Boeing: Management Skills

Résumé du document

In order to answer the three question concerning strategic moves that Boeing should take to
-achieve profit stability within the global aerospace industry
-increase its market share and
-align its global strategy with its global structure, some structure points have to be explained.
The American aircraft company Boeing is "the world's leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined". The three main strategic goals of this company are to be aggressive in the launch off new models, to exploit new markets and explore new technological opportunities. Since its creation, Boeing has been profiting off the American Government aid, by assistance in export sales and favoring it on the American market. All these advantages permit the company to be more competitive than the second giant of the market: the European aircraft consortium Airbus. Thus, the strategic direction of Boeing is notably directed towards competing with its main competitor Airbus and preventing the entry of new competitors.

Extraits

[...] Moreover, Boeing takes an important advantage on the A380 program delays. Several airlines revoked their contracts with Airbus because of the A380 program backlog and decided to order Boeing planes. c. A competitive advantage In fact, mixed both strategies (787 “Dreamliner and 747 “Advanced”) enable Boeing to be present at the same time on two different markets. The first one offers a cost reduction per seat for point-to-point connections, an important advantage because of increasing oil price. The second one tries to compete Airbus on the jumbo jet market by being at the right moment at the right place: when Airbus is in trouble. [...]

[...] That is why the company has to reduce hierarchical distance and develop local offices. [...]

[...] Moreover, Boeing supplying system is divided in 4 parts: Boeing as the manufacturer, Tier One suppliers as system integrators, Tier Two as sub- system integrators and finally Individual suppliers. Even if Boeing loosened its organization by moving 700 of the 1900 Tier One suppliers to the Tier Two group, its organization is to tight and do not allow easy information flow. As all decisions are made in the headquarters, it takes long time to reach the decision maker. Boeing should be more flexible and make decisions faster. [...]

[...] Because of the deregulation, the competition increased and airlines have to be more concerned about their cost structures. That is why consumer bargaining power increases. c. How easy it is to enter the market There are many barriers that obstruct entering on the aircraft market. Technical skills are a substantial barrier to enter the market. Know-how and expertise are the most strong tools that could impede a company to develop on the aircraft market. Financial barrier plays an important role: huge investments are necessary, with high capital requirement. [...]

[...] AS they offer only intra-regional services, they need short-haul planes. That is why Boeing can take advantage of this situation by selling its 787 “Dreamliner” and its other planes that have no more that 250 places. The Chinese domestic traffic should increase of per year for the next twenty years. Boeing foresees that China will need about 820 jet planes within 20 years in order to serve interior lines. In addition, Boeing thinks about profiting of the growth of African aircraft market. [...]