This document contains a case study analysis of the Boeing Company in 1998 that includes: 1) Developing external and internal factor matrices to analyze opportunities, threats, strengths and weaknesses 2) Creating competitive profile and space matrices 3) Developing TOWS, IFE, EFE, and other strategic planning matrices 4) Evaluating two potential strategies and determining the most attractive is introducing products into new geographic areas 5) Calculating the estimated worth of the business using annual profits from 1997 The case study utilizes various strategic planning and analysis tools to evaluate the position and options for the Boeing Company.

1. Homework Help
https://www.homeworkping.com/
Research Paper help
https://www.homeworkping.com/
Online Tutoring
https://www.homeworkping.com/
click here for freelancing tutoring sites
Manufacturing Strategies
Case Study
The Boeing Company - 1998
TECHNICAL UNIVERSITY – SOFIA
English Language Department of Engineering

2. 1. Developing an External Factor Evaluation Matrix for the Boeing
Company.
Opportunities Weight Rating Weighted
Score
1. A robust U.S. economy is good for most airline carriers,
which are Boeing’s primary customers.
0.08 4 0.32
2.Growth in passenger traffic averaged approximately 5.5%
over the past 5 years, leading to substantially better
financial performance for airlines.
0.08 3 0.24
3. Growth in passenger traffic is increasing at a greater
rate.
0.08 3 0.24
4. In 1996, airline demand for new aircraft rose. 0.06 2 0.12
5. New noise and emission standards are available. 0.04 2 0.08
6. Chinese travel is expected to increase by 10% annually. 0.06 3 0.18
7. U.S. defense and space spending are expected to
remain steady at $ 90 billion for the next 5 years.
0.06 2 0.12
8. There is a rising demand for some commercial aircraft
and defense products.
0.08 4 0.32

3. 9. The Internet and CD-ROMs became an easy access to
information (parts and training programs).
0.04 3 0.12
Threads
1. The forging houses that process the titanium are booked
until mid-1998. Delays in this forged material created a
bottleneck for production and delays of aircraft deliveries.
0.08 3 0.24
2. The European Airbus consortium remains Boeing’s most
formidable competitor in the commercial aircraft industry.
0.08 3 0.24
3. The European Union’s Commission helped Airbus
Industry negotiate with Boeing on alternating Boeing’s
exclusive sales agreements with U.S. major airlines.
0.06 2 0.12
4. Airbus has been successful in negotiating contracts in
competition with Boeing (China Aviation Supplies contract
in April 1996).
0.08 3 0.24
5. If Airbus merges with Lockheed Martin, Boeing could
experience stronger competition in the commercial aircraft
sector.
0.12 4 0.48
TOTALS 1.00 3.06
2. Developing a Competitive Profile Matrix for the Boeing Company.
The Boeing
Company
Airbus
Industry
Critical success factors Weight Rating WS Rating WS
Financial strength 0.12 3 0.36 2 0.24
Market share 0.12 4 0.48 2 0.24
Customer loyalty 0.10 4 0.40 2 0.20
R&D expertise 0.12 4 0.48 3 0.36
Marketing expertise 0.14 3 0.42 2 0.28

4. Product diversity 0.10 4 0.40 1 0.10
Company reputation 0.12 4 0.48 2 0.24
Social responsibility 0.10 4 0.40 3 0.30
Global economy 0.08 3 0.24 2 0.16
TOTALS 1.00 3.66 2.12
3. Developing an Internal Factor Evaluation Matrix for the Boeing
Company.
Strength Weight Rating Weighted
Score
1. Boeing is the world’s leading manufacturer of commercial
aircraft with 60% of the market.
0.10 4 0.40
2. Boeing is one of the largest U.S. exporters with over $ 10
billion in sales to foreign countries.
0.08 4 0.32
3. Boeing 737 is the best-selling commercial aircraft of all
time with 3 604 orders and 2 840 deliveries.
0.07 4 0.28
4. Boeing has been successful in teaming with other
defense and space companies and its business in this area
is widely diversified.
0.08 4 0.32
5.Boeing 777 is the most spacious, fuel-efficient airplane in
its class.
0.06 4 0.24
6. In 1996 the number of orders of jet crafts is two times
bigger than in 1995.
0.08 4 0.32
7. Boeing’s net income moved up 179% in 1996. 0.08 4 0.32
8. Defense and space business’s operating profit increased
by about 269% in 1996.
0.08 4 0.32
9. Boeing is the world’s leading producer of military aircraft. 0.09 4 0.36
10. Mergers acquisitions have given Boeing a greater
share of the military and space market.
0.08 4 0.32

