The paper focuses on Boeing an aerospace multinational company that creates, manufactures and sells planes, satellites, rockets, rotorcrafts and missiles. The company has its headquarters in Chicago, Illinois and is listed in the New York Stock Exchange. Boeing is the biggest aerospace company globally with a net income of US$ 8.197 billion in 2017. What is the effect of globalization, technology and internal operation models on the success of companies? The assignment highlights on the impacts of globalization and technology on the company’s success. Additionally, it focuses on the ways in which internal operation models are attributed to the international success of the company.
Globalization
Globalization is the practice of integrating economies worldwide by procuring items, services across the world. Globalization can alter the competitive marketplace for a given company. The expansion and developments of Boeing into a multinational franchise has caused the company to enter into productive partnerships as an approach of dominating the ever competitive aerospace industry. The company has entered into partnerships with companies such as Lockheed Martin Corporation; the two companies collaborate in the processing, operations and training with the United States space shuttles. The company has managed to stay competitive due to the global alliances; over 60 percent of the aspects of the Boeing commercial models are provided by foreign contractors and the percentage increases to 70 percent with the introduction of the 787 Dreamliner (Boeing, 2018).
Delegate your assignment to our experts and they will do the rest.
Boeing entered into a partnership with the Department of Defense in a program that is set to provide partner nation’s access to DoD’s highly advanced communication satellites system. The international program has given member nations an opportunity to invest according to their modern wideband satellite communication (MILSATCOM) needs. Some of the companies participating in the program include Australia, Canada, Netherlands, Luxembourg, New Zealand and Denmark. Over time the multinational has evolved the product line to advance the technology. Boeing was contracted to deliver more than ten WGS satellites to the Air Force with 6 already on-orbit (Boeing, 2018). Boeing is one company that has benefited from global partnerships however it has also experienced its negative impacts. Globalization has given rise to serious competition from companies such as Airbus and China based multinationals. Boeing lost market share to Airbus in the 1990s making the multinational to be innovative in terms of outsourcing services. However the impacts and pressure of outsourcing have led to problems such as poor quality services.
Technology
Technology has had a significant impact on the aerospace industry and especially for multinationals such as Boeing. More than 65% of overall development costs are attributed to tooling costs (Albers et al. 2017). Cloud based systems significantly reduce the tooling time and expenses by saving previous configurations and by being the key to calibrating tools and production floor. Social media, email, texting, websites and email have improved engagement and efficiency for Boeing. Aerospace leader Boeing has utilized social media for marketing and consumer engagement. Social media can be used to benefit the company while at the same time it can be used to tarnish a company’s name and alter sales dramatically. Therefore multinationals like Boeing should endeavor to understand the workings of communication technology for their own good.
Artificial intelligence has a number of useful applications for the aerospace industry however an application that has been most useful for Boeing is predictive analytics (Albers et al. 2017). It allows algorithims to measure historical utilization, repair data and real-time reporting to assess the likely repair time period therefore reducing routine maintenance needs and establishing better maintenance schedules (Goetsch & Davis, 2014). Big data analytics has been instrumental in the success of Boeing since it has empowered the managers to make better decisions; big data serves as a trusted advisor in the planning of organizational strategy (Goetsch & Davis, 2014) Big data analytics has also been instrumental in recognizing the industry patterns hence helping the aerospace multinational to remain competitive in the ever evolving industry. Boeing uses the additive manufacturing technology which allows parts to be assembled in a fraction of time than before with little or no waste hence improving efficiency. Additive manufacturing has improved the process since parts that were previously assembled from certain components can be printed, redesigned as a single-part hence establishing strength and precision.
Industrial-Based Model
The industrial-based model utilizes an external aspect to describe the fact that forces outside the organization represent the key influence s on a company’s strategic actions rather than the choices of its managers. The model is founded on four assumptions; the external environment that establishes pressure and restrictions for a firm to create its strategy, the firms in the same industry have similar resources hence they are more equal, the resources under the control of these companies are mobile and finally the fourth assumption is that organizational people are rational human beings. Some of the external factors that affect how Boeing does business include; competition, government regulation, customer attitudes, finances and supplies (Goetsch & Davis, 2014). One of the company’s main direct competitors is Boeing; Airbus delivers about 6874 planes wile Boeing delivers 5715planes. The two companies have always been competitive since the 1990s. Airbus competes with Boeing in the integration of advanced technology. For instance Boeing 787 Dreamliner utilizes 50% composites in manufacturing while the Airbus A350 XWB uses 53% composites.
