With the current era of hyper-competition in the global markets, contemporary organizations need to devise strategic plans for their competency. Being one of the most potential companies in the aerospace industry, Boeing Company has been observed to employ highly efficient and effective competitive strategies for its better performance in the future. Particularly, the company has largely been considerate on the underlying crisis in the global economy, and subsequently been devoted to meet the needs of the society today.
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Background Information of Boeing Company
Boeing Company is one of the largest aircraft manufacturing companies of the world, having its headquarters in the United States. Notably, Boeing has been one of the most competitive aircraft manufacturing companies whose proficiency in building military and aerospace products has been credible since its establishment in the year 1917.
According to Collopy (2004), the introduction of the company’s commercial aircraft 707 in the year 1958 was a great success since the company continued leading in the entire industry for commercial aircraft. Since Boeing Company produces a variety of aerospace products like commercial airplanes, jets and military aircrafts among other, its prosperity in the aerospace industry is high. More so, the variety of products offers the company larger customer base, increasing its profitability largely.
Considering the performance trend of Boeing Company in the aerospace industry, the company has devised strategic plan of building more superior aircrafts which are capable of carrying larger number of passengers for larger distances without immediate stops. Since Boeing 707 seemed smaller and unable to travel long distances without immediate stops, the development of Boeing 787 has been cost effective since it has larger capacity to carry more passengers for longer distances without stops.
This has been a cost-effective strategy, considering the current soaring of oil prices and higher federal taxes. On this basis, extensive and intensive technological research on producing energy efficient aircrafts has been one of the major strategies for Boeing Company on the basis of the current economic crisis (Pearce & Robinson, 2010).
Mission and Vision Statements of Boeing Company
Being a quality and integrity oriented company; Boeing has been devoted to run healthy business leveraged activities by focusing on the ability of its products to meet the needs of the global society. According to Vasigh et al (2009), the vision statement of Boeing Company is ‘People working together as a global society for aerospace leadership’.
One of the key competencies for realizing this vision in the company is its detailed customer-knowledge and focused engineering body to facilitate and maintain high competency. As reported by Maierbrugger (2011), the mission statement of Boeing Company is ‘To be a world-class leader in the aerospace industry by practicing highest ethical standards in its business activities.’ Mainly, the company’s core values are geared towards leadership, integrity, quality, customer satisfaction and teamwork for the best performance.
Internal and external Analysis of Boeing Company
Boeing’s strong brand name and company reputation is one of the company’s greatest strengths. The long-standing reputation of Boeing in the industry has resulted in new business for Boeing including a major contract with the U.S. Navy. A competent workforce is a key success factor to a successful organization.
Boeing realizes the value that competent managers and employees bring, and therefore is investing in hiring additional workforce to support new business worldwide. For example, Boeing hired approximately 1,000 people in the first month of 2011 in order to prepare the company for growth and future production requirements. An additional strength of Boeing is the quality of their products. Boeing has emphasized product quality since the company began (Maierbrugger, 2011).
Boeing’s strengths outweigh their weaknesses. One of the weaknesses for the company includes the high development cost needed to build an aircraft. The amount of time and resources required to build Boeing’s products (aircraft) are much higher than what most companies in other industries face.
Another weakness that could potentially harm Boeing is their asset/debt ratio. Boeing’s assets outweigh their debt by 15%, which provides little access to quick cash if needed by the company. Boeing’s asset/debt ratio, although undesirable is in line with its competition within the industry (Vasigh et al, 2009).
The biggest opportunity that exists for Boeing is to continue to invest in research and development to discover new technology that can be used to build environmentally friendly products. For example the airline industry, along with many other industries around the world is investing in research in an effort to find alternative fuels to power planes. If Boeing was the first aircraft manufacturer to offer a “green” fuel that their products could run off of then they would have a competitive advantage in the industry (Collopy, 2004).
Boeing, along with its competitors is constantly in a position where their business could be dramatically negatively affected by events out of their control such as terrorist attempts and natural disasters.
