Swot Paper On Boeing Corp.Essay Preview: Swot Paper On Boeing Corp.Report this essayThe objective of this paper is to analyze and discuss some of the Boeing Companys business decisions using their strengths, weaknesses, opportunities and threats, also known as an S.W.O.T. analysis which is defined as, “a planning tool used to analyze an organizations strengths, weaknesses, opportunities, and threats. (Nickels, McHugh, McHugh, page 216)”. This is a very powerful tool usable by any business that is just starting out, going through a change in direction, or in the process of a major merger. The SWOT analysis consists of a few simple steps which can provide valuable insight for direction and decision making. This paper will use The Boeing Company as an example of SWOT analysis application.
The Boeing Company originally started out as the Pacific Aero Products Co., which was founded on July 15, 1916. The name was changed about a year later to The Boeing Airplane Company. The Boeing Company stayed relatively small until World War I when they were selected by Navy officials to produce an order for 50 model Cs planes for the war efforts. The company continued to prosper and by the late 1950s, Boeing President William Allen knew that the company had the scientists, the experience and the facilities to lead the company into uncharted territories. He was right, Boeing has emerged as the leading aerospace company in the world today.
The SWOT process will start by examining the internal strengths of the Boeing Company of today. One of the most dominant strengths possessed by Boeing is its ability to follow the changes in a market that is continually changing. The type of products produced by The Boeing Company demands the use of state of the art technology while maintaining all the proper safe guards for safety, regulation compliance and profitability. An example of Boeing changing with market conditions is its introduction of outsourcing. Outsourcing is defined as “assigning various functions, such as accounting, production, security, maintenance, and legal work, to an outside organization. (Nickels, McHugh, McHugh, page 257). Boeing was spending more, taking longer, and producing a lower quality product which resulted in the loss of market share. Boeing went from the leading aerospace company to second place behind the European company Airbus.
Analysis showed that Boeing was having quality issues, expensive labor, and were not responsive to immediate demands from customers. Through a process such as SWOT a strategic direction change was proposed to allow outsourcing of many of the parts and sections of an airplane. Chuck Agne, the director for Boeings Integrated Defense System estimates that “about 65-70% of the content for a given airplane is procured from outside sources.” (Destefani, Jim, March 2004.) The outsourcing in so many different areas has left boeing with the time they needed to concentrate on customer input, design concepts, and aircraft assembly which have long been a strong point for Boeing. Finding the best companies to do business with allowed Boeing to produce higher quality products, faster production from design to implementation, and also allowed Boeing to reduce inventory and the associated management of the inventory. Just In Time (JIT) production with Boeings new outsourcing partners allowed the company to focus more on producing quality product in a timely manner. Quality has always been a trademark for Boeing and with this strategy quality is on the rise. According to Chuck Agne, “Our strategy is to become an integrator. It comes down to this: we take big pieces and assemble them and build an airplane. We get anything from small to large subassemblies from suppliers. We expect suppliers to do more of the work.” (Destefani, Jim, March 2004.) This strategy allowed Boeing to become more profitable which makes the investors happy and produce a better product which makes the customers happy. One measure of the success of this strategy is watching Boeings market share and stock price increase. Outsourcing is sometimes a risky decision to make but with Boeing, it is one of their best strengths.
Another strength of Boeing is its abilityto understand and implement the airline customer requirements. Rising fuel costs are reducing airline profits and they are looking for planes that are more fuel efficient but are still technologically advanced with airline customers comfort and cost in mind. Boing was already a step ahead of the game with a fleet of airplanes meeting the needs of most airlines problems. Their new 787 model is Boeings most fuel efficient airplane and a big reason for Boeings latest success. “The 787 will provide airlines with unmatched fuel efficiency, resulting in exceptional environmental performance. The airplane will use 20 percent less fuel for comparable missions than todays similarly sized airplane.” (Boeing Company, 2006). Boeings ability to foresee the needs of the airline market has shown over the years to be a good strength.
