...Executive summary Boeing was founded in 1916 in Seattle, Washington and became one of the World’s largest and leading manufacturers in making commercial and military aircrafts. The company has been involved in acquiring international firms and making strategic alliances with many aerospace pioneers in the past. Some of the big acquired and merged aerospace companies are Hughes Space and Communications, North American Aviation, McDonnell Douglas, Rockwell International and Jappesen (Boeing, 2012). The purpose of this report is twofold and accordingly the report is divided into two parts. The first part consists of a critical evaluation of the internal and external business environments of Boeing to find out to at what extent Boeing is strategically fit with its current business environment. In the second part, an improvement strategy will be recommended to the company to effectively manage its supply chain practices after critically reviewing the feasibility, acceptability and suitability of the strategy. Contents Executive summary 1 Introduction to Boeing 787 Dreamliner 3 (PART A) 4 S.W.O.T analysis of Boeing 787 Dreamliner 4 Strengths: 4 Weaknesses: 5 Opportunities: 6 Threats: 6 Boeing 787 Dreamliner competitiveness 7 Business model of Boeing Dreamliner 787 9 B787 SYSTEMS AND EQUIPMENT: 9 MANUFACTURING/QUALITY: 9 Design and features of Boeing 787 Dreamliner: 10 Strategic alliance of Boeing 787 Dreamliner 12 Challenges posed by the business...
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...Global Partnering: The Boeing 787 Dreamliner Story? VERSION 1.2 This case was prepared using publicly available information by Sveinn Vidar Gudmundsson, Professor, Toulouse Business School, France. It is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Copyright © 2015 S V Gudmundsson, Toulouse, France. Global Partnering: The Boeing 787 Dreamliner Story? C28-1-2015-1.1 "In retrospect, our 787 game plan may have been overly ambitious, incorporating too many firsts all at once -- in the application of new technologies, in revolutionary design-and-build processes, and in increased global sourcing of engineering and manufacturing content." Boeing CEO, Jim McNerney Speech in the Wings Club of New York on November 11, 2014 When giants learn to dance The world's second-largest commercial aircraft-maker, Boeing a Chicago-based aerospace giant, was founded in 1916 in Seattle by William Boeing. In 2013 the company earned $86.623 billion in combined sales for defense and commercial aircraft divisions. The U.S. aerospace industry achieved $273 billion in sales in 2013.1 All told, Boeing and its subsidiaries employ 168,000 (160.000 in 2009) people. Boeing is the 24th largest U.S. employer, including private companies and government. Boeing, with almost half of its workforce located in Seattle, was adamant that modern economics dictate a new strategic model for the company,...
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...As per your request, this memo provides an analysis of the Boeing 787 project and recommendations for the Boeing Company overcoming their challenges. The Boeing 787 is positioned to target airlines which wish to provide nonstop service on routes that required long range but did not justify larger airplanes. Since the 787 would be the first of its kind, it creates a potential market for the Boeing Company and avoids direct competition with its major competitor, the Airbus Company. Besides, with the supply of non-renewable sources of energy remained a major concern for the new generations, aircraft like the 787 that is more fuel-efficient may become a leading trend in the near future. Exchange rate in recent years also creates advantage for Boeing 787 orders as the US currency has been weak since the 2008 economic downturn in the US. In order to achieve its goal of minimizing cost, the Boeing Company has outsourced most of the components to its structural suppliers for the 787 project. By outsourcing, the company can avoid incurring unnecessary expenses such as stock up cost, wages for workers and the need of having a larger plant. Nevertheless, outsourcing would also create problems to the company. One of the major problems faced by the Boeing Company is the difficulty of ensuring the project could be completed on schedule as Boeing do not have as much control as before they outsourced. More technical problems may arise as the final assembly takes place as different components...
