...* Is the airline industry an attractive industry? No. Average ROI for airlines between 1992 and 2006 was 5.9% compared to U.S. industry average ROI of 14.9% (The Five Competitive Forces That Shape Strategy, Porter). Overall competitive forces are medium to high making the airline industry less profitable than other industries. * Factor impacting industry profitability: * Mature business * Oil price * Fatal accidents * Videoconferencing, VOIP (Skype), etc. reduce frequency of long distance travel * Labor unions * Basis for competitive advantage: * On-time, reasonably priced service * Brand name * Safety record * Is the airline industry an attractive industry? No. Average ROI for airlines between 1992 and 2006 was 5.9% compared to U.S. industry average ROI of 14.9% (The Five Competitive Forces That Shape Strategy, Porter). Overall competitive forces are medium to high making the airline industry less profitable than other industries. * Factor impacting industry profitability: * Mature business * Oil price * Fatal accidents * Videoconferencing, VOIP (Skype), etc. reduce frequency of long distance travel * Labor unions * Basis for competitive advantage: * On-time, reasonably priced service * Brand name * Safety record Buyer (Passenger) Power * Passengers have many choices to buy airfares via online websites * Low switching costs ...
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...Management Planning – Boeing Boeing is the world’s leading aerospace company and the largest manufacture of commercial jetliners and military aircraft combined (Boeing, 1995-2010). To maintain their success of the industry’s leader, one must look at the function of management planning along with the organizations levels of planning and how they are aligned to help the company maintain the leading position within the aerospace industry. First we must look at the function and focus of management within the organization. According to Splinder (2008), “the management model used to direct the company’s planning focus is simple but an effective method for planning, acting, analyzing, and reinforcing methods that produce results. These are driven by Boeings aptitude to encourage growth and leadership from within the organization.” Boeing’s management established goals and objectives focused on financial performance, quality, customer satisfaction and growth, and growth in productivity (Splinder, 2008). The company would need to deliver results with performance and stock prices and hold employees accountable to achieve their goals and objectives. The company would also need to consider the impact legal issues, ethics, and corporate social responsibility would have on their success in achieving their plan. In 1996 as the company was merging with McDonnell Douglas Corporation, the company would go through a legal issue and experience the impact this issue would have on their...
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...Q1.How has Embraer managed to succeed as a global competitor from within the confines of an emerging economy? Advantages and disadvantages Embraer has derived from the Brazilian context. Strong government support created competitive advantages in the aircraft industry and led Embraer to become a global player. As a factor condition in the determination of national competitive advantage by Porter (Exhibit 1), the government established an environment where Embraer was able to procure raw materials easily through no tax or duty on imports. To support Embraer’s business, related and supporting industries were developed by the Brazilian government setting aeronautics as a priority to grow the nation’s economy. The government tried to develop this industry not only for military needs but also for the civilian sector, so the company enjoyed special privileges such as being the supplier of choice for Federal agencies. These led to the successful entry into the U.S. market through certification from the U.S. FAA, resulting in Embraer capturing a major share of the commuter turboprop market. Advantages: • Embraer’s most profitable years came after the company was privatized with approval from the government in December 1994. In addition to increased flexibility, the privatization allowed Embraer to reduce the workforce and introduce organizational changes such as revamped incentive structures. • The Brazilian economy provided Embraer with lower labour costs (e.g. $10/hour lower...
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...Bargaining power of suppliers The airline suppliers are mainly aircraft manufacturers, labour, fuel companies and there isn’t a lot of cutthroat competition among suppliers. Also, the likelihood of a supplier integrating vertical is rare. They have high bargaining power, since there is limited number of suppliers; companies have to use fuel and there is no substitute currently. Also, airlines will choose a trustworthy supplier, which means the scope of suppliers will be narrowed down to fewer choices. There are only 2 producers Boeing and Airbus- Market for production of planes is a duopoly therefore the bargaining power of suppliers is very high. This means that these companies have been charging very high prices for their planes to all airline companies. Being and Airbus can obtain raw materials and components from competitive supplier markets. However, most parts suppliers do more business selling replacement parts to airlines than selling original equipment to Boeing and Airbus, so the airframe makers do not have an iron grip on their suppliers. When the airline industry does well and orders more planes from Airbus and Boeing, parts suppliers can negotiate more favourable supplier contracts for themselves. All airlines employ various subcontractors around the world to complete parts of production which will be finally assembled at their assembly plants. But the usage of rare resources such as carbon-fibre and requirement for specialized facilities for production has shifted...
