Financial Analysis for Boeing

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Looking at the brief history of Boeing, the company was first founded in Puget Sound, Washington in 1916 by William Edward Boeing.
After sucessfully selling military aircrafts adapted for troop transportation in the 1950’s and introducing commercial aircrafts model 707, 727 followed by 737, Boeing has since then become a leading producer of military & commercial aircraft.
After a few number of mergers & acquisitions to become the world’s largest, most diversified aerospace company, Boeing enterprise now include: North American Aviation, McDonnell Douglas, Rockwell International, Hughes Space & Communications, and Jeppesen.
Financial Analysis
1. As you can see from the graphs, over the last three years, Boeing has achieved
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Morever, these potential new entrants could be deterred from entering the industry as the development of aircrafts can take very long lead times. It can take about 15 – 20 years to develop a next-generation commercial aircraft and production may stretch out for decades, depending on the no. of units ordered. This may act as a barrier of entry for potential new entrants. Illustrating the third force which is Power of Suppliers,
There are only 3 main competitors in the commercial jet engine-making industry which operates as an oligopoly. Historically, all of these companies have competed with each other for jet engine contracts which led to intense price wars. To avert ruinous price wars, these companies typically enter into exclusive supplier contracts with aircraft manufacturers. In such arrangements, the engine maker becomes the sole provider of jet engines for a specific aircraft model.
In addition, the big jet engine makers give heavily discounted price, partly to lock in lucrative long term replacement parts, repairs and maintenace business, thereby reducing the power of these jet engine makers.
On the other hand, for the power of customers,
Airlines usually buy new jets under long-term fixed price contracts. This effectively shifts the financial risk to the aircraft manufacturer as they have no certainty of the future, thus giving
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