Control Mechanisms
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Control Mechanisms
By almost any standard, aerospace is one of the longest term businesses there is. When Boeing makes a decision to go forward with a new commercial airplane, launch vehicle or a new communication system, they are making a decision on a product that will likely be in service for at least half a century. And for this to be successful, it has to fit markets over that entire time period.
Boeing’s market strategies have long-term focus. They believe very strongly in network-centric operation (NCO) is the key to the future of the military. They marketing people are involved in understanding the markets, customers, and where they’re going.
Boeing believes the reality is, if it is possible to be more efficient and if it’s possible to make an airplane or satellite that is more economical, somebody is going to do it and it’s far better if they do it before somebody else. But no matter how well though out their strategies are, Boeing won’t be around to see the future unless they run a healthy core businesses and perform excellently.
On April 17, 2006, Boeing announced a restructuring of the company’s Wichita operation and approximately 900 additional layoffs for 2006 due to defense budget cuts, program delays and contract completions. As a result of this, 360 employees received a 60 day layoff notice on April 18th and their last day will be June 19th.
As you can see, when there are budget cutbacks from the main consumer, Boeing will also have to make cut back which unfortunately the first thing any major company will first do, lay employees off. Although this is very unfortunate, it was necessary to meet the challenges of the business.
Today, the Wichita operation site is currently working on a program in designing and upgrading different tankers and B-52 stratofortress bombers, and now currently have 2,700 workers.
Effectiveness of Budgeting and Marketing Control
Boeing takes into consideration the economical and consumer needs in each of their locations. Boeing is in many markets. Their planes are available as commercial sale to major airlines or to private buyers as well as to the military. Boeing can be found in Asia-Pacific, Africa, Middle East, Europe, South American and last but not least North America. Developing regions and new business sectors are bringing more balance to the world economy — and a stable long-term GDP growth rate of 3.1 percent is expected.(Boeing) The company looks into what the future needs of each of these locations will be. Rapidly expanding low-cost airlines will bring affordable air travel within reach of many more people worldwide, accounting for more than a third of the market for new airplanes. (Boeing) This is let consumers in economically challenged areas be able to travel, expanding the number of travelers around the world. By Boeing taking into considerations all the needs of the these different locations they are able to create planes as needed to meet the demands of their consumers.
Boeing uses a company to handle several aspects of the business so that they themselves can focus on creating and producing new products. Shared Services Group allows business units to focus on profitable growth by providing the infrastructure services required to run their global operations. The group provides a broad range of services worldwide, including facilities services, employee benefits and services, staffing, recruitment, wellness programs, enterprise help desk, security, fire protection, site operations, disaster preparedness, construction, reclamation, conservation programs, virtual workplace, creative services, transportation, business continuity and the purchase of all non-production goods and services. Boeing is one of the leaders in the going “lean” The goal: a companywide implementation of gigantic, moving assembly lines–the first of their kind in commercial aircraft history. Such an advance could speed up production by 50% or more and restore profit margins on commercial plane sales to double-digit levels. (Business Week)
Positive and negative reactions to marketing controls
Boeing is in the business of the long term market strategy. Nobody really designs a car or refrigerator with the idea that it will be in service for 50 years or more. The 737 which was originally built and flown in 1967 is still being built – although technologically far more advanced – at a healthy rate on a modern moving assembly line. These new airplanes will remain in service for more than thirty years. That leaves them with an