The Boeing Company
Boeing is a pioneer organization which has strived to be on the top of the global aerospace. This is through the company’s effort to bring forth a combination of innovative and visionary products and create a lean management. Boeing Corporation is not however in the same position it was during the 20th century when it opened its business in terns of climate and marketplace.
The company has been faced with the threat of high global competitive force and the high demand of a variety of products. A too complacent management for this company would be the source of trouble for this corporation. This paper will prepare Boeing’s Corporation SWOT analysis and present the various Strategic Issues of the company.
Company’s profile
Boeing is an American multinational defence and Aerospace Corporation which was established in1916 by Boeing William in Washington, Seattle. Boeing is a company which has been growing from a national corporation into a multinational organization. In 1997, the Boeing Company merged with McDonnell Douglas. Since 2001, the headquarters of Boeing Corporation has been in Chicago, Illinois. There are many business units which make up Boeing Corporation.
These units are the Boeing Defense, Space and Security (BDS), Boeing Commercial Airplanes (BCA), Boeing Capital, Operations & Technology, Engineering and Boeing Shared Services Group.Boeing Corporations is among the largest corporations in the globe dealing with the manufacture of aircrafts in terms of deliveries, orders and revenue. It is the third largest contractor in defense and aerospace by its defense-related revenue. Boeing is the largest exporting company in the United States and part of its stock is a component of The Dow Jones Industries Average.
The company’s vision, mission statement and objectives Vision
The vision of Boeing Corporation is to work together to make the company the leader and future of flight around the globe. Boeing’s mission is to be the leading aerospace company and to provide the best industrial concerns in terms of growth, profitability and high quality goods and services. The company’s objective is to fulfill its mission and goals through continuous improvement of the processes and product quality. The company aims at using its long strategies for improving its services and products which is the cornerstone strategy of the business. The overall quality improvement touches on aspects of the company’s administrative, manufacturing, support organizations and its design.
A second objective of Boeing Corporation is to create and employ a highly motivated and skilled workforce.The human resource department of the company is an important organ for the organization. The company provides a combination of the right skills, training, leadership, environment, and communications, the company aims at creative a productive workforce committed to quality and attainment of the general goals of the corporation. The company’s other goals include employing a focused and capable team of management, achieving technical excellence and having financial strength.
The Boeing corporation is also committed to integrity a broad aspects to its suppliers and customers.Boeing rivals are those which manufacture long –range and medium size passenger aircrafts which are the common products in modern day aerospace industry. The major rival of Boeing is Airbus which in the past few years it overtook Boeing as the most successful company. The Airbus shorter range variations like the A-340 and the A-330 Long Haul airbus are the major points of strengths for airbus the market share pie chart of the United states aerospace industry shows Airbus and Boeing as the head to head competitors.
Airbus company has been Leading in terms of higher orders number compared to Boeing but the revenues of Boeing is much higher the revenues of Airbus. This is because Boeing makes its profits from other business like space activities, defence and aerospace. The introduction of A380 by Airbus gives it a high competitive advantage which has increase its market share considerably. Also the new model 7E7 , Dreamliner by Boeing places the corporation at a good position of gaining increased market share and boosts the completion in this industry to become highly aggressive.
The economic crisis of 2009 greatly affected the air travel industry. the air traffic dealing passenger transportation declined by about 2% which marked a major recession never been seen for almost six decades which had hit the worlds economy . commercial aviation has managed to withstand any challenges in the past through its quick recovery ad returning back to normal by mid 2010. The passenger traffic session is projected to increases by 6% based on the past annual rates starting this year to 2014.
SWOT Analysis
SWOT analysis is a tool of strategic planning which is used to evaluate the Weakness, Strength, threats and Opportunities involved in a business or project venture. SWOT analysis involves specifying the goals and objective of the business venture and also identifying the external and internal factors which are either unfavorable a or favorable for the company to achieve its objectives. Any user of SWOT analysis tool aims to identify both the external and internal factors which are the essential factors to the company’s goal in achieving its objectives .Therefore the two main categories in SWOT analysis are the internal factors comprising of weakness and strengths seen in an organization. The second category is the External factors seen in the threats and opportunities from the external environment.
