...Boeing is one of the leaders of the aerospace industry. Boeing makes a wide assortment of aircraft which includes military crafts, commercial aircraft and even weapons such as missiles. Boing also designs and manufactures electronic and communication systems. Boeing is major service provider for NASA and operates the Space Shuttle and International space station. Boeing is successful and owes a large portion of that success to its ability to plan around complicated issues such as legal and ethical standards. Boeing has to comply with legal requirements that make planning a challenge at times. Boeing must handle internal and external affairs which can either shine a negative light on the company or a positive one. An example of this is a lawsuit that was filed in 2000 that claimed pay differential between the two genders at Boeing. Though there was evidence that supported the claim of pay differential, Boeings lawyers were able to protect the company from public scrutiny. The case was settled out of court. Boeing is well known for its dedication to social responsibility. Boeing has been philanthropic and will likely continue to be. The company is a member of the Foundation for Corporate and Social Responsibility. Some examples of its efforts in the community are the refurbishing of the Chicago Air and Water show and the Royal Aeronautical Society in London. Economic conditions have a direct impact on Boeing and its planning. With the economy at a down swing and airlines...
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...Introduction Founded by William Boeing in Seattle, Washington, United States on July 15, 1916. Boeing is the world's largest aerospace company and leading manufacturer of commercial jetliners and defence, space and security systems. A top U.S. exporter, the company supports airlines and U.S. and allied government customers in 150 countries. Boeing products and tailored services include commercial and military aircraft, satellites, weapons, electronic and defence systems, launch systems, advanced information and communication systems, and performance-based logistics and training. Boeing employs more than 165,000 people across the United States and in more than 65 countries. What Boeing Does Today • Design, assemble and support commercial jetliners – Boeing 7-series family of airplanes leads the industry – Commercial Aviation Services offers broad range of services to passenger and freight carriers • Design, assemble and support defence systems – World’s largest designer and manufacturer of military transport, tankers, fighters and rotorcraft – Global Services & Support provides services to government customers worldwide • Design and assemble satellites and launch vehicles – World’s largest provider of commercial and military satellites; major service provider to NASA and prime contractor for the International Space Station • Integrate and support large-scale systems, develop networking technology and network-centric solutions • Provide financing solutions focused...
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...Running head: DIVERSITY AND THE BOEING COMPANY The Boeing Company, the Struggle to the Top Introduction to the Boeing Company Boeing is one of the greatest aeronautical companies in the world and they have developed many innovative products and are using the most state of the art managerial, engineering and research known to man. “Boeing is the world's leading aerospace company and the largest 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 operates the Space Shuttle and International Space Station. The company also provides numerous military and commercial airline support services. Boeing has customers in more than 90 countries around the world and is one of the largest U.S. exporters in terms of sales.”(Boeing.com) “Boeing is organized into two business units: Boeing Commercial Airplanes and Boeing Defense, Space & Security. Supporting these units is Boeing Capital Corporation, a global provider of financing solutions; the Shared Services Group, which provides a broad range of services to Boeing worldwide; and Boeing Engineering, Operations & Technology, which helps develop, acquire, apply and protect innovative technologies and processes.”(Boeing.com) I have worked for the Boeing Company’s Defense, Space &...
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...Boeing Synopsis The Boeing Company is an American multinational aerospace and defense corporation founded in 1916. According to its website, Boeing is the world's leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined. Boeing also designs and manufactures rotorcraft, electronic and defense systems, missiles, satellites, launch vehicles and advanced information and communication systems. Boeing is a major service provider to NASA and the prime contractor for the International Space Station as well. The Boeing Company is best known to the general public for its line of civilian aircraft, the most famous being the Boeing 747. Military sales of $27bn comprise more than half of company revenue, making Boeing the second largest defense manufacturer in the world. Military products include the C-17 Globemaster Transport, F-15 Fighter, AH-64 Apache Attack Helicopter, MH-47 Chinook Helicopter and the Hellfire Missile. The company is the main contractor for the Star Wars missile system. In 2013, Boeing reported total revenues of $81.7 billion dollars. The company operates in over 90 countries and claims the title of America's largest exporter. It has three divisions: commercial airplanes, Integrated Defense Systems (IDS), and Boeing Capital Corporation. Of the three divisions, the most prominent is the commercial airplane section. Boeing was originally founded in Seattle Washington but is now headquartered in Chicago Illinois...
