Boeing Aerospace Company

Boeing, the world’s largest aerospace company, is commonly known for their production of commercial airliners; however, they also have a presence in satellites, weapons, defense systems, communications systems, and even logistics. Boeing prides themselves in innovation and proclaims their product line is ever changing to meet exactly what their customer’s need. Boeing is known for their diverse and multinational teams with the ability to leverage insights to adapt to global demands. Boeing operates under the following three business units: Commercial Airplanes, Defense, and Space & Security (Boeing, 2018). Boeing’s stakeholders include employees, customers, suppliers and investors on a global scale. Success within the company cannot be realized without these major players. According to the company, “operate as one Boeing” is the headline for their enterprise strategy (Boeing, 2018). By aligning all stakeholders with the same vision and strategy, Boeing can operate profitably and competitively which ultimately increases shareholder values. As of 2015, Dennis Muilenburg has served as Boeing’s CEO. During his time, he has had to focus on both short-term and long-term goals. One of the long-term goals, as explained by Muilenburg, is to grow their service unit from $15 billion in revenue up to $50 billion by 2025 (Thompson, 2018). A short-term goal that will help Boeing achieve this is to eliminate cyclicality. In other words, Boeing wants to mitigate periods of high and low demand. To do this, Boeing has understood the importance of remaining dominant in both commercial airline production and military applications. Muilenburg highlights a trend in which commercial demand is high when military demand is low and vice versa. Another long-term goal identified by Muilenburg includes navigating space via low-Earth-orbit (Boyle, 2018). This is achieved by reaching various short-term goals and advancements, such as the CST-100 Starliner capsule that will transport astronauts as early as 2019. The company recognizes the need for FAA updates, such as declaring airspace corridors for reaching Earth’s orbit. The entire traffic infrastructure will need to be assessed. Finally, Muilenburg recognizes the short-term goals of maintaining high shareholder values. This requires Boeing to continually focus on improving efficiencies and capacities in the supply chain to fulfill an expected increase in aircraft orders. This goal also requires finishing the KC-46A tanker plane for the Air Force that has been running beyond the cost and time budgets by a significant amount. This project is expected to be completed by the end of 2019 (Boyle, 2018). This is the largest aerospace company in the world, which is prominent in the production of commercial jetliners, security systems, protection and the most significant service provider of aftermarket support. They are also famous for their diverse teams who are capable of leveraging insights to adapt to the global demands of their markets. Their operation revolves along three business units which are security, commercial airplanes and space (Boeing, 2018). Part of their stakeholders is customers, suppliers, investors, and employees who are the main players of the company's wellbeing. Their dream is to link, explore, defend and motivate the world through aero scope invention. In this paper, we will discuss the company's explanation of their goals and how their team is working to devise the set strategies. In their strategic plan, part of their goals include, to be the leading company in the market, to fuel the growth through quality production, to design, manufacture and offer excellent services, provide accelerated innovation, provide global scale and depth, to be the best team with the most effective and talented leaders and to be the top corporate citizen among others. Their goals will be achieved through the new technologies that are coming up in the business models where some transportation companies are working to rebrand themselves. Despite their enjoyment of success in their market, and has dominated in a high demand industry, their goals rely on the engineering excellence (Boeing, 2018). This makes them give strict conditions to their stakeholders to safeguard development through the reliable, planned invention and execution so that they can escape falling behind the market portion to near and upcoming competitors. On the goal of stable Defense commerce development, the firm has been experiencing growth due to the strong performance, and the team is stipulating construction of a new research facility which gives a broad strategy for them to foster diversity. Their plan is visible in their zero unlimited growth in the greenhouse projects on gas emissions, management of solid waste and recycling of used water, which is sent to landfill and hazardous waste (Garberry, 2010). Their setting of aggressive targets with the aim of improving their operational footprint by the year 2025 increased their product deliveries by 71 percent. This was triggered by their understanding of the importance of remaining dominant in military applications and the production of commercial airlines where they highlighted a trend where commercial demand will be high when the military market is low and vice versa. Effective