Boeing Case Study: Analysis of Global Strategy & Future Growth MGT704

This case study provides a comprehensive analysis of Boeing's strategic approach to international growth, particularly in emerging economies. It examines the company's internal environment through value chain and financial analyses, and its external environment using PESTEL and Porter's Five Forces frameworks. The report includes a SWOT analysis summarizing Boeing's strengths, weaknesses, opportunities, and threats. It identifies fundamental strategic concerns related to supply chain management and proposes a strategic plan for future growth, including strategy formulation and evaluation. The analysis also considers the impact of organizational transformation on people's and processes' perceptions within Boeing. The document is available on Desklib, a platform offering a wide range of study resources, including past papers and solved assignments.

Boeing Case Study Analysis Report 1
BOEING CASE STUDY ANALYSIS REPORT
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October 24, 2018

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Table of Contents
I. Introduction..............................................................................................................................3
II. Goals & Objectives...............................................................................................................3
III. Boeing’s Strategic Analysis: Internal...................................................................................4
Value Chain Analysis..................................................................................................................4
Financial Analysis.......................................................................................................................5
IV. Boeing’s Strategic Analysis: External..................................................................................5
PESTEL Analysis........................................................................................................................5
Porter’s Five Analysis..................................................................................................................7
V. Summary...............................................................................................................................9
SWOT Analysis...........................................................................................................................9
VI. Fundamental Strategic Concerns........................................................................................10
VII. Strategic Plan for Future Growth........................................................................................11
VIII. Formulation of the Strategy............................................................................................11
IX. Evaluation of the Strategy..................................................................................................12
Transformation in Boeing’s Organisation (The People’s Perception)......................................12
Transformation in Management (Processes’ Perception)..........................................................13
X. Conclusion..........................................................................................................................13
XI. References...........................................................................................................................14
XII. Appendices.........................................................................................................................17

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I. Introduction
The Boeing Company was established in 1916 in Washington. As one of the world’s leading and
largest manufacturer of military and commercial aircrafts, the company has strategically been
involved in the acquisition of global firms and formulation of strategic associations with
fundamental aerospace pioneers over the past decades. Currently, the company has 22,000
distributors, 170,000 innovative, diverse and skilled workforces in aerospace engineering
working in 70 countries (Armanios, 2006). The main purpose of this case study is to identify and
evaluate strategies adopted by the Boeing Company to pursue an international growth
opportunity related to emerging economies. The paper provides a critical assessment of both
internal and external environments of the Boeing business to identify the extent of strategic
fitness in the market. In the end, the paper evaluates the growth strategy recommendable for
Boeing to manage its supply chains in the international market.
II. Goals & Objectives
The major purpose of Boeing’s leadership is to envision of execution of current and future
strategic goals and objectives of the company (D'Intino et al., 2008). The fundamental aim
targets at addressing the mission and vision of the company, which draws its workforce to work
as an international firm that leads the aerospace industry. Characteristically, the goal of the
company is future-oriented which focusses on become a global leader in terms of profitability,
premium quality delivery and growth. In the commercial segment of the airplane sector, Boeing
considers to develop, produce and market its commercial aircrafts and delivering customer
support for consumers globally.

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III. Boeing’s Strategic Analysis: Internal
While McDonnell was popular in the manufacturing of commercial airplanes, the Boeing
Company strategized in the production and exportation viable jetliners. The merger between the
two firms, in 1997, enhances a leadership heritage of seventy years in commercial aviation
industry. The company’s most regarded products are the 777,767,747 and the 737 airplanes and
commercial jets (Armanios, 2006). The strategic analysis of Boeing is further enumerated under
the frameworks below:
Value Chain Analysis
According to Castillo and Salem (2012), the analysis on the value chain of a company illustrated
from both the primary and secondary business activities leading to its competitive advantage.
Moreover, the value chain is utilized to define the strategic resources that a firm consumes. For
Boeing to facilitate and create value to its consumers, the manufacturing team should strategize
on producing and setting valuable activities to achieve customer satisfaction (Eacott, 2011). The
company’s capital business is designed to deliver facilities to clients to fund business aircrafts.
Under the advanced performance and aviation program, the company is also able to create a
value chain by availing full-time customer support to local and global customers. The main
obligation of this program is to enhance novel technical assistance to customers and aiding in the
delivering of spare equipment and part whenever required (Wehinger, 2012).
The Alteon training on aviation system is also another form of value chain that Boeing Company
provides its consumers. This system allows potential clients to receive computerized trainings
that refer to all products’ characteristics. In addition to this system, the Company has a portal
named ‘The MyBoeingFleet’ that includes fundamental information about the facility. Data
include on this site enable distance customers to sustain fleets without the necessity of contacting

