Boeing Commercial Airplanes Group: Decision 2001
I. Current Situation
A. Financial Performance During the past five years, revenues continued to increase, but organizational difficulties caused erratic profitability and due to the engineer 's strike, it had come downhill in 2000.
B. Strategic Posture
1. Mission-Vision For people to work together as a global enterprise for aerospace leadership.
2. Objectives The Company wants to dominate the world 's aircraft market as it once used to.
3. Strategies Boeing want to run a healthy core business by leveraging strengths through new products and services and by means of opening up new frontiers.
II. Strategic Managers
A. Board The board is comprised of twelve members.
…show more content…
4. Operations and Logistics The Company not only manufactures airplanes but also provides services such as airplane modification and engineering support. This helps out increase its revenue.
5. Human Resources - Boeing employs more than 150,000 people across the United States and in 70 countries. This represents one of the most diverse, talented and innovative workforces anywhere. On 2000, the union organized a strike lead by its engineers which caused losses for the company.
6. Information Systems Through their efficient technology, most of their planes have a low operating cost which increases the profitability of the company. This technology gives a lot of boost with the research and development done by the company in providing a much better version of their product or even a new plane.
Internal Factor Analysis Summary
Internal Factors Weight Rating Weighted Score Comments
Strength
Efficient technology 0.25 4.00 1.00 Advanced technology Employee relations 0.1 4.50 0.45 Skilled and talented workers Profitability 0.1 3.00 0.30 High Revenue Weaknesses Erratic Profitability 0.15 3.50 0.53 Due to delays and cancellation High employee turnover 0.15 4.50 0.68 Due to strikes Low production Output 0.25 5.00 1.25 Takes time Total Score 1.00 2.95
D. Summary of Internal Factors
As of today, having an advanced and very efficient technology will surely
The Boeing Company designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide. It operates in five segments: Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support, and Boeing Capital. The Commercial Airplanes segment develops, produces, and markets commercial jet aircraft for various passenger and cargo requirements; and provides related support services to the commercial airline industry. This segment also offers aviation services support, aircraft modifications, spare parts, training, maintenance documents, and technical advice to commercial and government customers. The Boeing Military Aircraft segment researches, develops, produces, and modifies manned and unmanned military aircraft, and weapons systems for global strike, vertical lift, and autonomous systems, as well as mobility, surveillance, and engagement. The Network & Space Systems segment researches, develops, produces, and modifies strategic defense and intelligence systems, satellite systems, and space exploration products.
Expanding its travel, catering and freight divisions to protect it from the peaks and troughs of its core airline business.
The business level strategies for Boeing commercial are deliver customer value, lead with innovation and fuel growth through productivity. Boeing Commercial Airplanes, a business unit of The Boeing Company, is committed to being the leader in commercial aviation by offering airplanes and services that deliver superior design, efficiency and value to customers around the world (Boeing.com, n.d).
Easy to attract quality applicants due to culture, profit share and Employee Share Purchase Plan, and decent salaries.
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
using their own core competencies to turn the airline around. By applying their own strategies,
Dominating the commercial aircraft market for decades, Boeing is considered to be the most highly competitive U.S aerospace industry. “U.S. firms manufacture a wide variety of products for civil and defense purposes and, in 2010, the value of aerospace industry shipments was estimated at $171 billion, of which civil aircraft and aircraft parts accounted for over half of all U.S. aerospace shipments. The U.S. aerospace industry exported nearly $78 billion in products in 2010, of which $67 billion (or 86% of total exports) were civil aircraft, engines, equipment, and parts” (Harrison, 2011). However, its position of influence has lessened in recent years. This is due to its main competitor, Airbus, who in recent years has made significant
Boeing’s management plan shows determination to improve through creation of new more members of their airplane family (commercial airplanes). This would also be achieved through integration of military platforms, systems for defense and the war fighter by use of network-centric activities. Boeing plan is also inclusive of creation of improved technology to solve problems across all business units. Boeing plans to e-enable airplanes where automation is the key to this development. Finally, Boeing is determined to arrange for financing solutions to its customers. Through this it will be able to attract more potential customers. Moreover, it can also be able to establish a better relationship with its customers through provision of incentives and sales promotion.
B. Strategic Posture Mission "People working together as one global company for Aerospace Leadership." Objectives
By looking at all the data showed by the case we can realize that the worst company in the industry of aircraft manufacturing was McDonnell Douglas because it confronted serious financial problems since 1980s when Airbus squeezed its market share. In 1984, MD's fleet comprised 28% of aircraft in service, by 1989 had only 23% of the worldwide fleet, while for example Boeing had 53% in the same year; in 1990 Boeing had 45% of the market share while Airbus had 34% leaving only 21% of the market to MD. The strongest company was Boeing which cover about 70% of worldwide demand, nevertheless the Airbus Industry was
obstacles, but also took advantage of opportunities for growth. In particular, the area of new technology has allowed the company to integrate and reorganize very effectively. In this way, customer brand loyalty has been fostered anew by adding value and by differentiating Boeing itself from its competition (particularly Airbus), as we shall see further on in the essay below.
The Boeing Company has registered strong growth in the developing markets in China, Oceania and Africa (Boeing Frontiers, Nov. 2005). For the fiscal year 2005, revenues from China grew by 87.9%; revenues from Oceania grew by $32; and revenues from Africa grew 61.8% over the 2004 fiscal year. These regions represent some of the fastest growing economies of the world. The Boeing Company's growing market share in these regions would boost the company revenues of the future (DATAMONITOR).
Airlines Industry is large and growing, it is also the most fiercely competitive sector. It facilitates international trade, world economy growth, tourism and international investment. The airline industry has over time with the use of modern technology been able to take advantage of the short haul, high frequency and gained a competitive advantage over other forms of travel, such as buses and railroad travel. Additionally, the airline industry still holds the market for global travel at a low cost and convenient way to travel. The aviation industry gives a good contribution to the GDP which includes the following: airline services, general aviation, civil airport operations, aircraft manufacturing, and
Air travel has drastically changed the way of life for many individuals that depend on air travel to take care of business. One of the top leaders in the air travel industry, The Boeing Company realizes in order to stay competitive in their chosen industry, an effective strategic plan should be implemented. There are several approaches that can be utilized, such as focusing on the external and internal objectives that could beneficial. Boeing strives to be the best aerospace-based manufacture in the world.
to meet its customers’ needs worldwide. Boeing is diversified as it consults operations all over