...Page |1 INTERIM REPORT ON COMMERCIAL AIRCRAFT MANUFACTURING INDUSTRY The world aircraft industry can be divided into 2 major segments: 1. Military and space aero-structure 2. Commercial Aircraft 1. Passenger aircraft – a. LCA (Large Civil Aircraft) and b. Small & medium sized aircraft 2. Cargo aircraft COMMERCIAL AIRCRAFT INDUSTRY Commercial aircraft manufacturing industry consists of very few players dominated by two big players namely Boeing and Airbus, yet it is very complex because of a number of suppliers at various levels (Tiers) creating the differences in the supply chain management of different players. The industry has undergone a steady growth and it is set to increase in the coming future due to strong demand forecast especially from emerging economies and huge backlog of orders from the major Airlines. Hence the industry continues to be profitable. But at the same time, being a capital and technology intensive industry, it poses severe challenges in front of potential players. INDUSTRY ANALYSIS- (PORTER’S FIVE FORCES) Threat of New Entrants-Low There are high entry barriers due to high R&D investment, sophisticated technology and difficulty in financing because of very high capital intensiveness. But positive economic growth and long range forecast in emerging economies are attracting new players to enter despite huge entry barriers. Cost efficient carriers from China and other economies like Mexico and Russia are trying to sabotage the duopoly. Threat of Substitutes-Low...
Words: 1163 - Pages: 5
...Management Planning Paper Introduction This paper will discuss management planning at Boeing. The planning function is critical for a company as enormous as Boeing. Boeing is one of the world’s largest aerospace companies producing jetliners, defense, and space and security systems. The company is a premier exporter that offers its products to airlines, U.S. and allied governments in over 90 countries across the globe. Their product and customized 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 Brief, Boeing.com). Planning Functions of Management Management planning involves the conscious and systematic process of making decisions about goals and activities individuals and work units will follow to provide value to the shareholders. The planning process involves a six-step process. The first step is to conduct a situational analysis that examines past events, current conditions, and attempts to forecast future needs. The second step is to establish alternative goals and plans. The process should generate alternative goals and alternative plans that can be followed in the future to achieve those goals. Goals are the target for each manager to strive for, need to be specific, measurable, attainable, relevant, and time-bound. Plans are the actions the manager will take to achieve goals. Plans...
Words: 1249 - Pages: 5
...Boeing Analysis - Writeup I. Brief overview of relevant issues and summarize of our recommendations. The key question in this assignment is whether Boeing should proceed with developing the family of 7E7 aircrafts in a post SARS and post 9-11 market. A major part of this decision lies in determining the profitability of such a major undertaking. Yet, apart from the project's stand-alone risk, the project's financial merit must be evaluated in terms of its overall portfolio impact as well. After studying this case and performing a detailed cash flow analysis, we recommend Boeing proceed with the production of the 7E7 planes based on the merit of the following pros and cons: Pros: 1) The NPV for this project is more than $7 billion. The baseline IRR of the 7E7 project is 15.7%. This is greater than the estimated WACC of 7.54%. (Detailed calculations are shown below). 2) Boeing has not introduced a new plane since the successful launch of B777 in 1994. A new offering is in order as customers look to replenish their fleet. 3) Many of the requirements for 7E7 are customer driven as the company looks for a plane with lower operating costs and lower fuel consumption. 4) Airbus, Boeing's main competitor, is catching up and even surpassing Boeing's commerical plane market share. To stay ahead of the competition, Boeing needs a new, efficient, cost-effective, and superior product. 5) With the improved manufacturing capability of lighter composite materials, producing...
Words: 1157 - Pages: 5
...are better than others. A good way to solve a case includes careful insight into the competitive situation for this company – i.e. what are their main strategic challenges – and a consistent, theory based approach to how this company can meet these challenges. Hence, it is not a right or wrong game, but more a quest towards a consistent, coherent strategy choice. When you begin, state the aim/focus of your case: When the reader starts to read your paper – he/she should know quickly what your intentions with this paper/case are. This section should be very short, but it sets expectations – what can the reader expect when reading this paper? Example: In this short paper I intend to discuss the strategic choices available to Boeing as the air traffic industry has changes...
