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Founder: William E. Boeing (1881-1956).

‡ May 9, 1917 : the Boeing Airplane Company
was named.
‡ World War II: B17 and B29 bombers
 Õ


‡ 1958: Boeing 707, the first civilian passenger

plane.
‡ 1969: Boeing 747 jumbo jet
‡ Became a leading producer of military and
commercial aircraft.
‡ Undertook a series of strategic mergers and
acquisitions to become the world¶s largest, most
diversified aerospace company.
 Õ


‡ Aerospace pioneers, which are now part of the

Boeing enterprise, include:
1. North American Aviation
2. McDonnell Douglas
3. Rockwell International (space and defence
business)
4. Hughes Space & Communications
 Õ



 



Business Development and Strategy

Communications

Engineering, Operations and Technology

Finance/Shared Services Group/Boeing

Capital Corp.

Human Resources/Administration

International

Law

Office of Internal Governance

Public Policy

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‡ Boeing Reports Second-Quarter Results

‡ Second-quarter earnings per share of $1.06 on
operating margin of 8.4 percent and revenue of
$15.6 billion
‡ Operating cash flow of $0.3 billion reflects
continued investments in development programs
‡ Cash and marketable securities of $10.0 billion
provides strong liquidity
‡ Backlog of $312 billion is nearly five times
current annual revenue projection
‡ 2010 revenue, earnings per share and
operating cash flow outlook unchanged
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Commercial Airplanes Division
‡ Commercial airplanes:
‡ 737
‡ 747
‡ 767
‡ 777
‡ 787 Dreamliner
‡ Boeing Business jets
‡ Boeing Freighters
 
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Commercial Airplanes Division
  



!/"2"
 ! further delay the delivery of
its first 787 Dreamliner aircraft until early next
year, in another set-back for the troubled jet
programme. Boeing said it now expects to
deliver the first Dreamliner in the middle of the
first quarter of 2011 as it continues to carry out
tests on the beleaguered plane, which is already
more than two years behind schedule.
 /##!#/3435

‡ Aerodynamic issues
‡ Nuts and bolts
‡ Collaborations
 !


‡ Strategy
‡ Core competencies
‡ Values
 %



‡ Integrity
‡ Quality
‡ Customer satisfactions
‡ People working together
‡ Enhancing shareholder value
‡ Large scale system integration
‡ Lean enterprise
 6 
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‡ General Environment (PESTDG)

1. Political Segment
2. Economic Segment
3. Sociocultural Segment
4. Technological Segment
5. Demographic Segment
6. Global Segment
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‡ Policy and regulatory decisions by governments

can have a dramatic impact on the demand for
civil transport aircraft.

‡ Regulations by the United States and

European governments may prove to be a major
driving force for orders for new aircrafts and
engines in the years to come.
 &'  '
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7

‡ The high-level political intervention also has an

important impact on the sales of aircraft.
‡ Different buyer¶s decisions of spending such a
huge amount of money always rely partly on the
political reasons since the support and
interference of government could affect the
future of buyers.
‡ Boeing is aided by the government and from
federal research and development contracts
from NASA and PENTAGON. Also Boeing
received a tax break from their own state.
 
% 
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‡ Likelihood of increasing fuel costs, congestion

and other environmental restrictions, as well as
the prospect of higher security and insurance
costs to reflect the risk of terrorism.

‡ With several airline companies closing down

and the global tourism industry in recession,
aircraft prices are down by around 20 per cent.

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Boeing operating in 70 countries all over the world

and therefore has a workforce diversity
Eco-Efficiency
787 Dreamliner: Cleaner, Quieter and More
Efficient .
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Reason why:
‡ Be a catalyst of innovation
‡ Ensure technology readiness
‡ Maximize R&D yield
‡ Attract, develop & retain the people & skills
needed for business success
‡ Focus on mid long technology mid-term
solutions
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‡ Contracts with 22,000 suppliers and partners

globally
‡ Research, design and technology-development
centres and programs in multiple countries
‡ More than 159.000 Boeing employees in 49
states and 70 countries
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‡ Global reach: Customers in more than 90