of the implementation of Boeing's plan, there will be a revisiting of their short-term goals, which will give way for the long-term goals through the maintenance of their stakeholder values. In doing this, there will overall improvement of their supply chain and fulfill the expected increase in the aircraft orders which will also make them finish the KC-46A tanker plane that is needed by the air force for proper running (GOA, 2013). If completed it will save the air force on their cost and time budgets. The way the firm is administered by its workers, directors and business officers, who are headed by the chief executive officer, the laid down plans will be implemented and applied an action that will make it continue to maintain its standards worldwide. The company has been outstanding in their quality service provided to their clients through Boeing Capital Corporation, global services, their services in defense, space and security, and their high-quality commercial airlines. Since their goals are given good timing, it is evident that they will be implemented in due time and this will be an added advantage. Although Boeing is focused on goals and strategic alliance, part of that means to give back to the community. Boeing recently this week donated six million dollars as a gift to Iowa State University for student research (Nozicka, 2018). A significant portion of the gift will go towards building a new student innovation center for the university. This student center will have labs and workshops to encourage students to engage in resources such as planning, designing, and making things. The new student center will be open in 2020 for students to enjoy. University officials feel this will help elevate the university for future students. Boeing is hoping that a portion of the donation will also be spent supporting undergraduate Engineering students. Committing to education as an innovative partnership will ultimately align with Boeing’s strategic alliance to create value and help build better communities worldwide. The Boeing Company’s ambitious goal to be the global leader in not only commercial aircraft, but in private and commercial space travel far into the future, is well supported by their current strategy, and will put them in an incredibly unique position within a market that is still in its infancy. This goal is best represented by CEO Muilenburg’s comment “I certainly anticipate that we’re going to put the first person on Mars during my lifetime...and I’m convinced that the first person that gets to Mars is going to get there on a Boeing rocket” (as cited in Boyle, 2018). While other competitors such as Airbus have been and continue to be involved in space flight, they have set their sights mainly on the pure hardware side of market, such as the Arienne launch vehicles for satellites and the ISS service modules (Airbus, 2018). Partnerships, joint ventures, and acquisitions through Boeing HorizonX Ventures will allow Boeing to supplement its competencies that will allow it to achieve a much broader goal than competitors - an ecosystem to go along with the vehicles (YOUTUBE). This insourcing, acquisition, and vertical integration strategy has had previous success within Boeing Global Services in the commercial aircraft sector. Boeing’s strategy for space will also benefit from the resources of the organization, which smaller or more single-minded competitors cannot replicate. Boeing is able to leverage the entire company and apply learnings and expertise from their commercial, defense, and avionics sides of the business (Boyle, 2018). Their significant manufacturing and and delivery experience along with immense existing assembly lines and access to capital is a formidable force for SpaceX & Blue Origin to contend with. Lastly, Boeing is integrating themselves into the fabric of this arising market. Through collaborations such as the United Launch Alliance and consulting work for NASA, they will solidify themselves as the go-to partner for space (Boeing, 2018). Their ongoing work with the FAA to help define a new generation of flight regulations, unmanned traffic management protocols, and space/launch corridors - a planned move that also supports another of their strategies for urban mobility solutions such as unmanned flying taxis and cargo drones - will serve to structurally embed Boeing into the future of the low earth orbit, space exploration, extra-planetary endeavors. The successful completion of Boeing’s loftiest goal yet will see them “deeply involved in the transportation system” (YT) that will enable human access to space stations & beyond. Boeing’s Current Structure Boeing headquarters in Chicago, Illinois and focuses on aerospace defense and engineering of aircrafts, missiles, satellites, and rockets. The current CEO, Chairman and President is Dennis Muilenburg, he took over in July, of 2015. He is focusing on the future of the organization, recently noting that Boeing is producing a new prototype for our new air taxi, which will revolutionize travel and help relieve congested roadways (Chang, 2018). This new Boeing product will be ready for takeoff next year. Boeing is in the business that manufactures, designs, and sells rockets, airplanes, satellites, missiles and rotorcrafts all over the world. The company