Executive Summary- Boeing

Although there are high barriers to entry into the aerospace industry, once inside the industry, there is even higher rivalry. Boeing entered the aerospace market just a few years after the Wright Brothers made their first flight. At this point, the industry was growing very quickly. There were so many innovations that allowed several new models of airplanes to come out every year. However, now, almost one hundred years later, the aerospace market has matured and growth has slowed down. The pace of new airplane technology was slowing down and its competitors were catching up. Boeing was a leader in technology and new models of airplanes, therefore, their prices were higher than some of the competition. The government was giving subsidies to Airbus to develop new aircrafts. Most analysts believed that the airplane manufacturer segment of the industry was about to enter an era of unprecedented price competition, “one that would lead Boeing to disaster unless it drastically cut costs.” However, the cost cutting measures that Boeing had implemented had caused Boeing to take a $178 million loss in 1997- its first red ink in 50 years. In response to this, Boeing fixed the production issues stemming from their cost-cutting measures, and decided to focus on where their customers are going and how they can help them be successful. This led to the creation of the e-Enabling Advantage. The problem that Boeing faces is whether e-Enabling could create a sustainable advantage, and whether the advantage would be able to withstand the competition at hand. One alternative, and the one I would recommend, would be to focus more on the defense division by applying new technology to the market. Most of the e-Enabling advantage has been geared towards the commercial airplane division. Boeing faced a decrease in their sales after