Even the top organizations in the world have weaknesses and so does Boeing. It is the identification and reaction to those weaknesses that sets apart the strong companies from the weaker ones. As discussed early in this paper, outsourcing is a great way to cut costs and improve a product but outsourcing has its weaknesses, too. When you use outside organizations to build or supply you with a product you previously built, you have no need to pay employees who previously did those jobs. Layoffs at Boeing over the past decade or so have put thousands of employees in local communities out of work. According to Chang Mook Sohn, who is the states (Washington) chief economist, “When the Boeing job cuts do take effect; the states unemployment rate is expected to reach 8 percent–or more.” (Shapiro, 2001). Its hard not to recognize how one companys decision to outsource can have such a dramatic affect on the economy.
The leading organization in the world today producing commercial airlines is no longer Boeing. Airbus has jumped up to be number one in the market. Airbus and Boeing are by far the two biggest producers of commercial aircraft in the world, but Airbus does have one major advantage over Boeing. Airbus can subsidize much of the design, production and aircraft sales. Subsidizing is defined as; monetary assistance granted by a government to a person or group in support of an enterprise regarded as being in the public interest. (Answers.com). Airbus is an organization made up of a number of companies spread out over many countries. This allows them to take advantage of government aid in building, selling, and the all important, taxes on sales of aircraft. So while Airbus has its foot in the door of many European
s, we believe the same holds true of Boeing, which in 2009 was not on the fast track but was ranked second (behind Sanyo only) in the country with the best aircraft industry. This should give you a clue to whether or not you own all of these companies, and whether your options are limited. Let’s get back to the company’s history. Boeing has been around for over twenty four years in business. It was founded in 1932 by Thomas S. Boswell (Boeing’s founder) and had been operating since its inception by 1933. To the tune of $13 billion in the year 2000, Boeing has managed to create the best Boeing Company since it began to build commercial airplanes. In other words, Boeing is a company that, due to its history and its quality, was a success. Boeing is still very much in the business, but it has evolved from a small aerospace company to now a much, much larger firm. It makes airplanes, pilots, mechanics, and so forth a part of their business; now and then one of the more interesting parts of their business is their passenger planes. Some aircraft have the capability of fly over the United States but some of them are not so good that they cannot pass through the country. The Airbus airplane has had three major aircraft failures, both of which occurred in 1986. 2. The First Airbus A-15 over San Francisco, April 1986. Boeing’s first ever commercial plane was a Boeing 747. This 747 was operated with a 4 door cabin, an overdeck seating area that was in a good spot to be operating, and had a fair amount of open and shut doors. The 747 was able to operate from a 6,500 feet altitude, but once off the ground it got to the waterline and was stuck at the bottom. The owner of the aircraft lost control and crashed into the Pacific Ocean, bringing the Boeing 779 down just as the first (later on) commercial airliner over the Atlantic was taking off.
The second Boeing 747 over Los Angeles, November 1986. Boeing was one of the larger airlines in North America before Boeing went bankrupt during the Great Depression. Since then, at least two other Boeing 737s and one 747 have never been recovered or are currently in the making, but there is one on the way that makes the story even more interesting. This 747 with a seat size of 7,500 feet was an early attempt at a high altitude airplane that had a lot to offer passengers. These small planes could be carried in larger capacities by air travel carriers. However, because of the aircraft, the airlines were worried that passengers would be tired and hungry with them. They made planes with 4 door interior doors to allow passengers to leave behind a large storage compartment. The 747 had two more exterior doors in order to allow for an air-out when passengers made a stop in the baggage handling area or at the airport. This can now be seen at the aircraft itself. The 747 was the first commercial airliner to fly low altitude at low altitude.
The third Boeing 747 over Vancouver, July 1991. Two 737 MAXs were manufactured prior to the completion of the commercial planes, but in the early 70s