currently offers leasing and support services for their products. They are also being traded on the NYSE, the current stock price for $312.32 per share. With more than $3 billion invested annually in research and development, Boeing drives innovation that will transform aerospace and defense as we know it. The company is still leading the production, engineering, and manufacturing. Boeing vows that there is more innovation underway today at Boeing than at any time in our 101-year history (Boeing Corporation, 2018). The current company position is strong within the industry. Industry Description Notably, Boeing’s strategies have the best chance to succeed because its management can create a competitive advantage through scanning the internal and external environment and successful forecasting future change (Grant, 2016). The company carried out forecasting that predicts a market chance for two thousand and three thousand midrange plane through various methods. After they noticed the success of JetBlue and Southwest and other airlines in North America, Boeing concluded that no more than three hundred jets could be sold in future. Through strategic management process, the company has selected a sequential set of choices and analysis that increases its likelihood that it can choose a good strategy that generates competitive advantage. Significantly, the plan has produced growth with acquisitions and mergers to be a one leading aerospace manufacturers in the world. Boeing has made their mark in the industry with the seven series commercial plane, the biggest producer of military jets and is the largest provider of military and commercial satellites. Additionally, the company has harnessed its technology by producing financial and networking solutions that have helped it grow in its industry (Lawrence & Thornton, 2017). Boeing's mission and purpose of “connect, protect, explore and inspire the world through aerospace innovation” is embraced by all workers. It reflects on their main reason for the existing set of values and beliefs that inform routine planning and decision making. They intend to be the industry leaders with ambitious intentions to be good, develop new products before other competitors and be able to be labeled as the “enduring global industrial champion." Most importantly, the direction in the organization has established an inspiration of strength to be a leader and winner in the industry with innovation unmatched by other firms to produce goods beyond its years for the community. Furthermore, Boeing's vision statement helps the company to understand which of its capabilities and resources are likely to be sources of competitive advantage and which are less likely to be sources of such advantages (Frynas & Mellahi, 2015). Remarkably, Boeing's list of core values are precisely what is required in a leading firm, and future goals listed match the organizational culture to give superior value to partners, shareholders, customers and communities. Quality, integrity, diversity, safety, corporate citizenship, and trust and respect are at the heart of the company. Markedly, they are significant to attain the goals set for 2025 with top performance, market leadership, excellent services, growth fuelled by productivity and accelerated innovation. The firm's culture is an ever-changing procedure supported and guided by leadership to produce outstanding merchandises along with research and development of new goods to inspire innovation in a worldwide industry. Boeing continues to review the market segment and has determined the Asia-Pacific region will be the next expansion of global traffic with a forty-eight percent increase in travel which can lead to a demand for various orders of airliners from Boeing (Goffin & Mitchell, 2016). The company claims to have re-engineered the 737MAX with a fourteen percent fuel efficiency advantage over other competing aircrafts such as Airbus 320 which means lower ticket prices. Boeing company has revived the art in their research and development with contemporary ideas to improve comfort and relieve stress on passengers traveling for long distances. Developing new materials that are resistant to excessive loads on the aircraft allows the cabin pressure to be lower than most airliners. SWOT Analysis The following diagram is a SWOT analysis regarding Boeing’s decision to make space travel possible for commercial function: Strengths Weaknesses • Boeing has a highly skilled workforce that is no stranger to aerospace technologies and design • Boeing has already been to space, being the largest satellite manufacturer • The CST-100 Starliner has entered preflight testing (Boeing, 2018) • Strong financial performance allows for investor attraction and resource spending opportunities (Barakaat Consulting, 2018) • Weak operational performance in space segment (Barakaat Consulting, 2018) • Boeing has shown that they have significantly surpassed time and budget constraints • Suppliers have bargaining power over raw materials and components (Bhasin, 2017) Opportunities Threats • Commercial space travel is an untapped market • Leveraging the company’s expertise and reputation to partner with various companies in development • Production capacity in higher-priority markets may threaten space programs • Government