Question

Q24

Visit the Website of the Boeing Corporation and familiarize yourself with the different activities of the organization. Then answer the following questions: [3 Marks] (a) What is the business-level strategy of Boeing’s commercial jet aircraft business? (b) What tactics is Boeing pursuing to raise entry barriers into the commercial jet aircraft business? (c) What is the corporate-level strategy of Boeing? How might this strategy help the company increase the profitability of the entire enterprise?

Answer 1

1. Business level strategy of Boeing’s commercial jet aircraft business:

• Adoption of lean production & six sigma quality improvement process – this has helped in better management of warehouses in terms of inventory, space & time as well as capital ultimately improving the value chain.
• Introduction of moving assembly lines – reaching of timeliness concepts by tools being delivered directly to the shop floor instead of fetching it.
• Government subsidies – Boeing has got subsidies from NASA to develop technology which has helped them in developing their commercial jet aircraft.

2. Tactics followed by Boeing:

• Large scale implementation system.
• The power of vertical integration.
• Unique leadership style by the leader who makes innovation as an organizational culture.
• Manufacturing of fuel efficient airplanes in contrast to the enhancement of fuel prices.
• Competitive advantage gained from ongoing management strife & other problems in airbus.

3. Corporate level strategy of Boeing:

• Investments in narrow bodied 757 & wide bodied 767 – investments from the positive cash flows attained through breakeven of earlier models.
• Subcontracting for Boeing 777 – this strategy of Boeing help in reduction of developmental costs.
• Mergers – this helped Boeing in increasing their presence in defense & space side of aerospace.
• Shift of corporate head quarter – this was a signal to the investment community that Boeing was far more than commercial business.
• Decision to produce new low cost, right sized aircrafts – this helped in increased profits as there was demand for nonstop point to point flight.
• Launch of 787 aircraft – this created a stiff competition to airbus a350 & a380 aircrafts.