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...Boeing Rocked by Scandal Jerry Gosh PHL/323 April 25, 2010 Chuck Thompson The Boeing Scandal In a New York Times, article my eyes affixed on a topic about The Boeing Company. Since the merger of McDonnell Douglas Corporation and Boeing, Boeings reputation started a downward spiral of ethical misconduct that tarnished the company, causing the companies aircraft market to plummet. The ethical misconducts lead to the resignation of Boeings chief executive, Philip M. Condit, in 2003. The world's largest aerospace company needed to change its reputation fast to stop the onset possibility of a corporation sell out of even worst the end to the Boeing corporation. Boeing called Harry C. Stonecipher out of retirement to be the next chief executive. Mr. Stonecipher was the key person who helped lead the merger of McDonnell Douglas Corporation and Boeing back in 1997. The number 1 priority is to restore Boeings credibility of these two areas, Defense Department, and Boeings civilian customers. The struggles of a company, long admired as one of the greatest American industrial successes, as it tries to expand its military business to compensate for losses to a European rival, Airbus, in commercial aircraft. During investigations, the chief financial officer, Michael Sears, for Boeing was dismissed for connections of ethical misconduct (Bowermaster, 2003). The investigations uncovered business dealings of misappropriation of funds proposed in supplying refueling tanker...
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...Boeing is the world's largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems. A top U.S. exporter, the company supports airlines, U.S., 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 has an overarching company Vision, which provides a broad and lofty inspiration goal to its employees. The Boeing Company Vision is: "People working together as a global enterprise for aerospace leadership." Beyond the reference to leadership, the company Vision doesn’t provide much specific guidance, so Boeing employees are also provided with a set of Boeing Business Imperatives, which Boeing believes will help the company achieve its vision. The Boeing Business goals are: - Detailed customer knowledge and focus that understand, anticipate and respond to customer needs. - Large-scale systems integration that continually develops and advances technical excellence. - A lean enterprise characterized by efficiency, supplier management, short cycle times, high quality and low transaction costs. Boeing is organized into two business units: Boeing Commercial Airplanes and Boeing Defense, Space & Security. Supporting these units are Boeing Capital Corporation, a global provider of financing...
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...THE BOEING 7E7 Teaching Note Synopsis and Objectives In 2003, the Boeing Company announced plans to build a new “super-efficient” commercial jet called the “7E7” or “Dreamliner.” This was a “bet the farm” gamble by Boeing, similar in magnitude to its earlier introductions of the 747 and 777 airliners. The technological superiority of the new airframe, as well as the fact that it would penetrate a rapidly growing market segment, were arguments for approval of the project. On the other hand, the current market for commercial airplanes was depressed because of terrorism risks, war, and SARS, a contagious illness that resulted in global travel warnings. Boeing’s board of directors would need to weigh those considerations before granting final approval to proceed with the project. The task for students is to evaluate the 7E7 project against a financial standard, the investors’ required returns. The case gives internal rates of return (IRR) for the 7E7 project under base-case and alternative forecasts. The students must estimate a weighted-average cost of capital (WACC) for Boeing’s commercial-aircraft business segment in order to evaluate the IRRs. As a result of that analysis, the students identify the key value drivers and distinguish, on a qualitative basis, the key gambles that Boeing is making. The general objective of this case is to exercise students’ skills in estimating a weighted-average cost of capital and cost of equity. The need for students...
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...Business Study Report: Boeing Table of Contents 1. Executive Summary 3 2. Introduction 4 3. Introduction to the Business and General Business Environment 5 3.1 Major Customers of Boeing 5 3.2 Competitors of Boeing 5 3.3 Business Environment 6 3.4 Market Structure: Oligopoly 7 4. Production Costs and Scale 7 5. Macro Business Environment 9 6. Sustainability Practices of the Business 12 6.1 Sustainability in the Production Process 12 6.2 Sustainability in the Consumption of the Goods 12 7. Conclusion 13 References 15 1. Executive Summary This report has been developed for Boeing, which is the leading manufacturing company of airplanes, space-crafts and defense systems. The main quest of this report is to explore the business and the general business environment. It has also covered the major competitors of the company and the demand curve. The report has also covered the fixed and variable costs of the business and how it has affected the cost structure of the business. The report has also explored the macroeconomic environment in which Boeing is operating and what implications it has on the business of the company. Further, the report has also included the sustainability practices of Boeing and its initiatives to reduce the negative effects on the environment from its product. 2. Introduction Boeing is a multinational corporation with its roots in Seattle, USA that manufactures and design airplanes, satellites and space shuttles. It is the largest manufacturing company...