regulations, such as FAA laws, are yet to be determined • The labor union workforce may unexpectedly declare a work stoppage (Bhasin, 2017) • Competition to be the first in space is consistently applying pressure to development programs Strategic Impact In order to bringing space travel to the commercial forefront, Boeing must consider this SWOT analysis when devising their strategy, as leveraging strengths, mitigating weaknesses, and navigating opportunities and threats is a keystone to success of this program. When leveraging strengths, Boeing has already begun preflight testing on the CST-100 Starliner, a human-rated spacecraft that is capable of transporting up to seven passengers into low-Earth orbit (Boeing, 2018). The data collected from this program will help serve as a solid foundation towards scaling spacecraft to accommodate more passengers and/or cargo. The workforce behind this program should find an easy transition into developing larger-scale vessels, and will do so with their “lessons learned” from the CST-100. Investors who are looking at the future of commercial long-distance travel should note this as a strength of the company and, combined with Boeing’s reputation for innovation and quality, will see Boeing as a long-term asset. Mitigating weaknesses begins with operation performance. Boeing has realized a decrease in revenue each year since 2015 (Macrotrends LLC, 2018). According to Boeing’s 2017 annual report, the company has received $4.2 billion funding from NASA (Boeing, 2018, p.123). This alone helps offset the $1.2 billion difference in revenue from the previous year (p.1). Regarding supplier bargaining power, Boeing has two options. Increase their resource designation towards negotiating better contracts or create standardized components that allow for multiple suppliers to provide products. When thinking about external forces, opportunities should be considered and strengths should be employed to carry out the strategy. Low-Earth orbit for commercial travel is an untapped market, not dissimilar to the ride-sharing services erupting in today’s economy. Uber uses a business model that is consumer-centric. They provide an easy-to-use app with transparency to fees, and can likely get you to your destination for less money than a taxi or a train ticket. Adapting this business model to commercial space travel, Boeing must utilize their innovation to bring value to the customer. The main objective of space travel is to get the customer to long-distance destinations faster than the current options, plane or ship. The company must be cognizant of the way this program will interact with the consumer. The experience should be no more complicated than their current options. This value will allow for Boeing to provide acceptable fares, even though they are likely to be more expensive than the alternatives. Another opportunity, partnership, will help Boeing navigate some of the threats posed to them throughout the development of the program. The company should work closely with the FAA when formulating regulations and determine the best practices for this new method of travel. By doing so, Boeing will be able to adapt quickly and deliver a compliant product as fast as possible. Other threats, such as union strikes, must be addressed before it happens. This means meeting with union representatives and negotiating contracts that are deemed fair and appropriate for both parties. Strategy Boeing’s goal for making low-Earth orbit travel commercially available is quite clearly a blue ocean strategy. In short, blue ocean strategies are those that position a company in a competent market to which it separates the product/service from the norm. Doing so does not necessarily require unique products or technology innovations nor does it require a significant increase in cost; rather, it requires existing technologies and products/services to be presented in a unique format (Kim & Mauborgne, 2004). In creating the business model that defines the strategy, we will have the following four elements: customer value proposition, profit formula, key resources and key processes (Johnson, Christensen, & Kakermann, 2008). As each element is defined it is important to recognize that Boeing is working within their core competencies. By doing this it lends them the advantage that distinguishes Boeing from competition. The proposed market is not vastly different than any of Boeing’s individual programs. Therefore, technologies from their commercial segment and space segment can be combined to bring a unique value to the customer. This is an added value for consumers, and all part of the strategy. CVP is the first step in creating a strategy. It identifies a way to help customers get an important job done (Johnson et. al., p. 106). In Boeing’s case, low-Earth orbit will allow customers to travel to destinations faster. This also allows Boeing to develop more efficient vehicles, as with low-Earth orbit, you are not using engine thrust to keep your vessel in the air. Drag is negligible and weather conditions are not apparent (Allain, 2015). This result leads to better margins for the company and/or the savings can be passed on to the customer in the form of lower fares. Another opportunity provided by this program is the potential to increase the number of