PEST & Industry Analysis By: Karim Badr. Snap shot of Boeing. Founded in 1916 by William E. Boeing in Seattle, Washington. In 1997, Boeing merged with McDonnell Douglas. The world's largest aerospace and Defense Company. Boeing has customers in more than 90 countries around the world.
and $2.7 billion in net income.
“If you don’t take care of your customers….someone else will”
World Aircraft manufacturing industry
Military & Space
Large Civil Aircraft( LCA)
Small to Medium- sized Aircrafts
Boeing adopts a differentiation strategy , Faster aircrafts in the form of the supersonic
787 Dreamliner series that compete against Airbus bigger airplane the A-380 jumbo
70% of the 787 Dreamliner was built outside the USA, that enables Boeing to lower its production costs in a very expensive industry.
The 787 will be the first airliner to use composites for most of its airframe construction, that will allow for a lighter aircraft and lower fuel consumption( 20% lower)
It is estimated that the amount of manufacturing outsourcing
in the aerospace industry is close to about 80% of the airplane.
Airplanes have got increasingly complex and it is not expected that a single company would have the technical expertise to meet the myriad requirements.
Manufacturers are outsourcing the sub system value chain since they want to shorten development time by increased focus on higher value added portion.
Development of LCAs is split into two markets
Large number of smaller high speed aircraft(100-290 seats)
Large and high capacity aircraft (300-600 seats)
Super Sonic jet
A-380 Super Jumbo Jet
half million individual.
also includes transparent reflections on quarterly earnings, orders and how
the impact of results financial results on production and development of
“We’ve just been through another tough quarter, not only for Boeing but for our industry. So, understandably our results are somewhat parallel to what’s happening in the global economy and its deep effects on the commercial airplane market. Boeing’s first-quarter earnings dropped 50%, to $610 million.”
Four mains players in the aerospace industry, with Boeing and airbus
controlling the market of big size commercial aircrafts
Companies in the industry focus on differentiation due to the intensity of rivalry
Companied use different strategies to compete
Key trends in the aerospace industry
Key Trends of aircraft development:
Boeing’s social media
U.S dollars in millions
2006-2007: Increase in Operating margin by 3.9%
2007-2008: Decrease in Operating margin by (2.3%)
2008-2009: Decrease in Operating margin by (3.4%)
2009-2010: Increase in Operating margin by 4.6%
* Peek of Revenue & Operating margin in 2007
Revenues By segment
U.S dollars in millions
Total Assets account for: $68,565 Million Dollars
HIGH MARKET SHARE:
Boeing controls the aerospace market for commercial aircrafts along with Airbus
MARKET GROWTH RATE
High MARKET GROWTH:
Growing demand for commercial Airplanes.
RELATIVE MARKET SHARE
Boeing follows this strategy by developing products that offers unique attributes to customers and that are different from the competition products: the 787 Dreamliner
Overall Cost Leadership
Boeing focuses on differentiating its products due to the competition.
Perceived Service Benefits
Strategies Destined for Failure
Market Penetration: Boeing should keep maintaining or increasing its market share of current products.
Boeing can achieve this by keeping its differentiation strategy to access new geographical markets
Boeing Value Chain
Competitive Position of Value Chain