Words: 868 - Pages: 4
...INTERNATIONAL STRATEGY 601 DUE DATE : July 23 2007 TABLE OF CONTENTS INTRODUCTION OF BOEING AND AIRBUS 4 THE SIMILARIES BETWEEN AIRBUS AND BOEING 4 THE DRIVERS OF GLOBAL STRATEGY 4 COST DRIVERS 4 MARKET DRIVER 5 ALLIANCE STRATEGY 5 Exhibit 1. The Global Product Division Structure at European Aeronautic Defense & Space Company (EADS) 7 Exhibit 2. The 7E7 Structures Work Shares 8 Exhibit 3. The partners in producing the components of A380 project 8 Exhibit 4. The Partners in Producing The Components of Boeing 787 Project 9 TURN THE PROBLEMS OF AIRBUS INTO THE ADVANTAGES OF BOEING 11 Exhibit 5. The orders and delivery of Airbus and Boeing for five years 11 Exhibit 6. The Value Chain 12 STRATEGIC CHOICE IN A GLOBAL MARKET 13 ADAPTATION AND DIFFERENTIATION TO BE SUCCESSFUL 13 DEMAND CONDITION 13 Exhibit 7. Compare between Boeing 787 Dreamliner families and Airbus 14 CONCLUSION 16 APPENDICES 17 Appendix 1. The Airbus A380 Orders 17 Appendix 2. The Boeing 787 Orders 18 REFERENCES 19 INTRODUCTION OF BOEING AND AIRBUS “Boeing is the world’s leading aerospace company and the largest manufacturer of commercial jetliners and military” (About Us: Boeing in Brief). It was established by William Boeing in 1916 in Seattle, Washington. Its international headquarters now...
Words: 3060 - Pages: 13
...The Boeing Company Brennan Stevenson Dr. Bernard Bugg ACC 242 Boeing is the world's largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems. Boeing is a top U.S. exporter, the company supports airlines and U.S. and allied government customers in more than 90 countries. Boeing products and 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 was founded in 1916 by William E. Boeing in Seattle, Washington. Boeing has expanded over the years, merging with McDonnell Douglas in 1997. Boeing entered the age of the jet transport on July 15, 1954, when the company announced the 707 prototype. The Boeing 707 eventually made its maiden flight from Renton Field, south of Seattle. Productions go ahead for the 707 was announced by Boeing on Aug. 30, 1952, as a company financed a $16 million investment. The airplane rolled from the factory less than two years later, on May 14, 1954. Its first flight that July marked the 38th anniversary of The Boeing Company. The Boeing 707 quickly changed the face of airline travel making it now possible for trans-Atlantic flights, with Pan American Airlines being the first airlines to inaugurate the new plane with a flight from New York to Paris on October 26, 1958. Following the success of the 707, Boeing has developed...
Words: 683 - Pages: 3
...FINANCIAL COMPARISON BETWEEN THE BOEING COMPANY AND LOCKHEED MARTIN Keith L. Hohl EMGT 452 Semester Project 14 December 1999 Table of Contents 1. Introduction/Study Objective 2. Boeing Financial Statement and Analysis 2.1. Background and Product Lines 2.2. Consolidated Balance and Income Statements 2.3. Divisional Financial Statements 2.4. Ratio and Trend Analysis 3. Lockheed Martin Financial Statement and Analysis 3.1. Background and Product Lines 3.2. Consolidated Balance and Income Statements 3.3. Divisional Financial Statements 3.4. Ratio and Trend Analysis 4. Financial Comparison between the Two Companies 4.1. Consolidated Comparisons 4.2. Military Aircraft and Space Divisions Comparisons 5. Summary/Conclusions 6. Bibliography 7. List of Tables 8. List of Figures List of Tables T-1: Consolidated Financial Balance Sheet-The Boeing Company T-2: Consolidated Income Statement-The Boeing Company T-3: Divisional Financial Summary-The Boeing Company T-4: Consolidated Financial Ratio Analysis-The Boeing Company T-5: Consolidated Financial Balance Sheet-Lockheed Martin T-6: Consolidated Income Statement- Lockheed Martin T-7: Divisional Financial Summary- Lockheed Martin T-8: Consolidated Financial Ratio Analysis- Lockheed Martin List of Figures F-1: Total Assets Divisional Trend Analysis-The Boeing Company F-2: Sales Divisional Trend Analysis-The Boeing Company F-3: Net Earnings Divisional...