direct flights to various destinations, creating additional value for the customer. Profit formula is the defining step in creating value for the company. Product price and volume compose the revenue model. Cost structure will require a deeper investigation, as it consists of direct costs, indirect costs and economies of scale. The margin model considers volume and the cost model defined previously. This results in the definition of contributions that meet the desired profit. Resource velocity defines the turnover rate for assets and inventory. For Boeing, volumes will likely be lower than that of their current airline demand. They must perform the following: Start by setting the price required to deliver the CVP and then work backwards from there to determine what the variable costs and gross margins must be. This then determines what the scale and resource velocity needs to be to achieve the desired profits. (Johnson et. al., p.108) Key resources are the composition of people, technologies, suppliers, competencies, etc. that create an advantage for a company. Boeing has a well-established network of suppliers and resources that have already made vessels for space travel. The necessary components for low-Earth orbit are already established within the company. The key, now, is to bring everything together to begin this new program. Resources will need to be pulled from the commercial airline segment and from the space segment; however, technologies may be recognized in other segments, such as defense, that can be applied to the program. Having this flexibility will allow Boeing to navigate into their blue ocean. Within the key resources at Boeing lies key processes. In a similar fashion, Boeing has established processes, standards, budgeting techniques, sales, etc. that have led them to success in different markets. It is important that Boeing identifies these techniques such that they can be applied to the low-Earth orbit program effectively. Furthermore, these processes should remain flexible and should be reassessed for changes frequently. This is particularly important early in the program, as flexibility allows for optimization. Accomplishing Goals to Add Value Fortunately Boeing plans for success so meeting goals to add value to the company is key. By setting goals that are specific, they can be measured and closely monitored. Checking on goals gives Boeing the opportunity to know the time line and expected outcome. There is absolutely zero chance of achieving your goals without planning. Goal achievement requires ample planning so that you know what direction you’re traveling in. But this doesn’t mean everyone needs to know every single step. Boeing creates discipline so workers have a clear expectations, which in turn leads to achieving goals. By employees taking pride in the work they are doing it keeps them motivated and empowered. Lessening distractions and effectively managing time is a piece of the puzzle that helps accomplish goals. By Boeing staying on track consumers get the added value of a company going above and beyond. Taking pride in the amazing work Boeing is doing for aerospace engineering is keeping them on top of the industry. Benefits of the Strategy The strategy will offer a plenty of benefits to the company. As a business entity, Boeing should consider strategies that will have long-term benefits even if the short-term is not promising. The focus of every company is to secure its future by adopting flexible strategies that can help navigate the ever-changing business environment. The strategy will have the following benefits to the company; firstly, it will easily integrate into the existing Boeing blue ocean strategy hence cut cost. Entering a new market requires a strategic approach to mitigate potential risks (Agnihotri, 2016). Markets are flooded with numerous risks that can portend catastrophe to the business. One of the fundamental components of business success is understanding customer wholesomely. Implementing the strategy will be less costly as it the company can use the existing resources to integrate the new strategy. As a result, Boeing is likely to incur minimal costs while entering the new market. Secondly, the strategy comes with strategic approaches that will give the company a complete and comprehensive understanding of the market (Aithal, 2016). The suggested strategy comes with an implementation approach consisting of CPV, profit formula, key processes, and key resources, which will ensure that the company understands the market segment, and the available resources needed to achieve the set objectives. Taking a procedural approach to the business opportunities is critical in understanding the market niche. The strategy will help the company make informed decisions by available the necessary market information for forecasting. Possible Risks of Implementing the Strategy Whereas there are various risks that come with new strategies, the program poses the following risks to the company. First, the strategy is likely to lead to overutilization of the existing resources. It is important to note that companies acquire resources based on the capacity and need. Technological resources also have limits of utilization hence can be over-utilized if subjected to unplanned usage. Most of the technological