline transportation companies. By looking at this, we can estimate that Smarter Skies project's customers will also be airline transportation companies. Smarter Skies project is very customer friendly project, because it cuts to the costs of airline companies by saving energy and recyclable energies.
  • Company activities and infrastructure: 
Airbus Company is a giant company thanks to its activities and infrastructures. The infrastructure of Airbus has large networks and the company has lot of partnerships. Such as; 
SESAR3 (Single European Sky ATM Research): Airbus Commercial Aircraft is contributing to the improvement of European air traffic management (EATM) with its participation in the SESAR (Single European Sky ATM Research) joint undertaking. The initiative aims to improve control of aircraft flying the skies of Europe and reduce airport congestion – which could reduce CO2 emissions by 10% per flight.
British Airways and Cathay Pacific4: Partnerships have been launched with airlines such as British Airways and Cathay Pacific to explore how best practices can be brought together to sustainably reduce the impact of aviation on the environment.
IATA5 (International Air Transport Association): Improving air traffic management has the potential to greatly reduce the climate impacts of aviation. This can be simply by optimizing flight paths to reduce the amount of fuel burned on a particular route or to improve the noise impacts of operations around airports.
European Advanced Biofuels Flightpath6: As a partnership between Airbus, the European Commission, leading European airlines and key European sustainable aviation fuel produces, this initiative is committed to supporting and promoting the production, storage and distribution of sustainably produced drop-in sustainable aviation fuels for aviation use
ITAKA7: Funded by the European Union, a collaborative project aiming to produce sustainable aviation fuel and to test its use in existing systems and normal flight operations in Europe
i4D8: Resulting from a close collaboration between SESAR members, i4D is the first step in developing one of the essential pillars for SESAR: conciliating the increasing traffic density with the efficiency of flights.
3,4,5-http://www.airbusgroup.com/int/en/corporate-social-responsibility/Responsible-Business/Partnerships-for-the-goals.html
 6, 7, 8- http://www.airbus.com/company/eco-efficiency/eco-partnerships/
  • Financial aspects:
As described9 by Airbus’ Executive Vice President of Engineering Charles Champion highlights findings of a two-year global survey to assess what passengers want from flying in the future. Results underscore a desire for more sustainable operations, as well as less stressful flights for passengers. In addition, 63 per cent of participants said they will fly more by 2050. 
9- http://www.airbus.com/innovation/future-by-airbus/smarter-skies/

1.5 Conclusion 
To sum up Airbus' innovation, Smarter Skies is a combination of technological and product innovation. It is really high technological innovation. The innovations inside Smarter Skies are mostly products to sell therefore its product innovation too. We can say that Smarter Skies is incremental innovation. Because, innovations which are express skyways, low emission ground operations and powering future aircraft and infrastructure will be the development of current products and systems On the other hand we can call Smarter Skies project as radical innovation too. Because the innovations such as eco climb and express skyways have never produced or innovated in the world. Another point of innovation's newness to the world, market and company. This innovation new to the world, market and company both. Because it has influences to all these three segment. But predominantly its newness to the world is more powerful. The innovation is modular innovation because It brings technology and product development without architectural design. Also, Smarter Skies project is competence enhancing. Because the innovations will creation new segmentation in aviation market. It will cause to competence get harder and stronger. If we look at value proposition of business model heading, Smarter Skies project will cut airline companies’ energy costs and flights will be more profitable. If we look at the subtitle of the customer relationship, it is hard to give certain information about Smarter Skies project's customer relation. Because, Smarter Skies project's products haven’t been released to the market and produced. However by looking at Airbus’s history we can say that it will have great relationship with its customer while selling Smarter Skies product and services. Airbus is one of the biggest company in aircraft market. At final subtitle which is financial aspects, by looking at Airbus’s survey about Smarter Skies, 63 per cent of participants said they will fly more by 2050. This would be pointing out that this innovation will bring success to the Airbus Company in the future.

    1.7 References
    1. 1- http://www.oecd.org/site/innovationstrategy/defininginnovation.htm
    2. 2- http://www.businessdictionary.com/definition/incremental-innovation.html
    3. 3- http://www.airbusgroup.com/int/en/corporate-social-responsibility/Responsible-Business/Partnerships-for-the-goals.html
    4. 4- http://www.airbusgroup.com/int/en/corporate-social-responsibility/Responsible-Business/Partnerships-for-the-goals.html
    5. 5- http://www.airbusgroup.com/int/en/corporate-social-responsibility/Responsible-Business/Partnerships-for-the-goals.html
    6. 6- http://www.airbus.com/company/eco-efficiency/eco-partnerships/
    7. 7- http://www.airbus.com/company/eco-efficiency/eco-partnerships/
    8. 8- http://www.airbus.com/company/eco-efficiency/eco-partnerships/
    9. 9- http://www.airbus.com/innovation/future-by-airbus/smarter-skies/

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