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.
[...] II- How is the organization doing so far in relation to the direction it has chosen? Support the relationship with the Chinese airline market In order to apply its development strategy on the Asian market, Boeing set up a large number of collaborators unlike in other counties, which only have minimal staff. Moreover, Boeing accepted to negotiate in a tripartite relation between the purchasing airlines and the host government. III- Where and why is the organization doing well? Where and why badly? [...]
[...] Boeing: Management Skills Summary Where is the Boeing organization going in terms of strategic direction? a. The goals of the company b. To compete Airbus : an offensive and defensive strategy c. A competitive advantage d. The Asian market:” the market of the future” II- How is the organization doing so far in relation to the direction it has chosen? III- Where and why is the organization doing well? Where and why badly? IV- Boeing SWOT analysis a. Strengths b. Weaknesses c. The growth of the international traffic: a determining opportunity d. [...]
[...] 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 strongest 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. [...]
[...] 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. [...]
[...] Boeing should be more focused on this type of clients. They do not need such an investment as Offset and can be more profitable because low-cost airline market is increasing much more and faster that domestic airlines. b. To increase its market share Even if Boeing still has the biggest market share on the global aircraft market, it is important to notice that the American company loses ground on several markets: Latin America and Europe. On the contrary, its main competitor Airbus is expected to develop its market share in these both regions. [...]
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