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...more active role in the organization and its strategy. I continuously strive for my own personal development, including going back to school as an adult to achieve my bachelor’s degree. I understand the importance of continuous development and work to instill that passion in my work and across my teams. Companies to work for The top three companies that I am interested in working for are Locke Martin, Raytheon, and Boeing. Each of these companies, are involved in the aerospace industry and hold government contracts. This line of work related to the IT development for aerospace has always fascinated me. I truly enjoy investigating the electronics division, along with the radar technology is amazing works of science. Lockeed Martin Lockeed Martin is the number one IT provider for the Federal Government (lockeedmartin.com, 2015). For an organization to win government contracts they must meet a very high standard of process flow. “Lockeed Martin does so much more than just planes they work on space, aerospace, defense, air traffic, predict cyber-attacks, personal/financial data security, and much more” (lockeedmartin.com, 2015). Working for Lockeed Martin would allow me to bring some of what I already do know in the IT field and apply it to what I want to do in my dream job. Raytheon Raytheon does much of the same thing that Lockeed...
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...Boeing Company is in the manufacturing industry of complete aircraft, aircraft engines, propulsion units and other related equipment or parts; they develop and make prototypes of aircraft and complete aircraft overhaul and rebuilding. Major competitors are United Technologies Corp., Lockheed Martin Corporation, Northrop Grumman Corp., and General Electric Company. The Boeing Co., owns a whopping 34.8% of the market share in this industry, more than double the amount of their largest competitor, United Technologies. Boeing and their competitors have seen a sharp increase in fuel prices and airlines around the globe have a need to renew or expand their current fleets. The overseas exporting market is seeing ongoing recovery, representing the industry’s largest market. This is largely due in part to the American dollar not being as strong as oversees currency, allowing for American made products to be cheaper through exports (imports for buyers). The industry is estimated to grow 2.8% per year up to 2017. With strong domestic and international demand and a decrease in federal funding, Boeing Co., must incorporate technological improvements to drive growth in the next 5 years to maintain their share of the market. With fuel costs on the rise, Boeing will be forced to create airplanes and parts that can be designed to minimize fuel consumption, thus increasing revenue for the company. Airline companies want a product that is more fuel efficient and will utilize any manufacturer...
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...Boeing and its Management Planning Christopher Bayles MGT/330 October 2, 2011 Bill Escue Boeing is one of the biggest aviation companies in the world with relations to a number of different countries. They produce products for commercial and government use as well as have contracts with National Aeronautics and Space Administration (NASA). Management planning is one of the primary key focuses to Boeing because of the size of its massive corporation. They create some of the top high-end equipment for medical, commercial, and government use. The primary workings of the company includes goods that aid in the carrying of cargo, people, and other equipment used by the government. The Federal Aviation Administration (FAA) oversees the operation of aircrafts for safety concerns. Because of the safety concerns, Boeing conducts very extensive planning to operate a well-organized and successful business. Planning includes precautionary needs for the future, figuring out the departments’ objectives, activities that could be of some concern to a company, and a company's techniques they will need to accomplish a successful result (Boeing, 2010). During plans making Boeing has to consider the unpredicted problems so that there can be no possible mishaps that could happen. By setting obtainable goals in marketing, sales, mechanical markets and engineering, and updating and training employees to be more effective will ensure that the products exceed high expectations and...
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...Boeing Management Planning I have chosen that the company I an going to do research into is that of Boeing. Boeing is considered to be a leading company that manufactures jetliners and military aircrafts. Boeing provides products to over 150 countries and employees ore than 165,000 people. (Boeing, 2011). Boeing is also one of the companies that currently works with the National Aeronautics and Space Administration (NASA), they provide support for the space shuttle. There are many factors that can and will influence the companies overall success, these can be internal factors as well as external factors. I will briefly discuss some of the things that works well for Boeing including management function, ethics, and factors that will influence the company's different aspects of planning. Boeing by the looks if it has a very structured aspect of management, this consists of the Chairman, president, senior vice president, and administration. The company states that they values culture which is what guides them as a business. Boeing has a comprehensive approach when it comes to how they want to me known and that includes the following: • Boeing strives to be creative in the products and services that they provide for their customers world wide (Boeing, 2011) • Boeing their business with a responsible and forward thinking manner. This mean commitment to values, customer satisfaction, safety, quality, and integrity (Boeing, 2011). • Boeing partners with different organizations...