Words: 4739 - Pages: 19
...Personal Branding Plan Paper MKT/421 7/20/15 Personal Brand Plan I am an IT Professional with over 8 years of experience working with hardware, software and network engineering. Throughout my career I have held various positions including several leadership roles. The IT industry is a very technical field where individual contributors are critical to the success of the organization. With the extensive leadership training and experience I have gained, has allowed me to stand apart from my peers and take a 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...
Words: 1056 - Pages: 5
...The Boeing 7E7 ‘Dreamliner’ Case #3 Section 1, Group 8 Introduction: The Boeing 787 Dreamliner case provides us with a brief background of Boeing’s business through the end of the 1990’s, and how company management recognized the importance of reinventing their core business in order to remain competitive in the consumer air travel segment. We learned how in-depth of a process it can be to successfully design and produce a new airplane with revolutionary technology and high-tech manufacturing requirements. Boeing struggled with these aspects of the plane, and as we learned, greatly underestimated the amount of time and money that the project would require. 1.) A: Boeing and Airbus both issued corporate reports regarding the demand for aircraft in different segments going forward. Despite differences in the overall outlook in terms of segment popularity and the exact volumes of aircraft to be required by the market, both reports were very obviously positive. The main differences between the reports were seen in Boeing’s willingness to forecast for the increased popularity of mid-range aircraft, versus Airbus’ decision to place a higher weight on the importance of international-scale jetliners. Boeing predicted demand over 20 years would call for “5,437 intermediate twin-aisle airplanes; and 889 747-size or larger airplanes” (Boeing’s 2003 Current Market Outlook). Airbus’ predictions were shifted toward the larger aircraft segments, citing “3,842 twin-aisle aircraft;...
Words: 2595 - Pages: 11
...The Boeing 777 Darden Case Study UVA-F-1017 Case Study Assignment Subject: Cost of capital − cost of equity and cost of debt; beta risk; estimation; capital structure. The task for students is to evaluate the 777 against a financial standard, the investors’ required rate of return. The general objective of this case is to exercise students’ skills in estimating corporate (divisional/project) costs of capital – cost of equity and WACC. Case Questions, Analysis, and Directions: Read and analyze the case, and prepare an “Executive Summary” of this case. Write it as if you were writing it to the members of Boeing’s Board of Directors, who may not know much about the project or finance. Your Executive Summary will include: (1) A brief description of the firm and the 777 project – in your own words (about two-three paragraphs). (2) Which equity beta(s) did you use? Why? (3) When you used the capital-asset-pricing-model (CAPM), what equity-market risk-premium and risk-free rate did you use? Why? (4) Are the betas of other (industry similar) firms important? Why? Can they be used and how? If yes, what adjustments are needed? (5) List and briefly discuss various sources of capital used by Boeing. Evaluate the costs of these individual capital components for Boeing 777 project : (i) What is the cost-of-equity (R0), assuming all-equity financing? (ii) What is the cost-of-equity, considering the Boeing’s target leverage ratio? (iii) What is the cost-of-debt? (iv) What is the appropriate...
Words: 697 - Pages: 3
...ABSTARCT: This report aims to give a brief understanding of strategic commitments, the rationality of predatory pricing and the extent to which predatory pricing strategies are used in the global airline industry. DATE: 5th March 2015 Introduction This report aims to give a brief understanding of strategic commitments and the rationality and extent to which predatory pricing strategies are used in the global airline industry. The Airline industry, being highly competitive, offers many examples of both Strategic Commitment making and Predatory Pricing strategies. What are Strategic Commitments... The commitments that firms make are two pronged, having direct and strategic effects. The direct effect is the clearly identifiable aspect of the commitment. The strategic effect of the commitment is more subtle, as it is the influence and response which the commitment generates from the competitors in the market in regards to their intended short/medium term tactical plans. Strategic commitments can be described as a form of strategy that firms have at their disposal, in which information on plans or intended actions by the business are publically released with the purpose of influencing the actions of other key market players. To be considered a strategic commitment the announced plan/action must have visibility so that those it is intended to influence can observe it, and it must be difficult to reverse, due to costs or other factors such as potential damage to a firm’s...
