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Business news review for the week from 5 October 2006 to 11 October 2006

Christian Streiff, chief executive of Airbus, the icon of European industrial co-operation, warned that 'Airbus could take more than a decade to catch up with Boeing's product development' on 4th October, 2006. The statement was made after the series of bad news broke out not long after EADS, Airbus's parent company, issued a 4.8bn Euro profits. Its superior programme, A380, the biggest commercial aircraft ever been built, will have to face two years of delays. This announcement will lead 'large airlines to consider cancelling their orders. It also raised its estimated cost overrun on the A380 to nearly 5bn Euro'. The reason for the delay is mainly because of the huge technical challenge of building the largest passenger aircraft. It is better for Airbus to learn some lesions from its US rival, Boeing, who also hit development and delivery crisis in the late 1960 while its 747 jumbo was being built, and went on to be a best-seller.

Airbus's second largest share holder, Britain's BAE System Plc sold its entire stakes to EADS, who became the single owner of Airbus. The share price of both EADS and Airbus has shaken over the last quarter. However, faith and full support will be restored by EADS because once the A380 programme completes, Airbus should regain the market share they've lost over the years. Mr. Streiff said Airbus would announce in January the first planned reforms for its industrial operations in Europe, which are mainly spread across France, Germany, Spain and the UK.

The previous supermarket giant has been struggling for years mainly due to the fierce competition from other competitors within the industry, especially from Tesco and Asda, and the failure of the behind-the-scenes revolution introduced by its previous chief executive, Sir Peter Davis. These include investing billions on its IT systems and automated depots which is not compatible with the company's real needs and could not even effectively deliver goods to the shops, the incorrect pricing policy partly resulting from the cost stated above, and the low level of its product range. 

Thanks to a series of reforms conducted by its current chief executive Justin King. Under the new strategic scheme, the firm has been refocusing to deliver value to its traditional middle class customers including 'relaunched its premium "Taste the Difference" range during the quarter, increasing the number of products by 250 to 1,100' , 'opened seven new supermarkets during the period, expanded five outlets and revamped a further 32', opened 10 convenience stores and added non-food ranges, including CDs and clothing, to a further 31 supermarkets', managed to keep 'retail prices were flat in the first half of the year despite rising energy and commodity costs', etc.

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