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...advantage as noted in the below chart and we will discuss the comparative advantage of the US and Japan base on the following calculations. | United States | Japan | Cereals | +0.83 | -0.99 | Mineral Fuels | -0.82 | -0.93 | Pharmaceuticals | -0.25 | -0.51 | Vehicles | -0.41 | +0.81 | Aerospace | +0.58 | -0.44 | Electrical and electronic equipment | -0.26 | +0.41 | Optical, photo, medical and scientific equipment | +0.09 | +0.21 | Apparel (woven) | -0.92 | -0.96 | Finance and insurance | -0.10 | +0.08 | (p. 376) United State’s comparative advantage The United States has a few things they do very well in the global market the top commodity that the US is able to capitalize on in the global market is cereals. The US is right next to Australia and followed by Canada when it comes to cereal. I think we can attribute this to the natural resource we harvest which is grain. The US seems to have a great opportunity because we have such fertile land to plant and grow grain for cereal. The US is at the top of the Aerospace market when it comes to comparative advantage This may change in the near future since the government has cut spending in Aerospace technology unless private companies decide to embark on this endeavor. Finally the US does show some...
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...Ethics At Airbus 1) In each of the cases described above who benefits and who suffers from the alleged ethical and legal lapses of Airbus? Ans – When we observe across cases, its mostly the state and the airline company who is at loss due to these legal and ethical lapses Airbus – Sabena Case: As long as Van Espen’s case does not prove anything against any party, Airbus has gained significantly from the deal as it would have earned around $5bn order from the deal. The party which suffered significant loss should be the state as the Belgian government had 50.5% stake KAC – Airbus: Airbus gained a much needed order bill of around $1.1bn and possible order of $0.9bn, the employees of KAC Mr Al Mishari and its subsidiary ALAFCO, Dr. Mallalah & Mr El Fekih possibly would have earned (only a possibility) whereas the state of Kuwait higher costs, lost cash, earned higher depreciation costs and probably had to write-off it off India Inc. & Airbus: Airbus like all other cases earned the order book despite Boeing offered a deal to the Indian government $140mn cheaper. The state and eventually the airline paid $140mn more, raising its depreciation costs, debt service costs and got hold of carriers which were not properly tested thus risking the life of passengers Across cases observed, Airbus has been smart enough to save itself a persecution almost anywhere and has got large order books worth billions of dollars acquiring half of the market share but if Airbus is found...
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...Boeing Innovation Strategy Shayne Arndt, Lee Eadie, Sridhar Lakshminarayanan, Norberto Rodriquez, Phylicia Smith, and Amber Thompson STR/581 April 2, 2012 Cassandra Molavrh Boeing Innovation Strategy Innovations are a fundamental prerequisite for competitiveness. The economic crisis forced most businesses to conserve funds in various operational areas. Innovation strategy in any business or industry involves aligning the product life cycles in the company with the various research and development activities. Boeing is the world's largest aerospace company and leading manufacturer of commercial jetliners and defense, space, and security systems. A top United States exporter, the company supports airlines and United States and allied government customers in 150 countries. Boeing products and tailored services include commercial and military aircraft, satellites, weapons, electronic and defense systems, launch systems, advanced information and communication systems, and, performance-based logistics and training (Boeing, 2012). Boeing’s Background In the ever-changing business environment, organizations are constantly seeking ways to diversify products and revenue sources, create the best organizational structure, and foster productive work environment cultures through innovation strategies. Boeing is a leading innovator in the aviation industry. The organization faces industry-wide challenges including increasing fuel costs, price-conscious customers, and increased...