Words: 2211 - Pages: 9
...Boeing Co. and EADS Airbus: Oligopolistic Competition and the Effects in the Managerial Decisions. Carlos Fermin Jahn Pace University Business 150 – Contemporary Business Practice Executive Summary……………………………………………………………..............………..3 Introduction………………………………………………………………………..............……...4 Definition of Market Structures……………………………………………….….............…….5 Competition…………………………………………………………….….............……..5 Oligopoly…………………………………………………………………..............……..5 Table 1. Differences between Competition and Oligopoly…………..............…….6 The Global Market Structure for Large Civil Aircraft Manufacturers…….............……..6 Figure 1. Flow of Large Civil Aircraft (LCA) Production…………............……..7 Figure 2. Large Civil Aircraft (LCA) Markets Distribution………............………7 Competitive Criteria: Airbus vs. Boeing Co…………………………………................…….8 A) Competition by Outsourcing……………………………………...…...................8 B) Competition by the Use of Technology……………………………….…..….…...8 B.1. Uses of Composite………………………………………………....…..…8 B.2. Fly-by-Wire………………………………………………………..………9 C) Competition in the Global Market…………………………………...…..….……9 Table 2. Orders by Company (2005-2011)……………………….....…….10 Table 3. Deliveries by Company (2005-2011)……………………..……..10 Graph 1. Deliveries and Orders Overly by Company (2005-2011)..…10 D) Effects of Competition in Currency...
Words: 2755 - Pages: 12
...Topic Paper – Week 3 Boeing Commercial Air versus Airbus Group Submitted by Cita Renee’ Reid Prepared for Professor Greg Gotches BUSN 6120, Managerial Economics Spring 1, 2015 Section OE Webster University 24 January 2015 CERTIFICATE OF AUTHORSHIP: I certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course. Cita Renee Reid________________________24 January 2015 Signature Date Introduction For nearly four decades, Boeing Corporation and Airbus Group have battled for supreme dominancy of the large civil aircraft (LCA) market. In years past, U.S. held Boeing had dominated the commercial aircraft industry; however, between YY and 2013, European-owned Airbus, had slightly edged Boeing out as the top supplier. In 2014, the precarious balance was tipped once again, as Boeing delivered more aircraft to its customers; thereby, reestablishing itself as the number one manufacturer. This paper will explore the history of the companies, how they are alike and different (particularly their production process), how they approach the aircraft marketplace, where their rivalry will likely head and the most probable outcome of their ongoing competition. It will also give a brief history and overview of the World Trade Organization (WTO) 2012 ruling over the receipt of governmental subsidies...
Words: 3041 - Pages: 13
...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...
Words: 4253 - Pages: 18
...Application of Game Theory In Biman Bangladesh Airlines Application of Game Theory In Biman Bangladesh Airlines Submitted to, XXX Lecturer Department of YYY University of ZZZ Submitted by, Group “Oracles” 17th Batch B section Date of Submission: 19th March, 2012 Dated: 19th April, 201 XXX Lecturer Department of YYY University of ZZZ Subject: Solicitation for acceptance of the Report on “Application of Game theory in Biman Bangladesh Airlines”. Dear Sir, We are very much pleased to submit the report on “Application of Game theory in Biman Bangladesh Airlines” which provides us the opportunity of practicing our theoretical knowledge. Though it is our first such type of report but all the works presented here is done with utmost sincerely and honesty. We have tried our best to make this report holistic and informative enough. Besides this, there may be shortcomings. We would be grateful if you consider those from excusable point. Thanking you Sincerely yours The group “Oracles” Batch-17th Section: B ACKNOWLEDGEMENT For the completion of this we cannot deserve all praise. First of all we like to thank the Almighty Allah who gives us the opportunity to prepare this project successfully. We do believe that it is his blessings on us that we have completed this report in spite of some initial obstacles. We are very thankful to our course instructor XXX. Under his caring guidance we found the completion...
Words: 5777 - Pages: 24
