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Boeing Case Study


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Group case study analysis, powerpoint done by myself.

Published in: Technology, Business
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Boeing Case Study

  2. 2. Agenda• The Boeing Company – Background/Five Forces Analysis• Boeing in the 1990’s• The e-Enabled Advantage• Analysis• Recommendations
  3. 3. Boeing Through the Years g h e s June 17: Boeing unveils their new May 17: strategy “e- July 15: The July 15: Delivery of Enabled” at the Boeing Boeing enters Airbus Paris the first Airplane commercial outsold International Dec 1: Boeing 777 Company is aviation with Boeing for Air ShowJuly 28: Airbus to UnitedWorld War named the Boeing 707 the first enters the AirlinesI Begins time market 1914 1916 1917 1939 1954 1968 1970 1982 1995 1996 1999 2001 2003 2004 Sept 1: June 15: World April 29: Feb 19: Sept 11: War II Dec 15: Terrorist Jan 14: Boeing Thornton “T” The Begins Boeing Attacks on Connexion took B&W Wilson became Boeing mergers the United by Boeing Seaplane President – forced 757 with long- States begins for first to cut workforce makes its time rival commercial flight from 105,000 to first flight McDonnell service on 38,000 Douglas Lufthansa Airlines
  4. 4. Background• Founded in 1916, Boeing’s first customer was the government of New Zealand• George Conrad Westervelt and William Boeing built planes as a hobby• The first plane, named the B&W Seaplane was used for pilot and airmail• Boeing became the largest aircraft manufacturer in the US during WWI and WWII
  5. 5. Background• In 1954, Boeing successfully entered commercial aviation with the Boeing 707• Unfortunately, 1968 brought crisis to the aviation industry and the company was forced to lay off 60,000 employees• In the 1970’s Boeing regained profit by releasing several new 7-series models and becoming an industry leader
  6. 6. Brand Evolution
  7. 7. Porter’s Five Forces for the Airline Industry Low – New entrants need to invest Threat of tremendously as a substantial amount of Entry money is needed for the production of commercial airplanes.Low –The company hasthe power to negotiatethe price of supplies Suppliers Buyersdue to globaleconomies of scale. Low – For many years Boeing has been one of the leading aviation manufacturers in the worldwide commercial airline industry. Rivalry Substitutes High - The commercial airplane marketplace is a duopoly market, largely Airbus and High – The passenger airplane can be Boeing, resulting in low profit substituted with a train, a ship, a car, a margins in the airline industry. helicopter or a private jet.
  8. 8. Case Questions1. As case background, discuss the challenges and opportunities that Boeing faced in the late 1990s.2. What steps did Boeing take in its journey to build its e-Enabled Advantage?3. Is the e-Enabled advantage a sustainable advantage and, if so, for how long?4. What recommendations do you have for Scott Carson, leader of the company’s e- Enabled Advantage initiatives?
  9. 9. Boeing in the 1990’s• Boeing enjoyed great success through the 1980’s – Virtually unrivaled • Boeing > McDonnell Douglas & Airbus – Broke its own sales record six years in a row• Challenges arose for Boeing in the 1990’s – Gulf War – Economic downturn• Boeing’s production: inefficient model caused orders to plunge – Earnings shrank by nearly half – 9,300 of 126,000 employees were laid off
  10. 10. Challenges & Opportunities • Boeing released the 777 in 1995 – United Airlines flew the first 777 • Onboard local area network (OLAN) • Onboard server • Boeing spent years advertising these new systems – The airlines did not know what to do with all the data – Boeing did not have a good answer – The technology was ahead of its time
  11. 11. Challenges & Opportunities • Phil M. Condit: CEO from 1996-2003 – “Boeing will not be able to survive on selling airplanes alone” • Transformation – Agile – Geographically diverse – Broadly based company – Less dependent on the highly cyclical commercial jetliner market
  12. 12. Challenges Opportunities 1997: Boeing experienced a August 1996: Boeing became production delay which resulted “one of the world’s strongest in a lost of $178 million and a aerospacereported 90% profit drop Q1 1998 1999: Airbus outsold Boeing for Mid-1990s Boeing dominated the first time commercial aviation and signed military and space contracts 1998: Production reform – adopted simpler procedures for configuring aircraft to customer specifications, scheduling and ordering parts, and managing inventory
  13. 13. Competition from Airbus # of orders (1999) 355 476 # of deliveries (2003) 281 305
  14. 14. Vision 2016• “An integrated aerospace company and a global enterprise, designing, producing, and supporting commercial airplanes, defense systems, and cival space systems.” – Run a healthy core business – Leverage strengths into new products and new services – Open new frontiers
  15. 15. 1. Maintenance performance toolbox2. Airplane health management (AHM)3. Electronic Flight Bag (EFB)4. Electronic Log Book5. My Boeing Fleet6. Connexion by Boeing7. Solutions Consulting
  16. 16. Steps to e-Enabled1. Problem with differentiation from Airbus2. Management strategy formulation3. Communication of new changes across the company4. Strategies communicated to individuals business units5. Intelligent acquisitions6. CAS (Commercial Airlines Services)7. OLAN (Online Local Area Network)
  17. 17. Analysis of the e-Enabled Advantage • Will serve as a sustainable advantage – Strategic positioning – Innovation ability • Provides stakeholders with resources to reduce costs – By increasing operational efficiencies, Boeing can develop a virtuous cycle
  18. 18. IT Utilization• IT will serve as the main driver of Boeing’s sustainable advantage – Employ highly competent IT leaders – Institute a lean, yet agile infrastructure• Embed IT into existing products/newly launched services – Will drive revenue growth – Creates high switching costs
  19. 19. Sustainable Advantage• Provides information-enabled products and services – Information is easily customized• Drives asset efficiency, cost savings, and revenue growth• Unpredictable lifespan – As long as Boeing maintains innovation capabilities and leads technology growth
  20. 20. Recommendations1. Boeing must implement the consultative selling approach and provide services that move toward a partnership relationship with customers. This involves altering the business plan to fit the demands of the environment.2. Boeing needs to emphasize the importance of communicating the value of e-Enabling to their customers.3. Boeing must utilize large scale system integration to equip all products with the IT capabilities associated with e-Enabling.
  21. 21. “It’s going to happen, and the mindset is, if Boeing doesn’t do it first, someone else will.” “Right now, it’s sort of like a very pre-emptive chess game. The e-Enabled environment is going to happen, and the question is, are we going to be following or leading?”
  22. 22. Any Questions?