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the customer support team. The online presence also strategically enables potential clients to
track and manage inventories to enhance their supply chains and management approaches
(Fabozzi and Mann, 2013). Over the past decades, the company influenced its distributers using
effective procedures of controls. However, the firm is currently facing strategic issues in the
management of its supply chains because of ineffective communication systems.
Financial Analysis
Despite the increment in the prices of fuel daily, the company is still able to manager its growth
and revenue successfully. As of 2007, the net revenue of the company totalled to $66, 387 that is
a resultant increase of approximately 8% from 2006. However, because of financial problems in
2008, the net revenue decreased slightly to $60,909. The stipulated loses were recovered in the
next two financial years. In 2011, Boeing realized total revenue of $68 billion whereby
approximately 45% of the revenue came from commercial aircrafts. In reference to the quarter
that ends on 31st December 2017, the company reported a doubling of its revenue in a quarter to
$3 billion from the $1.63 revenue during the 4th quarter in 2016 (Armanios, 2006).
IV. Boeing’s Strategic Analysis: External
PESTEL Analysis
The PESTEL analysis framework is fundamental when examining the external and macro-
environmental factors. These factors include political, economic, social, technological,
environmental and legal. This framework is significant for the company since it has a
considerable impact on the produce in the airline industry. The PESTLE analysis of the company
includes:
 Political Factors: In a business, regulations, laws and policies set by the government have
a fundamental impact on daily activities (Kapstein and Busby, 2010). The Boeing

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Company has an extensive agreement and relationship with the USA’s government and
the federal aviation administration. This implies that policies set by the government
entirely drive the activities of the company such as ordering of airplanes. Moreover, the
government interference might also substantially affect Boeing’s sales of equipment to
selected countries such as Iraq, Iran, Pakistan and Afghanistan.
 Economic Factors: Considering the airline firm, prices of fuel and subsidy is fundamental
to evaluate daily activities and transaction the company makes in relation to capital costs.
In 2010, a debate rose between the company and its competitor (Airbus) which resulted
to drawing more attention from potential clients and the WTO. Conforming to that, the
increment in fuel prices, security equipment, costs on insurance and environmental
restrictions are a fundamental consideration for the Boeing Company in its strategic
approach to international growth in future
 Social Factors: These factors principally contend with cultural factors, which are
significant for the company to operate in international environments. The company
requires evaluating social dynamics that affect the product’s sales and demands in future.
This approach is applicable by changing the demands and needs for consumers because
of the increased rate of growth.
 Technological Factors: Presently, the company is using the computerized effective
initiative to design fast commercial aircrafts. Under R&D, the application of lightweight
equipment and materials in the making of airplanes in operative utility of resources is
recommended for the company. The Boeing Company has competitive advantage over
the Airbus Company using light-weighted materials the enhancement of business
aircrafts.

