Boeing Airlines And The Defense Market Essay

With only a few large companies across the globe (Boeing, MD, and Airbus), the commercial aircraft industry essentially exhibits the qualities of an oligopolistic competition with intense rivalry. Here is an analysis of competition in the commercial aircraft business using Porter’s Five Forces.

The industry environment was also in Boeings favor at the time. Boeing had a history of dedicated customers. The company had been making commercially successful jet aircraft since it first developed the “707”. Boeing was so successful at manufacturing the jet aircraft, that it was one of two companies left making them. This advantage gave them the ability to be a powerful supplier. The expense of the development process also made it extremely difficult for new companies to even enter the market. Boeing faced only one competitor at this point; Airbus (Pearce, Robinson, 2003).

As the two largest producers in the commercial aircraft industry, Boeing and Airbus have been in a long rivalry for over two decades. Because of its huge research and development cost and a volatile market demand situation, the large commercial aircraft industry has only a few viable producers that can successfully operate in this industry. At the end of 1996, there were three competitors in the industry – Airbus, Boeing, and McDonnell Douglas (MDC). When Boeing announced in December 1996 the merger between Boeing and McDonnell Douglas, the dispute has again started between Boeing and Airbus. The merger was expected to go under

This business level strategy allows Boeing to create distinctive competencies from its rival, Airbus and gain an edge over them. Boeing has been successful in maintaining this business model due to its high R&D which has led to some great innovations in aircraft manufacturing such as the production of Advanced Winglet, Digital Airline, Performance Based Navigation System to name a few. Boeing has also prioritized customer service in their corporate strategies and have implemented GoldCare IT Enterprise Suite as means of 24/7 customer service regarding operations along with AOG solutions as means of after sales service to the customers. As mentioned Boeing Dreamliner 787 has been created keeping in mind the customers’ psychological desires in mind which sets Boeing apart. Boeing has been very successful over the years to create their competitive advantage and maintain its superior performance and they continue to do

Airbus does makes lots of competition to the Company. They have many similar aircrafts, with many similar aspects. Both companies have planes with big capacity for many passengers. What makes the Company stronger is the biggest market share of 39.6%, and Airbus market share is 25.2%. There are

Boeing’s target market is different in that they are selling to companies rather than individuals. The target market is determined through a combination of geographic and demographic segmentation. The two target markets are commercial airline companies and the US government and its allies. These markets directly coincide with the company’s two business units: Commercial Airplanes and Defense, Space, & Security (Boeing, 2016).

Boeing’s position as a mature, well-established, and financially stable firm provides it with many competitive advantages. First and foremost, Boeing has been manufacturing airplanes for one hundred years, contributing to significant brand recognition and loyalty within the customer base.

Strategy #1 The aircraft market is extremely competitive, even though there are less than five major players globally. Between Boeing and Airbus, most of the market share for the next generation aircraft has already been solidified. For Bombardier to effectively gain orders it must make the aircraft are more appealing to purchasers in two major ways: cost and performance. In the final cost of an aircraft, a great deal of money is spent on research and development. Boeing has millions invested in new aircraft and wing design, and piggy-backs off its other divisions and aircraft offerings. Airbus receives a great deal of benefit from its govermnet contracts

• High capital requirements to establish +huge set up+ large investments + economies of scale/scope: Boeing having advantage over Airbus in large commercial aircraft sector.

In a strategy similar to that of Airbus, Boeing absorbed its largest rival, McDonnell Douglas, in 1977. Boeing’s newest entry into the market is the 787 Dreamliner, a revolutionary jetliner manufactured with up to 50 percent composition materials and designed to increase fuel efficiency and reduce environmental impact. The aircraft has suffered several problems since the first model rolled off the line in 2007, most notably with the lithium-ion battery pack. These issues were resolved in 2013 and Boeing expects the 787 to be incredibly successful due to new demand for super-efficient airliners, a result of rising global fuel prices. Boeing is the wworld’s largest aerospace company, and the leading manufacturer of commercial jetliners and military aircraft combined. The company designs and manufactures rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles and advanced information and communication systems. They are a major

The Boeing corporation had been a very successful company in the mid-1990s. At the time, it dominanted the market in commercial aviation with an additional thriving sideline in the military and space contracts market. Boeing faced and then overcame a huge number of challenges but also took advantage of many opportunities that were offered up by the aerospace market in the late 1990s. The company faced a number of challenges. In wake of he the first Gulf War, the incumbent economic slowdown severely decreased the market demand. Also, the Boeing encountered stiff competition from the company Airbus which many experts have attributed to heavy subsidies by European government that gave the company an unfair advantage market advantage. For instance, in 1999, Airbus outsold Boeing for the first time in the company's history and delivered to the market more airplanes than the Boeing company did in

By comparing the above companies, Boeing is a very strong and stable company. Large cap companies have market caps of $5 billion or more. This category includes the big blue chip companies that are household names to most investors. Although investors in stocks in any market capitalization category incur risk, surprises have traditionally been less likely among these blue chip companies (Ross, 2011). Their high return on equity measures how much the shareholders earned for their investment in the company.

The Boeing Company's defense business has been growing steadily over the past few years. Revenues from the integrated defense system grew from $27,361 million in 2003 to $30,791 million in 2005. The defense business accounts for over 55% of the company's revenues. Continued strong performance of this division of the Boeing Company would counter any downturn in the commercial aircraft industry (DATAMONITOR).

Boeing is a world leader in the aerospace industry. At one point they were the highest seller’s commercial aviation with no competition in sight. That all changed, and soon Boeing had to change.

Boeing’s product is aircrafts. These aircrafts include commercial airplanes freight airplanes, and Boeing Business Jets (BBJ). All of Boeing’s aircrafts stem from their five jet families: 737, 747, 767, 777, 787 (Boeing, 2016). Each family differs in size, engine, build, range, and capacity in order to meet the needs of all Boeing customers. The commercial section of Boeing aircraft focuses on mass transit of passengers and has a jet from each of the five families offered (Boeing, 2016). The commercial airplanes range from small 50 person planes that travel between relatively close cities, to large 600 passenger planes that travel across the globe. The freight section of Boeing aircraft focuses on planes capable of carrying goods to be delivered to and from different areas or regions (Boeing, 2016). These freight versions of the Boeing aircraft family do not come equipped with any of their commercial aircraft such as cabin seating, overhead storage, lights, air vents, or any cabin service features. These are planes intended to hold a very small crew and are basically hollowed out in order to store as much as possible. Lastly, Boeing also offers a wide range of BBJs from each of its families of aircraft (Boeing, 2016). BBJs are much more luxurious than a commercial version of an airplane. They are intended for business executives and to be used by companies or corporations. The BBJs come equipped with couches, TVs, offices, larger restrooms, and other luxury features that