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Boeing Strategy Analysis - tetrathreat, five forces, value chain, core competency, resource based view
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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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