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 Environmental Factors: Even thorough that are no obligatory rules on emissions of
aircrafts, firms have placed individual targets to minimize emissions. The international
authority on air travel has anticipated for an enhancement in fuel effectiveness in airline
emissions. Hence, the company reduced its consumption of energy by 0.3% in 2009,
which has been adjusted by 32% since 2002 on net revenues realized (Maxwell, 2009). .
This implies that the demand for environmental-friendly and fuel-efficient aircrafts are
forcing the firm to produce ecologically friendly products.
 Legal Factors: In reference to the debate with the Airbus Company over subsidies, the
WTO has intervened in the issues. The rules are fundamental for the company to retrieve
its original position in the airline industry. Resultantly, a new US and EU intercontinental
marketplace has emerged to enhance flexibility for both airlines hence enabling
consumers to travel at affordable rate.
Porter’s Five Analysis
This framework is mainly concerned with the ideology that growth strategies of a company
should be focusses on fulfilling threats and opportunities in the exterior environment. The forces
include:
 Threat of New Market Entry: Market entry to the aircraft business is never easy which is
considerably lower on a scale of one to five due to extensive resources and costs required.
Moreover, it is not easy for a new commercial airline firm to be profitable and popular
within a short timeframe since more time is needed to reach a break-even point (Duchêne
and Serfes, 2012). However, the company might face this threat from China by 2020
since their government has sanctioned the launching commercial aircrafts.

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 Threat of Substitution: Airline products has many recommendable substitutes like buses,
cars, cruises and trains which are relatively cheaper compared to airplane charges. In
reference to global travelling, delays observed from commercial aircraft at Boeing have
led to the international leasing firm to prefer Airbus in the Asian market.
 Suppliers’ Bargaining Power: This power is very high in the aircraft business due to the
company’s loss of control over distributers during delays over the product 787. In
reference to past, the company blame its distributers for delivery delays. In this analysis,
the company will improve its capacity to produce in future to retain the bargaining
power.
 Consumers’ Bargaining Power: This power is relatively low since there are only two
global competitors i.e. Airbus and Boeing. As for consumers, it not a simple step to
transit over airlines since the two companies vary in their systems of control which might
lead to consumers spending more in terms of trainings on piloting (Schmeiser and
Ricaurte, 2012).
 Competitive Rivalry: The division of commercial airplane in authoritative for the
company since is assumed an approximate of 65% of the overall revenue which means
that losing the share of the market can lead to a negative impact on the company’s
profitability. This means that, the company’s competition with Airbus is significant
which is considered high and scaled four to five (Grebenshchikova and Yakushev, 2017).
Over the past decades, the Airbus Company conducted a market search on product
development, which indicates an approximate of 6% of revenue due to R&D in 1999
while Boeing realized 2.3%. However, Boeing decided to invest $860 million on R&D
more compared to Airbus’s $490 million R&D capital.

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V. Summary
SWOT Analysis
According to Seth (2015), an analysis of the SWOT assists firms to enhance strategic forecasting
for future growth. This approach is fundamental to analyse the company’s key internal
weaknesses and strength along with determining the external environment’s threats and
opportunities. Therefore, the SWOT analysis of Boeing also includes strengths, weaknesses,
opportunities and threats.
 Strength: One of the main advantages of the company is that there is a well-defined
leadership mandate that strategically includes evaluating the company’s large-scale
production, support actions, commercial defence, enhancement operations and evaluating
replacement systems (George, 2017). Moreover, the company is also engagement in
actions to globalize its services and products to more than 90 countries to enhance
strategic associations with relative aircraft companies all over the globe. In addition to
that, the company’s revenue doubles more that its competitor’s due to its collaboration
with the FAA and the governments in defining competitive parameters.
 Weaknesses: The Boeing Company has failed to meet the stipulated delivery deadlines of
commercial airplanes to potential clients. Over the past decade, the delays were believed
to have been caused due to poor engineering competencies or the negligence of
distributers. Due to this weakness, the market share of the company is considerably
shifting to the Airbus Company. Additional, the financial performance on selective
segments of the company has significantly been affect due to delays. For example, the
revenue from commercial aircraft subdivision declined significantly from 6% in 2010,
which led to a 13% decline in space systems in the same year. Moreover, the company is