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...Individual assignment - Boeing DQ7. In April 2004, Boeing launched the new 787 Dreamliner with 50 firm orders from All Nippon Airways of Japan. Boeing aimed to secure 200 firm orders by December. However, by December 2004, Boeing had only 52 orders. Then Airbus introduced the A350, a derivative of the existing A330, enhanced with a new wing, more fuel efficient engines, and other new technologies. Airbus's Chief Commercial Officer, John Leahy, predicted that the A350 would draw Boeing customers and so “put a hole in Boeing's Christmas stocking”. (Source: “350: Airbus's counter-attack”, Flight International, January 25, 2005.) a) Draw a timeline to mark when a manufacturer incurs the costs of development and production. As you can see in the image value obtained from an another Commercial aircraft manufacturer, the development process takes about 6 years before the first aircraft its delivered. Development and production costs are incurred long before the delivery and test of the aircraft. Ex: of developing b) How would the costs of developing the 787 Dreamliner vary with the total quantity manufactured? The production of the 787 have both fix a variable cost, where fix cost doesn’t depend on the quantity produced. For example the non-recurrent cost of development or R&D is fixed or sunk cost independent from the quantity produced. Since average cost is the result of dividing the total cost by the quantity produced, as much unit of 787 are produced as cheaper will...
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...BOEING 787 DREAMLINER ANALYSIS The Boeing Dreamliner has been anything but dreamy for Boeing manufacturers. But this is not Boeing’s first go around with a newly designed aircraft running into what Boeing calls “teething” issues. Although the aircraft has come under serious scrutiny for a litany of issues, Boeing’s public relations have been quite calm. Instead of reacting dramatically to the media and contracted purchasers of the new 787, Boeing has kept very low key and suggests the problems are all completely fixable without a complete redesign. Whether or not this is the case, only the future will tell, but in the mean time it is reported that Boeing’s break-even target is 1,100 Dreamliners to be delivered over the next decade. Some of the issues facing the Dreamliner include the Fuel tanks, which on two separate occasions started leaking, one flight was aborted the other was during a test flight. Another issue has been the engines, which resulted in two incidences, an oil leak and the fan shaft failure, one during testing, one during a flight. Additionally a wrongly computer wrongly reported a brake issue that was enough to cancel a flight from Japan. The cockpit window cracked in another flight and four days later the smoke alert sensor caused another flight to require an emergency landing. Last but not least, the issue that sparked the first causes of alarm, the electronics. Electronics have been so problematic, that in just two months, five electronic issues...
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...DEVRY Development of Boeing 787 Dreamliner Course Project II Prepared for: Professor James Hiegel Project Risk Management Course PM595 Prepared by: Muzammil Qurashi February 19, 2012 [Type the abstract of the document here. The abstract is typically a short summary of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.] Table of Contents Introduction Page 3 Sources of Construction Project Risk Page 4 Systems to Address Construction Project Risk Page 6 Catastrophic Failure Fault Tree Page 8 Discussion of Fault Tree Page 8 Fault Tree One Page 10 Discussion of Fault Tree One Page 10 Fault Tree Two Page 11 Discussion of Fault Tree Two Page 11 Conclusions Page 14 Works Cited Page 15 Introduction Boeing Commercial Airplanes' launched the 787 Dreamliner, a super-efficient airplane in order to meet the growing needs and preferences of an international audience across the globe. An international team of top aerospace companies is building the airplane, led by Boeing at its Everett, Wash. facility near Seattle (Boeing.com), According to Boeing’s statement, t\he 787-8 Dreamliner will carry 210 - 250 passengers on routes of 7,650 to 8,200 nautical miles (14,200 to 15,200 kilometers), while the 787-9 Dreamliner will carry 250 - 290 passengers on routes of 8,000 to 8,500 nautical miles (14,800 to 15,750 kilometers)....
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...Analysis of Boeing 787: The Dreamliner Boeing announced the launch of a new jetliner called the Dreamliner (Boeing 787) and hoped to regain its leadership role in the commercial airline industry. I will apply the theories of competitive forces model and the macro-environment to analyze the Boeing case in the following exploration, and then give my suggestions. According to the competitive force model, the first point of the risk of entry by potential competitors is neither high nor low because a new company produces on a small scale even can’t cover the multiple-billions R&D, and Boeing already have accumulated experience, patents, or trade secrets that they are more effective than new companies (Hill & Jones, 2012); while the new“global systems integrator” strategy tends to create potential competitors such as China and Japan. Secondly, the commercial airline industry is a consolidated industry that the launch of A380 from Airbus directly affect the market share of Boeing in 2003, and the fixed costs in this industry is very high; thus, the rivalry among established companies is intensive. Thirdly, A380, A350 etc. are the substitutes with similar basic needs, which are threats to Boeing 787 and leads to the operation risk. On the macro-environment, the economy of developing countries grows very fast that both Boeing and Airbus believed “the passenger traffic in China would surge over 8.0% annually” (Nolan & Kotha, 2005), which tends to ease competitive pressures...