resources are often programmed to meet certain goals as well as accommodate a given capacity. Therefore, the new program might lead to unprecedented resource usage. Consequently, it may affect the efficiency of technological resources. Secondly, the strategy might push the company into unplanned expenditure. Experimenting a new strategy comes with various risks. One of them is the financial resources required to implement the idea. Companies often have plans and budgets that are usually fixed or aimed at achieving certain goals. Therefore, a new strategy might interfere with the initial expenditure plans thereby making it necessary to pump additional resources to achieve the new goals. It is unprofitable for the company in short-term as it might derail the implementation of existing programs. Competitive Position within the Industry Boeing has everything to gain with this strategy, as the landscape and the related industries themselves are still only in their infancy. Boeing has the opportunity to shape and define multiple industries as they arise, along with the obvious benefit of being one of the first movers and pioneers of the technologies. Whether its government service contracts to deliver crews to the International Space Station, low-Earth orbit commercial flights as an evolution of the current commercial flight industry, space flight tourism, or eventual missions to support bases on the moon or mars, the profit potential for a successful execution of the strategy is incalculable. Being successful in any or all of these endeavors would position Boeing as a top competitor in a likely very narrow field of companies that are able to execute on such a massive and technologically challenging goal. The cornerstone of this whole strategy is Boeing’s partnership with NASA to develop and build the first rocket and space vehicle that would launch from US soil to supply the ISS since the space shuttle program was halted in 2011 (Siceloff, 2011). This is a totally new approach to the national space program, and is the first time a commercial company will be both designing and supplying the finished equipment to NASA. This is intended to streamline the program, accelerate the timeline, and reduce costs as compared to a total in-house effort by NASA (Mosher, 2018). The success or failure of this experiment in ‘outsourcing’ the work of developing new launch technology will likely set the tone for the future of NASA. With this program, NASA is “underwriting the development of commercial capabilities with the hope that...commercial companies [can then] go find other sustaining businesses that can keep them going so that they become entities in and of themselves” (CNBC, 2018). Elon Musk’s SpaceX was also chosen to receive a large portion of the aforementioned underwriting for this program, and has already demonstrated their plans for how to sustain themselves after the technology has become more mainstream - private spaceflight. SpaceX has already signed up their first passenger for a trip around the moon, pending the successful completion of the NASA program (Masunaga, 2018). Boeing’s contract with NASA also allows for Boeing to sell seats on their launches to the ISS to private astronauts, and Boeing has teamed up with Space Adventures, the only company to date to have sent seven private citizens to space to help facilitate this (Borgobello, 2010). The future possibilities that may arise from this burgeoning private space industry are nearly impossible to speculate on. It goes without saying that the first company or companies that can demonstrate a feasible method to help both world governments and private tourist travel into space reliably stand to benefit enormously. Like every other, new strategies come with a demand for additional resources to facilitate the implementation. Additionally, financial and human resources might be necessary to increase the capacity to adopt a strategy. Technologies have complexities might need additional expertise to integrate the new program into the existing technological resources (Kim & Mauborgne, 2014). Moreover, introducing a new idea is synonymous with introducing a change. There is a need to make other stakeholders understand the essence of undertaking the program and its potential benefits. Therefore, resources are necessary to help manage risks during implementation (Lam, 2014). The company might need additional resources to help introduce the change. Moreover, educating the stakeholders about the new strategy need both human, technological, and financial resources to achieve. Therefore, Boeing must avail resources for training of stakeholders to enable them to understand the viability of the program. The company has does not have flexible operational financial to help fit the program without additional costs. The company will need to invest in creating awareness of the customers on the new program to help them understand its significance to their needs. As a result, financial resources will be necessary to cater for the activity. Question; List action plan steps the company can take to begin executing your strategy, being sure that all steps are concrete, measurable, and attainable .                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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