Conducting a SWOT analysis for Boeing Corporation is useful in many ways.
First, is that it will help in strategic planning and decision- making process based on the weaknesses and strength of the company, it will be possible to achieve a comprehensive Strategic Assessment. There will be also and evaluation and assessment of responsiveness by examining at the external environment. Opportunities the corporation has will be identified and capitalized upon. The potential threats will also be identified which pose a major challenge to the business environment. Through the identification and highlighting of the major areas of SWOT it will be useful for making strategies adjustment, realignment and changes.
The analysis will be of vital importance for those interested in learning about Boeing Company and most specifically for the top management of this company in making decisions. Other parties who will benefit from the findings are the company’s suppliers, potential and current investors, vendors, the company’s analyst group, and those associated with the Boeing Corporation.The major strengths which Boeing Corporation has are its strong global network and the wide range of products which cover the major niches and R& D development.
Weaknesses are the management style which is semi-autocratic, ridged and hierarchical resulting to militarily kind of heritage. There is also labor problems seen in the company and finally the high dependence of WTO and US government subsides. The opportunities available for the company are the rising demand for new destinations and routes as well as the new aircraft which will increase its market share. The slowdown in commercial jet market is a major thereat to Boeing Corporation together with the high uncertainty of the airline industry environment.
Strength
Boeing Company has a wide scope of international operations serving customers from 145 countries. Its operations are in twenty states and numerous employees based in sixty countries. Boeing has employed 200,000 employees around working in the company’s subsidies. The major operations are based in Southern California, Kansas, Washing ton sates, Wachita and St. Lois Missouri. The main advantage which Boeing has is the high brand recognition around the globe and the highly strong relationship it has with its business partners. It also enjoys strong alliances with global companies which are powerful. Boeing closely cooperates with Northrop Grumman in its defence project.
They work together in programs in programs like the missile unit. Another partner company of Boeing is the Lockheed Martin company who are half -half partners. It works with NASA and many other organizations which have enabled Boeing to strengthen its position in the market.The broad line of Boeing Company is very broad with a wide range of commercial products such as the 737, 717, 777, 757, 767 and 747 aircrafts which form the Boeing Business jet and families of jetlines from this organization.
The company posses over 14, 000 commercial jet line in its wide range of global services and contributes to approximately 75% of the fleet in the world. The technological development which the corporation is venturing into is the crucial an aspect enabling Boeing to be on top of its game. The company has successfully invested in new and modern technologies which have made it to gain and sustain its competitive advantage. The R& D which is a strong aspect in Boeing has enabled the cooperation to not only be in the winning side but keeping a head to head competition with its main rival, the Airbus.
Weaknesses
The semi autocratic, ridged, and highly hierarchical style of management of Boeing Corporation is one of its main weakness cased by military heritage. This management style was adopted after the end of the Second World War. The hierarchical, ridged, and semi autocratic management style is a product of its military heritage. In this form of leadership, the employees are not involved in any decision making. This form of leadership is not an attractive way of leadership management on today’s global corporations. Several problems arise from this form of leadership because it leads discrimination of workers even along racial lines thus interfering with the unity among workers.
The executive board is also free from any direction and supervision of their accountability. Boeing Corporation has also been faced with the challenge of labor problems. Workers most of the time are overworked in order to meet the required delivery targets. Workers were forced to complete the planes by working in three shifts. The company was also force d to hire even the inexperienced workforce to assist in catching up with the high demand. This leads to further problems. The new workforce first found the required design of Boeing planes to be too complex beyond their ability.