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...Development of the Boeing 787 Dreamliner Table of Contents I. Introduction II. Fault Tree One III. Discussion of Fault Tree One IV. Fault Tree Two V. Discussion of Fault Tree Two VI. Conclusions VII. Works cited I. Introduction I am the Project Manager developing the Boeing 787 Dreamliner. The development of this state-of-the-art airplane will include an international team of aerospace companies led by Boeing. The advances in this airplane will reduce the use of fuel by 20%, increase cargo capacity, increase nautical miles in a mid-range airplane, and improve passenger comfort. Boeing expects sales of 3,500 units over the next 20 years. (Norris & Wagner, 2009) To really understand the impact of multiple providers, along with the logistics to coordinate assembly, I will illustrate, discuss, and provide a conclusion using two decision tree analyses. The first fault tree will detail the delivery system and identify the failure that could result in delivery failure. The second fault tree details the lack of labor to assemble the airplane. Both pose results that have the potential to financially impact the project. The fault tree diagram will provide a visual representation of the risk and help analyze the cause by looking backwards to identify the root cause. II. Fault Tree One III. Discussion of Fault Tree One There are over 40 Companies/Business Units contributing to the success of developing the 787 Dreamliner. Nine of the...
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...Boeing’s ‘Dreamliner’ – an Operations Nightmare 1 a) Boeing is the world’s largest aerospace company and leading manufacturer of commercial jetliners and defence, space and security systems. Boeing’s products and services include commercial and military aircraft. It also includes satellites, weapons electronic and defence systems. 1 b) There are many issues Boeing had faced in introducing new technology to its ‘Dreamliner’ plane. Firstly, they had ditched the more traditional hydraulic systems for the landing gear and had gone for electric systems instead, and because of this, Boeing had left themselves working with something less familiar than the traditional landing gear to work with, therefore increasing the risks of the 787 plane and its landing. Although the technological leap was always likely to cause teething issues, it worsened when they decided to bring a high percentage of their plane parts from outside contractors. Again, by introducing new, foreign technology to its Dreamliner plane, Boeing had faced more issues than they would have because not only did it take longer for them to get the parts (delayed by 3 years) but it had also led to the parts not even fitting together properly, which causes even more delay and money to ‘fix’ the parts in order for them to somehow fit. 2 a) The use of sub-contracting may have been an unwise decision in the case of the Boeing Dreamliner because sub-contracting means employing a firm outside one’s company to do the work...
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...and carriers for their volatility (Strategic Direction, 2004) – there are so many strategic factors that can affect the financial bottom line. The last three decade we have seen such imponderables make in the battle between Airbus and Boeing even more fascinating. For Taylor (2003), the fight for supremacy between these two manufacturers puts such titanic confrontations as Ford versus Chevy and Nokia versus Motorola in the shade. This paper takes an empirical approach to examining international competition and marketing strategy adaptation in the wide-body aircraft market. The discussion topic will be organized into three sections, beginning with failure start of Airbus Industry GIC. Explaining in deep analysis of the reason behind the difficulties that Airbus faced when entering upon the civil aviation industry. While we continue on to the second part where Airbus have broken ground with a leading market share in the late 90s, what marketing strategy did Airbus initiate in order to achieve this enormous success when going against its sole competitor the mighty Boeing. Last but not least, the current market condition. The difference in strategy that each of the duopoly has apply, Airbus going for the large airliner in hub-and-spoke system and Boeing targeting at manageable size and fuel efficient in a point-to-point configuration. Airbus has come far and long, with a sizable success in gaining market share from its monopolistic competitor. But our supposition is whether Airbus...
