Boeing Company
Prepared by Ivo Ivanov, group 1323
Fac. number: 12114158
I. Introduction
In March 1910, William E. Boeing bought Heath's shipyard in Seattle on the Duwamish River, which later became his first airplane factory. Nowadays Boeing is the world's largest aerospace company and the leading manufacturer of commercial jetliners and military aircraft combined. Additionally, Boeing designs and manufactures rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles and advanced information and communication systems. As a major service provider to NASA, Boeing is the prime contractor for the International Space Station. The company also provides numerous military and commercial airline support services. Boeing provides products and support services to customers I 150 countries and is one of the largest U.S. exporters in terms of sales.

II . Company overview

1. Vision
People working together as one global company for aerospace leadership
Boeing- The future of flight.
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2. Mission
To be the number one aerospace company in the world and among the premier industrial concerns in terms of quality, profitability and growth 3. Objectives * Continuous improvements in quality of products and processes:
Boeing commitment to steady, long-term improvement in their products and processes is the cornerstone of their business strategy. * A highly skilled and motivated workforce – The most important resource is human resource: the people who design and build Boeings products and service their customers. * Capable and focused management * Technical excellence - in a world of fast-challenging technology, Boeing remain competitive by continuously refining and expanding our technical capability. * Financial strength - The business is high-risked and demands a strong financial base. Boeing must retain the capital resources to meet its current commitments and make substantial investments to develop new products and new technology for the future.

III. Boeing’s company analysis

1. SWOT analysis

Strenghts * Strong global network * Broad product line that covers most major market niches / R&D development. | Weaknesses * A hierarchical, ridged, and semi- autocratic management style, which is a product of its military heritage. * Labour problems. * Dependence on US government and WTO-incompatible subsidies | Oppurtunities * New aircraft to gain market share. * Increase demand for point to point routes. | Threats * Slowdown in the commercial jet market. * Uncertain airline industry environment. |

Strenghts * Strong global network - The company has strong international operations with customers in around 145 countries, employees in more than 60 countries and operations in 26 states. Worldwide, Boeing and its subsidiaries employ close to 188,000 people with major operations. Boeing enjoys the ownership of a brand with good and far reaching awareness on a global scale. Strong relationships with business partners * Broad product line that covers most major market niches / R&D development. - Boeing Company offers a wide range of product lines. For main commercial product such as aircraft, Boeing has 717, 737, 747, 757, 767, 777, 787 families of jetliners and the Boeing Business Jet. The company has more than 14,000 commercial jetliners in service worldwide, which is roughly 75% of the world fleet. Its product line is continuing to expand, creating new versions of its family of commercial airplanes. This pioneering technology development helps ensure Boeing stay a leader in the industry.

Weaknesses * A hierarchical, ridged, and semi autocratic management style, which is a product of its military heritage. – Since the Second World War, the Boeing company still operates under a management style in which the employers makes decisions on their own with little or no input from employees. This does not fit in the modern management and for this reason; Boeing has several problems in management when it practices racial discrimination, tussles with its union workers, and then lets its executives flee the scene to avoid accountability.

* Labour problems. - When production problems delayed delivery, Boeing was forced to increase its work force, working in three shifts, to complete the planes. This inexperienced work force created additional problems and the cost per plane is increased substantially. Moreover, the inexperienced workforce found the aircraft design too complex to implement. The managers ordered forced overtime: 50-to-60-hour workweeks became common. The problems affected other Boeing airplanes and complaints from customers began to mount. The Federal Aviation Administration (FAA) ordered special inspections of all Boeing jetliners produced since 1980 to look for defects that might affect safety.

* Dependence on US government and WTO-incompatible subsidies - At the moment, Boeing mainly gains the benefit from the US which is 65 % of the company total annual sales. Moreover, Boeing is being criticized by Airbus for the subsidy contracts as well as foreign and domestic support all amount to aid for Boeing’s 7E7 model that is double what was available for the new Airbus A380. Whilst this fact is on one hand a great strength of the company with many opportunities it could also be construed as a weakness.

Oppurtunities * New aircraft to gain market share - With the impressive show of Airbus A380 recently, Boeing also plans to release its powerful weapon in the competition with Airbus. The new version Boeing 787 which inherits the most advanced technologies and advantages of the previous models is hoped to be a big hit to the airline industries. At the moment, Boeing has received a number of orders for Boeing 787- Dreamliner and this opportunity actually shows that Boeing still insists on its successful business strategy to build longer-range, more capable, smaller aircraft that could go point-to-point and, therefore, serve city pairs directly rather than having to hook them up through a hub. The new 787 is the proof that Boeing does not lag behind the competition. * Increase demand for point to point routes - This is related to the booming market of low-cost airline. All the low-cost airline companies use point to point routes in order to reduce the costs substantially. Fortunately, this is suitable with the strategy of Boeing as mentioned in the previous parts. Airbus A380 is still unsure about its future because most of the big airline companies at the moment are not gaining profit.
Threats

* Slowdown in the commercial jet market - No industry was hit harder than airline industry after the 11th Sept. Boeing and Airbus as well have to suffer big losses in revenues from 2001. Recently, there are some good signals recently for both of the companies with the increase of order number. The demand for international tourism and delivery is increasing. However, it still does not reach the level before the terrorism event. * Uncertain airline industry environment - The airline industry environment is so dynamic and uncertain that to guess long-term or even short-term outcomes is very questionable. Competition in the commercial aircraft industry is particularly intense with regard to price, operating costs and production schedules. Increasingly, major manufacturers are teaming with global suppliers to reduce their risks, cut costs, and boost profitability.
Besides, a number of low-cost carriers continue to gain market share, remain profitable and are ordering new airplanes. There have been encouraging signs that the US economy and global air traffic are recovering and airline interest is slowly increasing. However, the timing of a commercial airplane recovery remains uncertain.

