Introduction
The assignment addresses the strengths, weaknesses, opportunities, and threats faced by the Boeing Corporation. The assignment also looks at some of the segments of the general environment and the forces of competition that affect the company how Boeing has addressed them. Boeing is currently a world leader in the aerospace industry manufacturing commercial planes, rockets, defense, and security systems, and has quite a large global business and customer base. Boeing is also a leader in aerospace technology and innovations, creating efficient products which satisfy the needs of its customers. With its resources, capabilities, and competencies, the company has the opportunity to develop, create more efficient products and expand its business and customer base. The paper also looks at some of the improvements that the company can make to create value and reduce its expenditure.
General Environment
The six segment analysis refers to the model used in analyzing the general environment of a particular organization or firm (Hitt, 2011). The segments of the general environment, all influence the operation of the Boeing Company. Of the six, the natural and technological segments affect the aerospace company the greatest as compared to the others. The aerospace company takes great consideration on issues such as global warming and pollution reduction among other natural factors. The company also leans heavily on technology and works to improve its creations technology wise. For instance, Boeing 787 Dreamliner that started its operation around 2011 had unique qualities as compared to other planes. The plane uses a considerably lower amount of fuel as compared to its predecessors and other planes. The plane was also made using fifty percent of composite materials. It shows how much the company values the natural environment and also how much it thrives to improve technology wise.
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Five Forces of Competition
i) Competitive Rivalry
The competitive rivalry as a force of competition examines the intensity of existing competition in a marketplace ( Grant, 2015) . Boeing is a global company with a huge business base, operating in several countries across the world. While Boeing is currently the largest aerospace company in the world, it faces competition from other aerospace companies such as Airbus, especially regarding technology. For instance, while the Boeing 787 Dreamliner’s manufacture utilizes fifty percent composite material, Airbus A350 XWB is manufactured using fifty percent composites.
ii) The Bargaining power of suppliers
The manufacture of the Boeing 787 Dreamliner saw a great change in the supply chain of Boeing ( Nolan, 2012) . Suppliers of the materials used in the manufacture came from all over the world and are in three tiers. The third tier supplied the second who supplied the first tier. According to the contract, all the suppliers only should receive their payment after the full manufacture complete . This policy reduced the risks that Boeing may have incurred during the manufacture. Having such a large base of suppliers reduces the power of suppliers as well as the prices of the suppliers.
Evaluation
Despite facing stiff competition from Airbus over the past three decades, Boeing has always stayed on top of the business by expanding its business base and working to improve the technical aspects of its products. Boeing 787 was manufactured using a technology that had never been tried before by any other aerospace company in the world, for instance. As mentioned above, Boeing adjusted its supply chain to accommodate many global strategic suppliers to deal with the challenge of low business profitability ( Nolan, 2012) .
Future Improvements
Boeing largely as an aerospace company leans heavily on technology and works each time to apply technological improvement to its products (Boeing, 2018). The company uses its technological prowess to deal with the issue of completion. At the same time, the company has a mission to reduce pollution and the effects of global warming as much as possible. It is possible that the company might come up with an electric plane shortly . Such technology would beat all its competitors and revolutionize the aerospace industry. The model used by Boeing in the manufacture of the 787 Dreamliner proved to be quite beneficial to the company. It greatly reduced the bargaining power of its suppliers and minimized all the risks involved in the process. By not paying the suppliers upon delivery, the company was able to assess any materials that proved to be of low quality and returned to the suppliers. In the future, the company will increase its supply base to deal with the issue of the bargaining power of suppliers.
External Threats
Some of the external threats currently affecting Boeing and its operations include competition, regulatory pressures in various countries, risks of business disruption, and economic changes and status of various countries (Boeing, 2018). There many other companies are manufacturing, planes, rockets, satellites, and missiles all over the world today. Boeing faces competition from these companies and works to stay on top of the business by applying technological improvement in its manufacturing processes. As a global company, Boeing operates in many countries with different political ideologies and government policies ( Nolan, 2012) . The firm faces a great challenge doing business across numerous airspaces and works according to the guidelines of all the governments. Different countries have different levels of development which influences how the company carries out its businesses across the world. Moreover, the different currencies and their value also affect the operation of the company. Currencies shift according to the economic shifts in various countries, an issue of which the company must be aware.