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...Boeing versus Airbus: The End Results becomes an Air Force Debacle Jason Bourne Park University November 17, 2009 Abstract This paper explores the highly controversial bid process and subsequently protest for the Air Force’s KC-X refueling tanker. The main participants for the new refueling tanker contract were Boeing and Northrop Grumman (NGC) as prime contractor through a joint venture with the European Aeronautic Defense and Space Company (EADS). The Boeing Corporation has been the standard in the aerial defense industry. Their challengers, NGC and EADS, the owner of the Airbus, comprised of two very formable entities capable of taking on the aerospace giant Boeing. There were a lot at stake. Boeing has considered in being the “pride of American aerospace” unseated from the top perch of the aerospace industry by losing military contract potentially worth about $100 billion dollars. (Herszenhorn and Bailey, 2008) Overall, Boeing was a heavy favorite to win the contract being that it has manufactured tankers in the past for the Air Force. Two weeks later after the announcement, Boeing filed an appeal through the General Accountability Office (GAO) to protest the Air Force’s decision. This paper will discuss the Boeing’s basis of appeal and contrast them with the GAO’s findings in their protest. The source selection of the aerial refueling tanker contract became one of the most controversial procurement process in the history of the United States. Boeing versus...
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...Management Planning at Boeing Brian Newton MGT/330 December 1st, 2014 Steven Friloux Management Planning at Boeing To be successful in today’s competitive business world, organization and strong leadership is key. At The Boeing Company, this is no different. As one of the largest corporations in the world, they strive to set goals and plan a future around reaching those goals in a way that they can be the most prosperous. In the complex business economy of today, there are always influences that affect the way leadership paves the way. Issues regarding legality, ethics, and responsibility that follow being a major corporation are just a few. These play a major role in strategic, tactical, operational, as well as contingency planning. The Boeing Company and its leadership continually reach toward improving the organization, and the daily planning is inspired by numerous factors that shape who they are. Planning Functions Having an organized plan can be important to success and growth of a company, and Boeing follows the basic template of the planning process. It begins with the initial goal to be set, followed by an evaluation of the situation to determine what resources will be needed. This analysis is drawn from different areas such as past and current work conditions and how they can improve. A derivative plan is also brought to the table before finalizing the final decision. And lastly is...
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...is to describe how ethical principles can address organizational issues. The organization that I have chosen to explore is the Boeing Company specifically and the aerospace manufacturing industry as a whole, more generally. I will cover the role that external social pressures play in influencing the industry in both their compliance with government and professional ethics. I will also endeavor to highlight how the pressures brought to bear on the industry by the public and the government is relevant to their decisions both corporately and individually by their employees. Finally, I will share my thoughts on the relationship between legal and ethical issues with regard to the industry. To begin then, let’s explore what role external social pressures have in influencing the Boeing Company and by extension, the aerospace industry’s organizational ethics. The level of trust that must be present by the public in the company that builds the airplane they fly in is best described in the words of the Boeing employee code of conduct “…must not engage in conduct or activity that may raise questions as to the company's honesty, impartiality, or reputation or otherwise cause embarrassment to the company.” (Boeing, 2014) Boeing and the entire aerospace industry are hyper aware of their image and the perceptions of the flying public. When social pressure is brought to bear the entire industry takes notice...
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...Case Synopsis Boeing enjoyed global market leadership in the aerospace business for several decades. As is all too common for market leaders, Boeing fell victim to organizational inertia. The company failed to revamp its production process and come up with new and innovative products. In contrast, Airbus emerged as a major competitor of Boeing within two decades of its inception. As a new company, Airbus did not suffer from inertia, but rather introduced a flurry of innovations in its planes. The manufacturing system was also very lean as Airbus setup its product plant relatively recently (compared to Boeing). It seems that in the head-to-head competition, Airbus presently has the upper hand over Boeing. Boeing must find a way to reinvent itself to regain its position as a global aerospace leader. Case Questions 1. Conduct a five forces analysis for Airbus. What industry forces pose the most serious challenges to airbus? One of the five forces that poses the most serious challenge of rivalry. Airbus and Boeing are competing against each other for customers and best prices. Airbus found a niche in the US market for smaller aircrafts. The company was innovative in its design and introduced new products to market. Boeing was not successful in developing as many products as Airbus. Another challenge would be the bargaining power of the buyers. Buyers will choose the product that is more cost effective. Airbus is also in a position to charge lower prices than...
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