2.PEST Analysis * Political factor – * The United States Government and its Federal Aviation Administration (FAA) are particularly influential in this regard since they oversee the largest air transport market in the world. Regulations by the United States and European governments may prove to be a major driving force for orders for new aircraft and engines in the years to come. Similarly, the deregulation of European airlines, already begun in the early 1990s, holds the promise of expanded market prospects for smaller regional jets. 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. For example: currently China is the biggest market for Boeing and it is expected to remain so for the next 20 years. In fact, China, through its considerable purchases of Boeing planes, has managed to gain a lot of political leverage in the U.S.

* Economic factor - * Aircraft manufacturers rely heavily on subsidies. Recently, Boeing and Airbus are on the debate of unfair subsidies.

* 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. The fuel cost is increasing in the future. International Air Transport Association estimated that airlines' fuel costs would rise by 31% in 2015. IATA, which represents 95% of the world's airlines, also predicted that the industry would lose $6 billion.

* With several airline companies closing down and the global tourism industry in recession, aircraft prices are down by around 20 per cent. Airbus had quoted around 15 per cent less than Boeing for the IA contract during the bidding earlier in the year.

* Social

* Anti-US feelings generated by the events of the past 10 years ( wars in the Middle East ) had adversely impacted on Boeing's sales, especially in West Asia, which is a lucrative market for the industry.

* Technological factor * The biggest and most cost effective technological advancement for the commercial aircraft industry is designing planes faster. The increased production time will save costs on labour and enable better resource usage for each plane made.

* Echnological advances will also help companies use resources more efficiently. Airplane manufacturers have been using robots to achieve this. Robots are a very efficient tool in creating airplanes

* Lighter materials are another way companies are trying to utilize their resources effectively. Research has said that lighter materials used in airplanes are better in aircrafts. Conventional airplanes are made of metal, which adds a great deal of weight. In the past couple of decades, scientists have come up with a new material called composite, a synthetic material made of carbon fibbers.

IV. Competitors – Boeing’s main competitor is Airbus. The rivalry between these giants, the only manufacturers of large medium or long-range passenger aircraft, has today reached epic proportions. Airbus overtook Boeing five years ago to be number one, mostly through the success of its medium capacity long-haul Airbus A-330 and its shorter-range variations such as the A-340. This market share pie-chart of the two head to head competitors-Boeing and Airbus shows that Airbus is leading at the moment. Airbus is an airliner manufacturer based in France, with facilities throughout Germany, Spain and the United Kingdom. Airbus began as a consortium of manufacturers, but eventual consolidation allowed it to become one of the largest players in the industry. The company produces the world’s largest passenger jet, the A380, which challenged Boeing’s monopoly in the large-aircraft market upon its release in 2007. The main difference between Airbus and Boeing, the two largest producers of commercial airliners in the world, is that Boeing is a leader in larger, wide-body jets, whereas Airbus has greater sales in the smaller, narrow-body market. Competition is stiff, with Airbus booking 1,503 orders in 2013 versus 1,355 for Boeing, though Airbus pulled $13 billion less in revenue than Boeing in 2013. Here is some stastical data about the competition between two companies :

Deliveries by decade and fuselage type (through Dec 31, 2013) | Narrow- body | Wide- body | Boeing | Narrow-body | Wide- body | Airbus | Ratio B:A | 1980s | 1747 | 624 | 2371 | 74 | 402 | 476 | 4.98 : 1 | 1900s | 2466 | 1232 | 3698 | 1068 | 563 | 1631 | 2.27 : 1 | 2000s | 2974 | 966 | 3940 | 2983 | 827 | 3810 | 1.30 : 1 | 2010s | 1603 | 585 | 2188 | 1770 | 488 | 2258 | 1 : 1.03 | Total | 11910 | 3821 | 15731 | 5895 | 2361 | 8256 | |

Net orders of Boeing and Airbus.

V. Conclusion - After all this data we can conclude that the future is uncertain for Boeing. The company looks strong and stable but yet it loses market share to Airbus in regards to large carriers.The Boeing staff needs to come up not only with design innovations but also efficiency innovations in order to provide better, cost efficient aircrafts to airlines which look for reducing costs and increasing PAX capacity .On the cargo side of aviation Boeing stays strong , being preffered by players such as UPS , FedEX so the focus should be shifted to providing aircrafts for passenger transportation but at the end the aviation industry world wide exhibits strong and stable growth so Boeing has a lot of opportunities to improve for the future.