Threats and Opportunities
The most significant threat facing Boeing is the increased competitive pressure ( Nolan, 2012) . Other aerospace companies such as Airbus are working just at a similar pace to come with more sophisticated and highly effective machines, rockets and airplanes. Technology presents as the key and the main determining factor of dominance in the industry. If an aerospace company comes up with a unique project , and one that suits customers’ needs better, the whole world will lean towards that particular company. Boeing shall have lost its superiority and dominance. It is therefore important for the company to stay on top technology-wise to keep other competitors away. Another way the company could deal with its threat of competition is by expanding its business base and getting into more areas. With a larger base, the company will operate more comfortably as the other competitors will become much smaller.
Boeing has increased opportunities in Defense, space and security markets. Currently, Boeing has three business units. These include commercial airplanes, Boeing global services, and defense, space & security units. The global services began its operation just recently. With a bigger business and customer base, Boeing has the opportunity to become the greatest aerospace ever. Boeing aims to seize its opportunities and develop through innovations and continue to provide its customers with remarkable products.
Strengths and Weaknesses
Some of the greatest strengths of Boeing include its management, its financial performance, its wide model variety, its large number of suppliers, and its large business and customer base (Boeing, 2018). Boeing has grown steadily since its foundation in the early twentieth century. The success of the corporation implies that it has had proper management over the years. Today, Boeing employees over one hundred and forty thousand people in the United States alone and also has employees worldwide in more than sixty-five countries. The huge customer and business base gives the company its prominence in aerospace and popularity in the world. The company is a leader in innovation about aerospace technology. Some of the weakness of the corporation include its huge research and development expenditure, huge expenditure on pensions and operational issues. Boeing’s supply chain involved in the manufacture of the 787 Dreamliner, although a success, was also seen as a weakness ( Nolan, 2012) . It is because the company lost a lot of profits during the manufacture of the first 787 Dreamliner as it outsourced materials and labor from a lot of different places.
Strategy
Boeing invests a lot in research and innovation to be to manufacture more efficient airplanes and other aerospace machines. Boeing must continue to conduct more research and expand its business base to take full advantage of its strengths. To fix some of the company’s weaknesses, it must focus only on promising and quality research and innovative programs. This way the company will considerably reduce its expenditure and save more profits.
Resources, Capabilities, and Core Competencies
Boeing is a global leader in aerospace technology and the aerospace industry. The company manufacture, jetliners, rockets, defense and security systems (Boeing, 2018). Boeing’s capabilities include creating more efficient commercial airplanes, designing and building defense systems, offering a wide range of service options for customers and creating more advanced technology solutions. One of Boeing’s key current key competencies is market shaping. The company can stay ahead of the customer by knowing customers’ needs in advance and supplying them with what they need (Boeing, 2018).
Value Chain
Value chain refers to the framework used in describing the process of receiving raw materials, applying processes to add value to the materials to create finished products and selling the products to customers (Hitt, 2011). Value chain analysis is done by looking at every step of production and identifying ways of improving chain efficiency. To deliver quality products at the lowest cost and also increase its competitive advantage, Boeing must maximize its strengths, fix its weaknesses and invest more on promising research and innovation. The supply point of Boeing’s chain presents as a point where the company can create value. Through its huge supply base, Boeing has the opportunity to acquire quality materials at lower prices. It is possible by creating competition among the suppliers by acquiring raw materials from numerous supplier at the same time. This way, the corporation will be able to produce quality products at the cheapest costs possible.
References
Boeing. (2018). Our Company. Retrieved October 15, 2018, from
Grant, R. M. (2015). Five Forces of Competition. Wiley Encyclopedia of Management , 1-4.
Hitt, M. (2011). Strategic Management Concepts and Cases Edition for Strayer University: New
http://www.boeing.com/company/
Nolan, R. L. (2012). Ubiquitous IT: The case of the Boeing 787 and the implications for strategic IT research. The Journal of Strategic Information Systems , 21 (2), 91-102.
York: Cengage Custom Publishing
