Bachelor Thesis from the year 2012 in the subject Business economics - Business Management, Corporate Governance, grade: 1,7, EBS European Business School gGmbH (Strascheg Institute for Innovation), course: Innovation Management, language: English, abstract: Technological advancements have generally fostered progress in the aviation industry. From the early trials with hot air balloons or gliding flights to the first manned airplane flight at the beginning of the 20th century to present state-of-the-art aerospace technology, innovations with respect to aircraft development have led to continuous improvements in passenger comfort, operating ranges, efficiency, and safety. Apart from its role as creator of product feature enhancements, innovation is seen as an essential means for firms to create a competitive advantage. Due to a differentiated and customized product, technological improvements in the aviation industry are product-oriented and generally do not reach a dominant of aircraft models. This leads to the fact that firms operating in this industry environment are increasingly forced to foster innovative product design in order to satisfy customer expectations and remain competitive.Within the scope of this Bachelor Thesis, the focus with regard to innovation in the aviation industry will be set on commercial aircraft development. Specifically, a new innovation approach of Boeing Commercial Airplanes during the development of the 787 model, called Dreamliner, shall be examined. The development phase was executed in times of a changing industry environment where the conventional duopoly of Boeing and Airbus S.A.S in the aircraft manufacturing market is challenged by incoming competitors from, for instance, Russia, China, or Brazil. Hence, Boeing was forced to rethink common innovation practices and decided to employ distributed innovation as novel strategy in the product development process. However, this paradigm shift has led to severe problems, causing several delivery postponements, higher development costs, and multiple rearrangements in the project structure. Identifying the limits of distributed innovation will provide insight both for management practice and academic research, thereby providing new ideas how to create competitive advantage in an increasingly competitive industry environment that constantly demands for more efficient and customer-focused aircraft.