countries
‡ Total revenue in 2008: $60.9 billion (41 % from
international sales)
‡ 70 % of commercial airplane revenue historically
from customers outside the United States
‡ Manufacturing, service and technology
partnerships with companies around the world
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‡ The threat of new entries is considered low and
on the scale of 1 to 10, it is ranked as 1
‡ The threat of new entry is very low against
airplane manufacturing industry
‡ High capital requirement, technology and
government barrier
‡ High Entry and Exit barrier
‡ Government officialy approved China
Commercial Aircraft
‡ China Commercial Aircraft planned by 2020 with
expectation to buy nearly 10,000 new planes by
Asian Airlines with more than 2,200 going to
China
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Engineering know-how by cooperating with

Boeing and Airbus. A consortium of
Chinese companies China aviation
produces components for 747 and 787,
and final assembly line for Airbus A320

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‡ The threat of substitute is moderately low

‡ The failure to meet the scheduled delivery time
Airlines Company started to switch to Airbus
claiming to have the technologically advanced
fleet
‡ Global Economic crisis gave birth to new
substitute, The World Aircraft Leasing Industry
‡ The trend threatened Boeing and the leasing
companies started to grow
‡ Bullet trains or high-speed railway
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‡ In this industry, the bargaining power of the

suppliers is low
‡ Suppliers are less in number in this industry so
Boeing have high degree of control over the
suppliers since there are no other buyers than
Boeing
‡ Since Boeing serves different market they have a
diverse supply chain sometimes they have to
depend solely on the suppliers
‡ One of the problems with 787delay of delivery is
unplanned failure of suppliers to deliver sections
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‡ So with expansion of Boeings production

capacity it is likely to affect the capacity of the
suppliers.
‡ Hence this could be a problem for Boeing to
loose the bargaining power.
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‡ Bargaining power of buyer is considered

moderate to low and on the scale of 1 to 10, it is
ranked as 3.
‡ There are two major commercial aircraft
suppliers in the world that airlines can change
their supplier if they are not happy with the
existing one but it is not that simple
‡ The control systems of the airplanes produced
by the two major companies are different.
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‡ The rivalry from Airbus is considered very high,

on the scale of 1 to 10 it can be ranked as 9.
‡ The commercial aircraft business is very
important for Boeing because it covers more
than 50 per cent of its total revenue.
‡ Therefore losing market share in this market can
cause big impact on the performance of Boeing
and its future development.
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‡ Boeing is a market leader from 1980
‡ In 1990 Boeing had 45 % of the total industry
orders comparing to 34% of Airbus and 21%
McDonnell Douglas
‡ In 1996 Boeing merged with McDonnell Douglas
when Airbus obtained about 50% of the
commercial orders
‡ Three years later Airbus got 55% vs. Boeing
45%
‡ Airbus market research and focus groups,
spending 5.9% for Airbus A380 of the total
revenue on R & D versus Boeing with 2.3 %

 
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‡ Core Competencies
1. Detailed customer knowledge and focus
2. Large-scale systems integration
3. Lean enterprise
4. Unique contracts and agreements with both
NASA, and The United States Air Force.

 
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‡ Boeings operational strengths include its unique

level of management, as the managers are able
to allow the company to run smoothly.
‡ Boeing is able to implement a strong
management force with its unique and strong
culture.
‡ Boeing is seemingly more efficient than its
competitor, Airbus, as it has found ways to be
more productive, without spending large sums of
money

 
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‡ Value chain analysis

1. The focus on adding value-creating activities to
their core competencies is a vital part of their
corporate-level strategy.
2. Boeing continuously tries to establish new value-
creating activities for their customers example
Boeing Capital Corporation (BCC)
3. Another value chain activity is Boeing¶s after-
sales services called, Advancing Aviation
Performance Program