This made the management to force the already experienced workforce to work 50 to 60 hours in each day of the week. And as a result of this the customers began to complain about the quality and safety of Boeing air planes. Special inspections were conducted by the Federal Aviation Administration (FAA) on the jetlines to inspect the quality and defects of these products which may affect safety of the passengers. Due to the over work the employees strike for 24 hours in 1989 which highly tampered with the public image of Boeing and its finances.Another weakness of Boeing Corporation is the dependence it has on WTO and US government subsidies.
Boeing highly gains from the benefits from US government forming 65% of the total annual sales of the company. The company also subsidizes its contracts which have made Airbus to criticize this move. Despite this being a point of strength to the corporation, it can also be seen as a weakness. The opportunities available for Boeing Corporation are the development of the Boeing 787- Dreamliner as a powerful tool for competing with Airbus. This product has become a major selling point for the company and many orders.
The successful strategy which Boeing can exploit is on the provision of wide variety products.The coming up with the Boeing 787 Dreamer shows the company’s resilience to be on top of its game through implementing a successful business strategy to be capable of building a string longer range and smaller air plane which makes the company not to lag behind in the tough competition. Another opportunity which Boeing has is on the increased demand of new routes and points of destination. This is an aspect which is seen in the low-cost airline market which is currently a booming .Most airline companies are now offering direct routes.
Threats
The main threats which Boeing is facing is the slow down of the commercial jet market. Every industry suffered from the sept. 11 attack. Airbus and Boeing also suffered major problem in the lost of its revenue. The revenues have however improved since 2001. Good signs are available for the airline company like the high demand for delivery of goods and international tourism sector.The uncertain environment if the airline industry is also another thereat to this industry because it highly dynamic and unsure to give a projected view of the long-term as well as the short term outcomes.
There is also a highly intense competition facing the industry in terms of costs of operations, price and schedules of production. As times go by also there are major manufacturers which are merging up with other global companies and suppliers to help in the reduction of the reduction of risks. This at the end boosts the productivity of the company.The low cost carries have continues to take up the major share of the market in coming up with new plains and ordering from Boeing as a way to enable them to be profitable.
These companies have boosted the United States economy and have lead to positive signs in recovering air traffic and the interest of the airline sector. The timing of commercial planes is however a major aspects which remains to be uncertain of. Air plane deliveries is likely to remain flat but will in the near future improve because of the rising cost of living.
The corporate culture of Boeing corporation is also one of the threat the
Company is facing. This is because it is hard to clearly establish the organizational structure of this company. Boeing has come to be seen as an organization with low solidarity and sociability. This is because various controversies have arisen in how the company treats its employees and employing untrained workforce. There is also the issue of the management style seen in the corporation, labor problems and lack of management skills in professional way. The employees in Boeing are not treated well the company therefore has to come up with new strategies of improving its social ability and solidarity in taking care of the employees.
Boeing Marketing strategy
Boeing corporation is faced with various national and international lows and policies which have an impact on its marketing strategy. The federal Aviation Administration which is a body put forth by the US government is highly influential in overseeing all the activities of the airspace and defence industry.There are many marketing strategies which a corporation can use to market its products. these include marketing mix- product, price, promotion and place. companies encounter various challenges in the environment they operate in.
such challenges include the downturn of political and economic unrest on the international markets. these challenges may require that the corporation adopt various market mixes which would bring about a change in the alternative strategies the company has. Boeing corporation uses a marketing mix strategy.Boeing competes as one of the largest commercial aircraft in the aerospace industry.
The company manufactures military aircrafts and defence and space systems. The sales enable Boeing to earn millions of dollars as well as its large revenues.The green passenger and 787 Dreamliner are the Boeing products which aim at revolutionizing the global air travel. The latest model is fuel efficient and highly economical to fit the demands of the consumers. The companies 330 passenger setter is another product which is capable of flying in major routes with consuming very minimal fuel of 20 % low than the normal percentage. The fuel is efficient for environment issues with less production of green house gas emission.
Reference
The Boeing Company (2010) United States Securities and Exchange Commission. Retrieved from http://www.sec.gov/Archives/edgar/data/12927/000119312511028490/d10k.htm#rom117824_8.
On March 30, 2011
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