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also facing significance issues of employment complains, environmental obligations,
contract debates and property disputes (Sagini, 2007).
 Opportunities: The rising demand for commercial aircrafts is evident in Asian countries
due to the transiting travelling trend. Moreover, the company’s surge to obtain modern
equipment and defence systems has let to creation of more opportunities for the company
to embrace new markets. The 2008’s financial crisis also opened more acquisition
chances for Boeing in the niche area of logistics and supply chains. In addition, the
international contract on inventory networking between the company and the British
airline open more up more supply chain chances.
 Threats: In consideration to commercial aircrafts, the Airbus Company is the main
Boeing’s competitor. Moreover, the company might face a new entrant threat from China
since its government has plotted on the initiation commercial aircrafts by 2020 (Hong,
2008). Another threat faced by the company is the strikes of workers as the firm’s 36% of
the staff is union-centred which reflectively indicates why the company has faced minor
delivery delays in the recent years. In addition, the 2011’s earthquake that happened in
Eastern Japan led to a significant impact on the company’s airplanes 787 and 787 since
approximately 35% of the company’s distributers operated from East Japan.
VI. Fundamental Strategic Concerns
For Boeing to recover its market impact after the 9/11 attack and to effectively compete with the
Airbus Company, it needs to strategize on launching new aircrafts (Crafton, 2015). Prior to its
success in the airline industry, the company has started to lose its market share due to observable
delays in the delivery of significant airline equipment to potential clients. Moreover, the delays
are causing the company to lose more revenues and incurring extra costs in retaining a

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competitive advantage. To launching the new product, the company will require to evaluate the
costs of the Boeing’s 787, which, according to 2008 estimate budget, totalled to more than 120%
in reference to the original budget. The urgency to launch a strategic product is referenced from
the observable delays recorded from 2008 in the scheduled delivery the 787 Dreamliner.
Another strategic concern is related to the competency of Boeing engineers. The company’s
engineers lack the expected knowledge in the making of airplanes using composite material since
the past products and commercial aircrafts were designed using aluminium materials. This
concern appears due to the company’s prompt and collective exercise of change management in
a short period. The change entailed introduction of a new technology, designing equipment and
supply chain, which resulted to an overpass of management capabilities over a significant period.
VII. Strategic Plan for Future Growth
It is apparent that the company is facing a significant strategic problem of delivery delays
because of ineffectual information systems (the Supply Chain Information System- SCIS) for
supply chains in both the internal and external environment. After experiencing an extensive
delay in delivery a particular model of aircraft, it is fundamental for the company to consider a
transforming the strategic measure on the management of supply chains (Jonker and Eskildsen,
2009). The following part includes a formulation and evaluation of a recommendable approach
for the company to overcome any future delays in the enhancement of a new aircraft for future
stability.
VIII. Formulation of the Strategy
For technological implementation in the manufacturing and designing of a new aircraft model,
the company should deal with experienced and competent equipment manufacturers around the
globe. After choosing intellectual distributers, it is fundamental for the company to invest more

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effort in R&D and collaborate with suppliers. Large companies frequently face strategic
concerns due to limitation and stoppage of communication systems with relevance distributers,
departments and manufacturers (Vanitha, 2012). As a result, cutting and limiting communication
may lead to delay in the future delivery processes or production activities. The instance of
communication limitation is apparent in Boeing’s analysis when the firm decided to employ an
external company to re-establish Boeing’s corporate culture for aircraft segment in 2010 to curb
the delay concern. However, this effort failed due to external and internal barrier to
communication (Ungerer and Herholdt, 2016). For the company to tackle current strategic issues
on delays, it needs to develop its information systems concerning supply chain systems to
enhance effective internal and external communication. Effective systems of communication
automate the circulation of data from the company to its distributers to heighten sourcing,
planning, delivery and manufacturing of products (Fearne, Garcia and Dent, 2012). The
integration of an effective communication system is centred on the approach of processes,
technology and the people.
IX. Evaluation of the Strategy
Transformation in Boeing’s Organisation (The People’s Perception)
According to Cook, Macaulay and Coldicott (2004), the people have a fundamental obligation to
enhance the implementation of a particular strategy. In order for Boeing to implement the SCIS
communication strategy effectively, the company should transform its functionality and business
level and structure. At a commercial level, the employees are obliged to implement SCIS by
applying actions to enhance current systems of formation supply. For instance, the company may
acquire the ERP licence or allow for the customization of existing packages of (Enterprise
Resource Planner) ERP to achieve the expected criterion. At a functionality level, worker will be