 
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‡ Value chain analysis

4. MyBoeingFleet Web Portal, which provides
technical information, applications, and
services to its customers to maintain and
operate their fleets.
5. Boeing¶s Alteon Aviation Training system,
which is designed to enhance customer
training of the Boeing¶s aircrafts.
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‡ To save on costs so that Boeing can provide

lower prices to its customers,
‡ Boeing has turned to outsourcing. Outsourcing
has allowed Boeing to become more
competitive.
‡ About 70 percent of its components of a given
787 Dreamliner airplane are outsourced
because the company can save more money
and cost when outsourcing outside the country
and to generate sales
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‡ China and India are one of Boeing¶s main

focuses on countries because they can deliver
excellent products at a very cheap price.
‡ ³Offset Agreement´ is where Boeing can obtain
aircraft sales in return for manufacturing work.
‡ Giving Boeing an advantage to gain more power
of the fastest and biggest growing airplane
markets which is India and China
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‡ Innovation and Technical Expertise
‡ Strong reputation of quality and industry
leadership
‡ Long-Standing customer relationships
‡ Supplier-component manufacturer
networks
‡ International market
‡ Strategic Partnership with NASA and the
USA Air Force
‡ Unique knowledge of wing technology
and new lightweight composites
‡ R&D which allows Boeing to manufacture
aircrafts with lower cost of design and
build than its competitor
‡ After-sales service called Advanced
Aviation Performance Program
providing 24x7 global customer
support
‡ Alteon Aviation Training system- a
computer based training facilities
and full flight simulator for a
customers crew members
‡ Boeing online information system
MyBoeingFleet Web
‡ Global Airline Inventory Network
System
‡ Reliance on Suppliers-Component
Manufacturers (both strength and
weakness)
‡ Current strategy of outsourcing
components to the other countries,
in order to save costs and time,
leading to acquiring technological
know-how
‡ Boeing spent 2.3 % of the total
revenue comparing to 5.9% of
Airbus
‡ Development of more fuel efficient
planes as energy prices are
increasing
‡ Invest more money into alternative
energy sources
‡ Develop more Eco-Friendly aircrafts
using alternative cheaper fuels
‡ Dependency on fossil fuel utilization
‡ Chinese government has officially
approved the launch of China commercial
Aircrafts, which will manufacture large
passenger planes
‡ Outsourcing countries acquire
technological know how by cooperation
with BOEING
‡ Leasing companies growth in Asian
market
‡ Railroad transportation development
affecting the business travel market if
time of travel reduces
‡ Dependency on suppliers with
market expansion
‡ Failure to deliver planes as
scheduled affects the orders and
market rates
Etc.:
‡ Market share growths of competitors
‡ Changes in legislation, norms and
regulations

 

‡ Boeing has began a global strategy that is

currently beginning to take off
‡ Run healthy core businesses
‡ Leverage strengths into new products and
services
‡ Open new frontiers
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‡ Adding Value creating activities to their

core competencies
‡ Offset agreement
 
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‡ Focus on commonality in their products

‡ Hub to hub transportation
‡ Analysis of market and competition
‡ Focus on consumers
‡ Take competitor seriously
‡ Focus on business jet sector to become a
leader
QUESTIONS & ANSWERS
  == 


‡ People working together as a global enterprise for aerospace leadership:
Vision 2016, viewed 12 September 2010,
<http://www.boeing.com/vision>

‡ Boeing µs (BA) Mission Statement, viewed 10 September 2010,

<http://manonamission.blogspot.com/2005/08/boeings-ba-mission-
statement.html>

‡ Demerjian, D. 2008, Small fasteners cause big problems for Boeing, viewed
03 September 2010,
<http://www.wired.com/autopia/2008/11/the-little-fast/>

‡ Cone, E. 2007, What went wrong at Boeing, Know it all, viewed 04

September 2010,
<http://blogs.cioinsight.com/knowitall/content001/what_went_wrong_at_boeing.
html>
‡ Hoskinson R, Ireland D, & Hitt M, 2009, Strategic Management:
Competitiveness and Globalization 8th Edition, South-Western
Cengage Learining, USA

‡ Boeing 747-8 problems continue, likely more ahead, 2010, viewed

05 September 2010,
<http://www.glgroup.com/News/Boeing-747-8-problems-continue-likely-
more-ahead-50285.html>

‡ Tong C, & Tong L, 2003, Boeing Vs.Airbus: Competing for the

future, viewed 07 September 2010,
<www.emeraldinsight.com/journals.htm?articleid=1669075&show=pdf>