For example the terrorist attacks of September 11th caused fear of flying for many people and therefore the demand for aircrafts from airlines decreased until customers were comfortable flying again. Another threat to Boeing is the high tax rates and government regulation on the airline industry.
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Airlines are forced to absorb much of the cost associated with the increase in taxes since the industry is so sensitive to ticket price increases. Many of the airlines have responded by trying to extend the life of aircrafts that should have been replaced or modernized at an earlier date (Maierbrugger, 2011).
Long Term Objectives and Strategy Analysis for Boeing Company
Boeing’s most recent brand strategy to close the gap between how Boeing is perceived and what Boeing actually offers. Though Boeing is widely recognized as the reputable manufacturer of commercial airplanes, it is not widely known that Boeing is also a leader in space technology, military aircraft and defense systems, and communications (Brown, 2010). Particularly, the strategic alternative available for Boeing Company is the establishment of intensive and extensive research on innovations relating to aircraft manufacturing.
Considering the current crisis in the oil sector and increasing federal taxes, the development of more energy-efficient aircrafts through high innovations will enhance better performance for Boeing in the long-run. Though extensive research may be very expensive the current trend of the world’s technologies are highly dependent on intensive research due to their dynamic nature.
Boeing Company’s Goals and their Implementation
One of the key goals for Boeing Company is to become an industry leader by producing outstanding products, capable of meeting the needs of the society. Particularly, the ability of the company to realize this goal lies on its ability to have highly competitive engineering team which will be able to carryout effective and efficient innovations.
This goal should be implemented through the most competitive outsourcing engineers across the globe. By having highly competitive and efficient body of engineers, the company has the potential to develop the most effective and fuel-efficient aircrafts, resulting into its products becoming economical for commercial airlines (Vasigh et al, 2009).
Critical Success Factors for Boeing Company
Considering the currently experienced crises, Boeing Company should ultimately consider one of the most critical issues and anticipate addressing it. In this case, one of the main crisis events that Boeing Company should anticipate is the currently soaring fuel prices. Since most of its aircrafts are meant for commercial airlines, the company should ultimately consider the innovations in fuel-efficient products.
Considering the global trend of the oil crisis, Boeing should massively anticipate in dealing with the crisis without losing the popularity of its products. By producing fuel efficient aerospace products, it will be more efficient and economical for its customers to meet the costs of maintaining the operational costs of the products (Maierbrugger, 2011).
Controls and Evaluation Methods for Boeing Company
In order to control and evaluate the strategies adopted in the company, Boeing Company should establish a control management body to evaluate the efficiency of any innovation developed.
This set management body should evaluate the innovations both in the short-run and the long-run to determine the validity and reliability of the options adopted. Since the company’s brand name is highly reputable, the company should establish closer link to its customers to get sufficient feedback of the products invented in order to facilitate corrections for the best performance (Maierbrugger, 2011).
Generally, the future prospects of Boeing Company should entirely be based on strategizing its production patterns to meet the needs of the global society. More so, the company should ultimately consider producing larger aircrafts to increase reduce cost benefit ratio among the commercial airline companies.
By having larger aircrafts which are able to have higher carriage capacity, the company will facilitate better relationship with the airline industry, since the prevailing crisis like the soaring of oil prices and taxes will not reduce profitability in the industry.
Brown, J. (2010). Aircraft Engineering and Aerospace Technology. International Journal, 72(5): 342-357.
Collopy, P. (2004). Military Technology Pull and the Structure of the Commercial Aircraft Industry. Journal Of Aircraft, [Available online] Web.
Maierbrugger, A. (2011). Boeing expects robust growth in airline industry. Retrieved from: https://gulfnews.com/business/aviation/boeing-expects-robust-growth-in-airline-industry-1.762677
Pearce, J. & Robinson, R. (2010). Strategic Management 12th Edition. New York: McGraw- Hill Publishers.
Vasigh, B., Fleming, K. & Tacker, T. (2009). Introduction to Air Transport Economics: Boeing Case. London: Ashgate Press.