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...is a daily focus at Boeing Corporation. The organization faces daily challenges to produce products to fit the consumer wants for air travel, comfort, and efficiency. While Boeing deals with a constant need for innovative ideas it also deal with the challenges of its main competitor airbus whom has historically been subsidized by many of the European nations to compete with Boeing for a larger share of the market. Boeing management, through excellent planning, an ethics policy that demands large returns for shareholders, and constant work to comply with ever changing legal demands of the industry has led to the constant success of the company. "It was the jet Boeing didn't build that averted what could have become one of the worst crash landings in the company's 91-year history--and cleared Boeing to conquer the skies again."(Masters, 2007). Boeing's Management team's work hard to plan what project's will be best for customers, lead to the largest returns to shareholders, and keep a reputation of being a world leader in the aviation industry. "In October 2002, executives of the aircraft manufacturer met with a group of global airline representatives at a conference center on the Seattle waterfront. The executives were trying desperately to figure out what to build next to hold off a soaring Airbus."(Masters, 2007) Boeing had made plans to build a high speed jetliner prior to this meeting. Through careful planning and expert decision making Boeing officials found that...
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...Case Study: Boeing 42 The long list of Boeing's woes seems to have reached its pinnacle in late 2003 with the scandal surrounding the Pentagon deal that alleged inappropriate behavior and the loss of documents by Boeing officials. After his seven-year reign at the head of the organization, December 2003 saw the eventual resignation of Phil Condit. Many breathed a sigh of relief at the news. The problems at Boeing were reportedly endless. From a stock price that had decreased by 6.5 percent while the company was under his leadership to increasing competitive pressures, the future for Boeing was in doubt and changes were needed. For many years Boeing graced American corporate news for their prowess as the leading manufacturer of aircraft. However, in 1994 Airbus—their main rival—booked more orders. This shocked the management executives and began a series of changes that were implemented to overcome the bureaucratic structure, outdated technological systems, and unnecessary processes in a company that had reportedly changed little since World War II. THE BEGINNING OF CHANGE AT BOEING In 1997 market demand increased dramatically and Boeing attempted to meet this surplus of orders by doubling their production capabilities instantaneously. A manufacturing crisis ensued and Boeing's reputation took a dramatic turn for the worse when they were required to halt production of the 747 aircraft for 20 days. The company had “stubbed its toe,” according to the then-president of the Commercial...
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...THE BOEING 7E7 Teaching Note Synopsis and Objectives In 2003, the Boeing Company announced plans to build a new “super-efficient” commercial jet called the “7E7” or “Dreamliner.” This was a “bet the farm” gamble by Boeing, similar in magnitude to its earlier introductions of the 747 and 777 airliners. The technological superiority of the new airframe, as well as the fact that it would penetrate a rapidly growing market segment, were arguments for approval of the project. On the other hand, the current market for commercial airplanes was depressed because of terrorism risks, war, and SARS, a contagious illness that resulted in global travel warnings. Boeing’s board of directors would need to weigh those considerations before granting final approval to proceed with the project. The task for students is to evaluate the 7E7 project against a financial standard, the investors’ required returns. The case gives internal rates of return (IRR) for the 7E7 project under base-case and alternative forecasts. The students must estimate a weighted-average cost of capital (WACC) for Boeing’s commercial-aircraft business segment in order to evaluate the IRRs. As a result of that analysis, the students identify the key value drivers and distinguish, on a qualitative basis, the key gambles that Boeing is making. The general objective of this case is to exercise students’ skills in estimating a weighted-average cost of capital and cost of equity. The need...
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...WHAT CHALLENGES AND OPPORTUNITIES DID BOEING FACE IN THE LATE 1990s? Boeing wanted to save billions of dollars and reduce developmental time which led them to lose their market share to Airbus. In hindsight Boeing should have reduced airfare and focused more on innovation landing them a head of their competitors. Instead it cost them billions, put them three years behind schedule and allowed Airbus to succeed. Seeing their mistakes, Boeing turned it around by creating an aircraft that would add value to the consumer and generate profits for the company. Boeing took the opportunity to research composite materials to improve passenger cabin comforts and an overall flying experience compared to the aluminium they had been using previously. Then Boeing wanted to add value to the consumer. Using the new composite materials and upgrading the electrical system to lithium-ion batteries fuel surcharges were reduced and Boeing was able to pass along the savings to the consumers. The increased durability of the aircraft also led to reduced maintenance costs therefore reducing the replacements necessary and in turn having cost saving effects for Boeing and the consumer. Consumers were happy and stock prices increased. Although things appeared to be going wonderfully, there was a huge concern with overheating batteries and it needed to be rectified as soon as possible. Because the batteries were outsourced, there should hae been support integrated ito the design plan for maintenance...