5. Weaknesses
1. Long-term dept increased by 70% in 1996. 0.05 2 0.10
2. Backlog of unfilled orders at December 31, 1996 was $
87 700 million.
0.07 1 0.07
3. Boeing’s civilian sales are driven by economic cycles-
‘’feast’’ or ’’famine’’.
0.04 1 0.04
4. Boeing’s military sales are driven by external threads and
politics.
0.04 2 0.08
TOTALS 1.00 3.49
4. Performing a financial ratio analysis for the Boeing Company.
1997 1996 Conclusion
Liquidity ratios
Current ratio
Quick or acid-test ratio
Leverage ratios
Debt-to-total asset ratio
Debt-to-equity ratio
Long-term debt-to-equity 6 123 6 852 S
Times-interest-earned ratio
Activity ratios
Inventory-turnover ratio 8 967 9 151 W
Total-assets turnover
Fixed-assets turnover
Average collection period
Profitability ratios
Gross profit margin
Operating profit margin
Net profit margin
Return on total assets (ROA)
Return on stockholders’ equity
Earnings (loss) per share (0.36) 3.73 W

6. Growth ratios
Sales
Net income
Earning (loss) per share (0.36) 3.73 W
Dividends per share 0.56 0.55 S
5. Developing TOWS Matrix for the Boeing Company.
Note: The external and internal factors are the same as given in the 1 and 3. By that I
mean the numbers given after each strategy below correspond to the internal and
external factors listed earlier in 1 and 3.
SO Strategies
1. Increase international aircraft exports 10% annually. (O2, O3, O6, S1, S2)
2. Increase sales by improving and modifying present products or services and
adding new related products. (O1, O3, O4, O5, O8, S3, S4, S5)
3. Introduce present products or services into new geographic areas by opening
facilities in different countries and add new related products or services. (O3, O8,
S1, S2, S4)
4. Create a merger with another defense and space company for a successful
cooperation in the field of military and defense. (O7, O8, S9, S10)
WO Strategies
1. Increase sales by improving and modifying present products or services in
order to reduce long-term depth. (W1, O3, O4, O8)
2. Restructure to have three divisions- commercial aircraft; space and defense
systems; customer and commercial financing. (W2, O4)
3. Implement military aircrafts in everyday life (rescue operations, fires). (W4,
O8)

7. ST Strategies
1. Introduce present products or services into new geographic areas (S1, S2, S9,
T3, T4)
2. Seek to increase market share for present products or services by improving
the quality and adding new related products. (S1, S2, S4, S9, T2)
3. Create a partnership with another company for a successful cooperation. (S4,
S10, T5)
WT Strategies
1. Introduce aggressively present products or services into new geographic
areas. (W1, W3, T2)
2. Modify structure to move international operations to other divisions and split
the orders. In this way delays will be reduced. (W2, T1)
6. Developing a Space Matrix for the Boeing Company.

8. Financial Strength (FS)
Return on investment 5
Leverage 2
Liquidity 4
Working capital 5
Cash flow 5
Total 21/5 = 4.20
Competitive Advantage (CA)
Market share -1
Product quality -1
Product life cycle -1
Customer loyalty -2
Competition ’s capacity utilization -2

9. Technological know-how -2
Control over supplies and distributors -3
Total -12/7 = -1.71
Environmental Stability (ES)
Technological changes -1
Rate of inflation -2
Demand variability -2
Price range of competing product -2
Barriers to entry into market -4
Competitive pressure -3
Price elasticity of demand -2
Total -16/7 = -2.28
Industry Strength (IS)
Growth potential 6
Profit potential 5
Financial stability 4
Technological know-how 4
Resource utilization 4
Capital intensity 4
Ease of entry into market 5
Productivity, capacity utilization 4
Total 368 = 4.50

10. Conclusion:
FS + ES = 4.20 + (-2.28) = 1.92 on y-axis
CA + IS = -1.71 + 4.50 = 2.79 on x-axis
Thus, the best strategy is the aggressive strategies For the Boeing Company it could
include increasing international aircraft export and introducing present products and
services into new geographic areas.
7. Developing Internal/ External Matrix for the Boeing Company.
IFE total weighted score
4.0 high 3.0 medium 2.0 low
1.0
I The Boeing Company II III
IV V VI
VII VII IX
⇑
On the left: EFE total weighted score
Since IFE total weighted score is equal to 3.49 and EFE total weighted score is equal
to 3.06 it follows that the Boeing Company belongs to the first quadrant (build and
grow strategy).
8. Developing Grand Strategy Matrix for the Boeing Company.