The cost of production between the two companies slightly differs since Airbus production costs are mostly in Euros while Boeing’s production costs are in dollars. Boeing operates in several countries therefore they have to deal with different political climates in host countries. The currency difference in different host countries has affected the production costs and profit margins for certain subsidiaries of the company. Customer attitudes and needs are always changing therefore Boeing has to continue creating innovations to address needs and attitudes. Economic recession and crisis has led to less people spending less money on travelling; the reduction has caused less demand for aircrafts in certain countries. Change in fuel prices and fluctuations, high insurance costs and terrorism risks are some of the external economic factors affecting Boeing. Boeing recently filed a complaint against Airbus concerning illegal subsidies; The World Trade Organization has supported Boeing’s claims and the decision is expected to regain the position in commercial aircrafts.
Resource-Based Model
The resource-based model makes an assumption that each organization is a collection of distinct resources and capabilities that give the foundation for its strategy and the main source of their return. Boeing has some distinct resources and capabilities that make it the company it is today. The company is positioned in many countries globally hence putting it at an advantage since most clients can access them (Hitt, 2011). Boeing is a trusted and well known company in the aerospace industry; the brand and reputation of the company gives it a competitive advantage over other companies in the industry. Boeing is the number one holder of patents in the aerospace and defense industry with over 7, 400 patents globally. Boeing is one of the most innovative companies in the industry such recent innovations include the 737 MAX 9, 787-10 and T-X, Boeing AnalytX and Boeing HorizonX. The company invests more than $3 billion yearly in development and research. The company is the biggest drivers of innovation in the aerospace and defense industry.
Vision
The company’s vision is to connect, protect, explore and inspire the World through Aerospace Innovation. The company has inspired innovation in the industry through the training of current and future professionals such as engineers, plots, aircraft, and missile and rocket operators. The company has explored the aerospace world through more than $3 billion dollars investment in innovation. The company has utilized its innovative aircrafts to connect the world through aviation. Boeing is utilizing green energy innovation strategies in its manufacturing processes to protect future resources.
Mission
Boeing’s mission statement is, we are constantly re-examining our capabilities and processes to ensure that our company is as strong and vital as our heritage. In fact, our culture mirrors the heritage of aviation itself, built on a foundation of innovation, aspiration and imagination (Boeing, 2018) . The mission statement outlines the company’s constant need to reexamine its strengths and weaknesses in a bid to maintain its competitive advantage. As mentioned earlier, Boeing is one of the most innovative companies in the aerospace and defense industry its culture is a driving force for this factors since the company believes that a developed and diverse workforce can work effectively to achieve organizational goals.
Stakeholders
The main stakeholders at Boeing include clients, employees, stockholders, suppliers, community, creditors and unions. All stakeholders at Boeing work together to establish key contributions to the growth and process of the company, the main stakeholders at Boeing include governments, airlines and military. Since the company is a multinational it has a huge customer base hence the high demand for services and consequently huge profit margins. The employees at the company form the foundation for the company’s main existence. They create and deliver products that customers use. Shareholders own the company since they provided the capital. The board of directors acts on behalf of the shareholders and might replace executives or chief executive officers. Supplies are integral to the operations of Boeing since they provide the materials necessary for product manufacturing. The local communities are important stakeholders therefore Boeing has endeavored to create healthy relationships with the surrounding communities. They are regarded as responsible employers who provide the community members with good workplaces. Creditors are integral for Boeing since they provide resources that enable profitability or expansion of the company. Trade unions’ fight for the rights of workers in the company therefore they are important stakeholders since they ensure the well-being of employees
References
Albers, S., Baum, H., Auerbach, S., & Delfmann, W. (2017). Strategic management in the aviation industry : Routledge.
Boeing. (2018). Our Company. Retrieved October 15, 2018, from http://www.boeing.com/company/
Goetsch, D. L., & Davis, S. B. (2014). Quality management for organizational excellence : Upper Saddle River, NJ: Pearson.
Hitt, M. (2011). Strategic Management Concepts and Cases Edition for Strayer University: New York: Cengage Custom Publishing