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...Appendix Beta βL=1+1-tDE∙βU →βU =βL1+1-tDE = 1.62/ (1+ (1-0.35)× 0.525 =1.21 1.21 = % of commercial × (βcommercial) + % of defense × (β defense) * Unlevered Defense Beta (βud ) From the information of Exhibit 10, we derived the Boeing’s unlevered defense beta by using the average of comparable firms’ beta. | Lockheed Martin | Northrop Grumman | 60 trading days NYSE Beta | 0.37 | 0.30 | Tax rate | 0.35 | 0.35 | Market-value debt/equity ratios | 0.410 | 0.640 | Unlevered Beta | 0.29 | 0.21 | Average Unlevered Defense Beta (βud ) = 0.29+0.212 = 0.25 * Unlevered Commercial Beta (βuc) 1.21 = % of commercial × (β commercial) + % of defense × (β defense) Input data from Exhibit 1, % of commercial and defense are weighted by revenues and profit. % of commercial =$28,387+$2,847$54,069+$3.868 = 0.54 % of defense = 1- 0.54 = 0.46 1.21 = 0.54 ×(β commercial) + 0.46 × 0.25 Unlevered β commercial(βuc) = 2.02 * Levered Commercial Beta (βLC) = 1+1-tDE∙βU = 1+1-0.35× 0.525∙2.02 = 2.71 Equity Market Risk Premium (EMRP) Long term EMRP is 8.4% Return on Equity Based on CAPM Model, re= rf+β∙EMRP rf=0.85% (3 month Treasury Bill rate) β =2.71 EMPR =8.4% re=0.85%+2.71×8.4%=23.61% Return on Debt rd = 5.8562% WACC WACC = DV×rd ×1-t+EVre = 0.5251+0.525×5.8562%×1-0.35+11+0.525×23.61% =...
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...What Went Wrong At Boeing? My article, The Boeing Debacle: Seven Lessons That Every CEO Must Learn, elicited spirited conversation. Several commentators noted that, in addition to the general lessons, Boeing made specific errors in the way it handled outsourcing and offshoring. Let’s take a closer look at those specifics. Boeing enthusiastically embraced outsourcing, both locally and internationally, as a way of lowering costs and accelerating development. The approach was intended to“reduce the 787′s development time from six to four years and development cost from $10 to $6 billion.” The end result was the opposite. The project is billions of dollars over budget and three years behind schedule. “We spent a lot more money,” Jim Albaugh, Chief of Commercial Airplanes at Boeing, explained in January 2011, “in trying to recover than we ever would have spent if we’d tried to keep the key technologies closer to home.” The right goal: add value for customers Let’s start with what Boeing did right. After losing market share to Airbus (owned by EADS) in the late 1990s, Boeing could have decided to focus on reducing the costs (and the selling prices) of its existing aircraft. That would have led inexorably to corporate death. Instead Boeing decided— commendably—to innovate with a new aircraft that would generate revenues by creating value for customers. First, Boeing aimed to improve their travel experience for the ultimate customers, the passengers. As compared...
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...The Boeing 777: A Financial Analysis of New Product Launch [pic] Eduardo Lioy Keya Williams Ritwik Malvi Jonas Angeles Alexis Heideck 1. Introduction/ Case Summary: The Boeing Company is an Industrial Aircraft Design and Manufacturing Firm, diversified in its offering of products for both the Defense Industry and the Commercial Airline Industry. In October 1990, CEO Frank Shrontz has announced the launch of a new product, the Boeing 777. A medium-to-large passenger aircraft, the 777 would enable the flexibility to carry passenger loads ranging from 350-390 passengers, over distances up to 7600 nautical miles. Already, Boeing has received orders from United Airlines, with delivery expected in May 1995 (p. 198). Aside from the technological advances represented in the 777, the launch of this new product promises some potential distinct strategic advantages. The launch of the 777 would provide a medium-to-large aircraft, filling a gap in Boeing’s total passenger aircraft product line. Boeing would now have a complete suite of aircrafts capable of addressing passenger loads ranging from 100-500. The 777 is specifically targeted to service routes in a high growth segment of the market, influenced heavily specifically by the high growth rate of the Asian market. The following is a financial analysis of the anticipated launch of the 777 product line. The analysis includes a comprehensive quantitative financial analysis of the projects profitability along...
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