11. Rapid Market Growth
Slow Market Growth
Since the Boeing Company strategy is connected with market development, product
development, concentric diversification and horizontal integration (both merger and
acquisition), it belongs to the first quadrant. It means that the company is describes
by rapid market growth and strong competitive position and this is the best possible
situation.
9. Developing Quantitative Strategic Planning Matrix for the Boeing
Company.
Strategy 1:
Add new related products or services.
Strategy 2:
Introduce present products or services into new geographic areas.
Strategy 1 Strategy 2
Opportunities Weight AS TAS AS TAS

12. 1. A robust U.S. economy is good for most airline
carriers, which are Boeing’s primary customers.
0.08 4 0.32 3 0.24
2.Growth in passenger traffic averaged
approximately 5.5% over the past 5 years, leading
to substantially better financial performance for
airlines.
0.08 2 0.16 3 0.24
3. Growth in passenger traffic is increasing at a
greater rate.
0.08 3 0.24 4 0.32
4. In 1996, airline demand for new aircraft rose. 0.06 4 0.24 3 0.18
5. New noise and emission standards are available. 0.04 4 0.16 - -
6. Chinese travel is expected to increase by 10%
annually.
0.06 2 0.12 4 0.24
7. U.S. defense and space spending are expected
to remain steady at $ 90 billion for the next 5 years.
0.06 2 0.12 1 0.06
8. There is a rising demand for some commercial
aircraft and defense products.
0.08 4 0.32 2 0.16
9. The Internet and CD-ROMs became an easy
access to information (parts and training programs).
0.04 - - - -
Threads
1. The forging houses that process the titanium are
booked until mid-1998. Delays in this forged
material created a bottleneck for production and
delays of aircraft deliveries.
0.08 3 0.24 2 0.16
2. The European Airbus consortium remains
Boeing’s most formidable competitor in the
commercial aircraft industry.
0.08 1 0.08 4 0.24
3. The European Union’s Commission helped Airbus
Industry negotiate with Boeing on alternating
Boeing’s exclusive sales agreements with U.S.
major airlines.
0.06 1 0.06 3 0.18
4. Airbus has been successful in negotiating
contracts in competition with Boeing (China Aviation
Supplies contract in April 1996).
0.08 1 0.08 4 0.32
5. If Airbus merges with Lockheed Martin, Boeing
could experience stronger competition in the
commercial aircraft sector.
0.12 3 0.36 2 0.24
Subtotals 1.00 2.50 2.58

13. Strategy 1 Strategy 2
Strengths Weight AS TAS AS TAS
1. Boeing is the world’s leading manufacturer of
commercial aircraft with 60% of the market.
0.10 - - 4 0.40
2. Boeing is one of the largest U.S. exporters with
over $ 10 billion in sales to foreign countries.
0.08 2 0.16 4 0.32
3. Boeing 737 is the best-selling commercial aircraft
of all time with 3 604 orders and 2 840 deliveries.
0.07 1 0.07 4 0.32
4. Boeing has been successful in teaming with
other defense and space companies and its
business in this area is widely diversified.
0.08 4 0.32 1 0.08
5.Boeing 777 is the most spacious, fuel-efficient
airplane in its class.
0.06 2 0.12 3 0.18
6. In 1996 the number of orders of jet crafts is two
times bigger than in 1995.
0.08 2 0.16 3 0.24
7. Boeing’s net income moved up 179% in 1996. 0.08 3 0.24 4 0.32
8. Defense and space business’s operating profit
increased by about 269% in 1996.
0.08 4 0.32 3 0.24
9. Boeing is the world’s leading producer of military
aircraft.
0.09 2 0.18 4 0.36
10. Mergers acquisitions have given Boeing a
greater share of the military and space market.
0.08 3 0.24 4 0.32
Weaknesses
1. Long-term dept increased by 70% in 1996. 0.05 3 0.15 2 0.10
2. Backlog of unfilled orders at December 31, 1996
was $ 87 700 million.
0.07 1 0.07 3 0.21
3. Boeing’s civilian sales are driven by economic
cycles- ‘’feast’’ or ’’famine’’.
0.04 2 0.08 4 0.16
4. Boeing’s military sales are driven by external
threads and politics.
0.04 2 0.08 4 0.16
Subtotals 1.00 2.19 3.41
TOTALS 4.69 5.99

14. Conclusion:
Introducing present products or services into new geographic areas is a more
attractive strategy than adding new related products or services.
10. Evaluating the worth of a business.
Business worth = 5 * firm’s annual profit
Business worth = 5 * 178 million = $ 890 million for 1997
One can observe that the profit of the Boeing Company fell to negative $ 178 million,
after rising dramatically in 1996.
Homework Help
https://www.homeworkping.com/
Math homework help
https://www.homeworkping.com/
Research Paper help
https://www.homeworkping.com/
Algebra Help
https://www.homeworkping.com/
Calculus Help
https://www.homeworkping.com/
Accounting help

15. https://www.homeworkping.com/
Paper Help
https://www.homeworkping.com/
Writing Help
https://www.homeworkping.com/
Online Tutor
https://www.homeworkping.com/
Online Tutoring
https://www.homeworkping.com/