Boeing Strategy Analysis

BoeingGroup # 13

Abhilash Nair Amarjeet SinghKislaya Sharma

Radhakrishnan R

Five ForcesThreat of new entrantsHigh capital investment and needHighly skilled staffTechnologyLead time“Connections”Availability of a large marketScope economies

Five Forces (contd.)

Threat of substitutesHigh-speed Bullet TrainsLeasingBargaining power of suppliersLess number of buyersGlobal OutsourcingTechnological expertise

Five Forces (contd.)

Bargaining power of buyersSwitching costsLow-cost AirlinesCompetitive rivalryDuopoly

Strategic Groups

Large Commercial Jet Aviation Market

Regional Aviation Market

General Aviation Companies

External AnalysisDuopoly Airbus – Launch Aid, Heavily subsidizedBoeing’s aid from government – Federal R&D

contracts from Pentagon and NASATax breaksStrict US Laws - FCPA

Internal AnalysisHuge R&D expenditureCore competency in aviation designing –

Wing TechnologyDiversified portfolio - Commercial & Military

Aircrafts, Missiles, Satellites, Wind Turbines etc

Core Competency in Lightweight Composites, implementation Systems, Customer Relationships – Offset Agreement

Operational StrengthsStrong management force with its unique and

strong cultureMore efficient than its competitor – AirbusKnowledge of the market driven approach

SWOT ANALYSIS

Value Chain Analysis

Boeing Capital CorporationLean manufacturingAdvancing Aviation Performance Programme,

MyBoeingFleet Web portal

Tetra threat FrameworkResponse to ImitationMost credible threat – ChinaYears of experience in military aircraftGovernment support – Capital, Assured

marketIntegrated playerLarge domestic marketTechnology TransfersResponse - IPR, Brands, Lead Time

Tetra Threat FrameworkResponse to SubstitutionBoeing Available Aircraft

Response to HoldupOutsourcing StrategyDream liner – 70% of the components outsourcedOffset AgreementsBest in breed technology at low costCore-competency being diluted?Delays, cost overruns, complex supply chain Loss of jobs in America, opposition from engineers

Tetra Threat FrameworkThreat of SlackEthical IssuesClash with ShareholdersLabor Unions - Transferred production from

Washington State to South Carolina(Right to Work State), Presidential election topic

Culture Clashes after mergers – McDouglas defense company, lost focus on commercial sector

ConclusionSupply chainCorporate GovernanceIndia

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