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...Outsourcing of the Boeing 787 | | | | | | |David Mahmoodi | |01/31/2009 | |How much of a service can be outsourced before the benefits stop outweighing the costs? For the first time in the history of the company, Boeing is| |outsourcing more than 70% of the production of its new aircraft the 787 Dreamliner. This is not just the production or assembly of the plane, but | |also the specifics of engineering the individual parts. With so many parts being designed and assembled in other countries there have been | |communication issues, lengthy delays and increased costs. This paper will explore the benefits and costs of outsourcing such a big public project. | |It will discuss how Boeing or similar companies can better mange outsourced projects or more efficient alternatives to outsourcing them all | |together. ...
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...COMPANY BACKGROUND The Boeing Corporation is amongst the most significant companies on the globe. Rivaled only simply by European huge Airbus from the aerospace industry, Boeing can be a head in study, design as well as manufacture connected with industrial aircraft airliners, with regard to industrial, commercial as well as military services shoppers. Irrespective of taking pleasure in immense accomplishment in it is marketplace as well as owning an industry that entirely understands design fineness, it is crucial with regard to Boeing to guarantee carried on expansion through reliable method ingredients as well as setup avoiding dropping at the rear of in marketplace share to help shut as well as returning competitors. STRATEGY ANALYSIS AND CHOICE The main objective of Boeing's method would be to review your industrial jet industry, to be aware of your requirement which is provide, and also to produce a remedy that may match that segment. Currently, you'll find only two key people from the worldwide marketplace: Boeing as well as Airbus. Boeing will be well known because "free market" safe bet, whilst Airbus signifies your "not-so-free" approach from the European Union's sorted as well as authorities backed competitors in so-called proper markets" (Boeing Businesses Evaluation Paper). As a result, it will be important that administrators evaluation your strategy's setup, help to make concurrent modifications as well as continue being over technical developments so as to take...
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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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...Executive Summary Activities in the commercial aeroplane manufacturing industry have been outshined by the competition involving the European owned Airbus and the USA owned Boeing. These two companies exist as a duopoly at the top end of the commercial aeroplane manufacturing industry that covers the development of airplanes with a capability of more than 200 persons. Other aeroplane manufacturers also exist but at the lower end of the industry, these smaller firms mainly develop low capacity airplanes that basically convey less than 150 persons. Boeing is a United States of America based company which was founded by William Edward in 1916, the firm has been dominating the industry since its inception while on the other hand Airbus was founded in 1970 by the European Aeronautic and Space Co. (EADS) with its headquarters in Toulouse, France in other to challenge the monopoly thus far enjoyed by Boeing. The trade disputes or disagreements involving the European Union (EU) as well as the United States (US) take precedence in the rivalry or fight between this two firms. Whilst Airbus receives subsidies in the form of launch aid from the European Union while at the same time Boeing is granted right to use the United States military’s Research and development technology. Owing to the soaring operating fund as well as long product break even time associated in the airplane manufacturing industry, it can be reasonably debated or argued that it will be somehow difficult for each of...
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...------------------------------------------------- INTRODUCTION This case discusses the history of Boeing and salient forces affecting the global aircraft industry, along with the key strategic issues driving Boeing’s competitive strategies. Boeing and Airbus dominate the global aircraft industry, but have very different visions of the future of commercial air travel. Consequently, the strategies they have devised to manage the competitive environment are disparate. The case provides a unique opportunity to explore these differences, how functional strategies support the overall competitive strategy, and the critical decisions now faced by both competitors. The objective of the case study is to evaluate current industry conditions and to make corrective recommendations to improve Boeing’s strategy. The shortcomings of the company’s functional strategies should also be examined in search of measures to improve organizational performance. * Compare the two competitor's strategies. Based on the industry environment, what conclusions can be drawn? * Since Boeing made its decision to pursue a product strategy based on the point-to-point airline business model, what new market conditions have developed? What impact are they likely to have on the company’s success? * Evaluate the pros and cons of Boeing's outsourcing strategy. Is there adequate support for the company's decision to "offload" parts production? * Consider the status of commercial...
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