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Boeing Commercial Airplanes Group: Decision 2001 I. Current Situation

Boeing Commercial Airplanes Group: Decision 2001 I. Current Situation
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  Boeing Commercial Airplanes Group: Decision 2001 I. Current Situation  A. Financial Performance   During the past five years, revenues continued to increase, but organizational difficulties caused erratic profitability and due to the engineer's strike, it had come downhill in 2000. B. Strategic Posture 1. Mission-Vision   For people to work together as a global enterprise for aerospace leadership. 2. Objectives   The Company wants to dominate the world's aircraft market as it once used to. 3. Strategies  Boeing want to run a healthy core business by leveraging strengths through new products and services and by means of opening up new frontiers. II. Strategic Managers  A. Board   The board is comprised of twelve members. All of them had only been a member of the board for the past two decade, most of them from years 2000 up to date. The members come from inside and outside the organization. B. Top Management  When the Corporation merges or buys out other companies they often keep on the key players from the new acquisition. The Chief Executive Officer and Chairman of the Board of Boeing Commercial  Airplanes is Philip Condit. III. External Environment  A. Societal environment is outstanding. Commercial airplanes have made international travel so economical that it became a common event for both pleasure and business. B. Task Environment is very competitive. Airbus Industries had been its main competitor even though Airbus has only entered the industry late into the century.   Authorities in this industry is very strict with what manufactured airplanes they approve of which is understandable given the high risk entailed with the airplanes especially the commercial ones. Even with the mergers and acquisitions done by the company in airplane industry, there is a strict steps that need to be done before pushing through it and to be approved by it. With the flu bug entering the scene in Asia, this has made some abrupt changes whereby most airlines has delayed or backlogged from their orders. External Factor Analysis Summary External Factors Weight Rating Weighted Score Comments Opportunities International Traveling 0.25 4.50 1.13 Economical Customized products 0.15 4.00 0.60 Expert in customizing Wide Range of Products 0.10 3.00 0.30 Varied products and services Threats  Asian Flu bug 0.20 4.00 0.80 Brought about drawbacks Strict Regulations 0.20 4.50 0.90 Follows policies Tough Competition 0.10 4.00 0.40 Well-positioned Total Score 1.00 4.13 C. Summary of External Factors  At the present time there are three external factors that are critical. They include the high demand for faster and more convenient ways of traveling, the strict policies and rules implemented by aviation and aircraft authorities and the intense competition in the industry. IV. Internal Environment  A. Corporate Structure   Boeing is composed of three strategic business segments, Boeing Commercial Aircraft, Boeing Military Aircraft and Missile Systems and Boeing Space and Communications and other units. B. Corporate Culture   Stakeholders of the company all share the same goal, that is, to have people working together to provide its customers quality  products by having a diverse and involved team of employees and executive creating the products of the company. Their culture is an engineering driven company. C. Corporate Resources 1. Marketing - The marketing strategies are consistent with the company's objectives of bringing in new customers and bringing back repeat customers. 2. Finance - Boeing's liquid ratios are not strong. A good "rule of thumb" is for the current ratio to be 2 and the acid test should be 1. In Boeing's case, the year 2000 current ratio is 1.151, and hasn't been close to 2 in at least the past three years. This means they can cover their current liabilities with their current assets only at 1.151 times. 3. Research and Development   Boeing is constantly trying to make their product much better and safer for their customers. They do this by changing or adding up features that will satisfy the customers need and their passengers as well. 4. Operations and Logistics   The Company not only manufactures airplanes but also provides services such as airplane modification and engineering support. This helps out increase its revenue. 5. Human Resources - Boeing employs more than 150,000 people across the United States and in 70 countries. This represents one of the most diverse, talented and innovative workforces anywhere. On 2000, the union organized a strike lead by its engineers which caused losses for the company. 6. Information Systems   Through their efficient technology, most of their planes have a low operating cost which increases the profitability of the company. This technology gives a lot of boost with the research and development done by the company in providing a much better version of their product or even a new plane. Internal Factor Analysis Summary Internal Factors Weight Rating Weighted Score Comments Strength  Efficient technology 0.25 4.00 1.00 Advanced technology Employee relations 0.1 4.50 0.45 Skilled and talented workers Profitability 0.1 3.00 0.30 High Revenue Weaknesses Erratic Profitability 0.15 3.50 0.53 Due to delays and cancellation High employee turnover 0.15 4.50 0.68 Due to strikes Low production Output 0.25 5.00 1.25 Takes time Total Score 1.00 2.95 D. Summary of Internal Factors  As of today, having an advanced and very efficient technology will surely help with the manufacturing, development and production of airplanes as well as effectively lowering its cost. This is with the help of its employees that are talented and skilled. V. Analysis of Strategic Factors Strategic Factor Analysis Summary Weighted Strategic Factors Weight Rating Score S I L Comments S1 Efficient Technology 0.15 5.00 0.75 x Advanced S2 Employee Relations 0.10 4.00 0.40 x Skilled and Talented workers W1 Erratic Profitability 0.10 4.50 0.45 x Due to delays and cancellation W2 Production Output 0.10 4.00 0.40 x Takes time O1 International Traveling 0.20 5.00 1.00 x Economical O2 Customized Product 0.10 4.00 0.40 x Expert in customizing T1 Strict Regulations 0.15 4.50 0.68 x Follows Policies T2 Asian Flu Bug 0.10 3.50 0.35 x Brought about Drawbacks Total Score 1.00 4.43 Ever since, the ways to fly through planes and such were discovered may men  had tried to experiment and produce airplanes which is now used for travel purposes or war purposes. Planes are much more likened as a mode of traveling since it is much faster than that of a ship. Producing or rather manufacturing takes out a lot of time, with the fact that it needs to be carefully done from its planning and design phase to its assembling phase. This causes a lot of delays and cancellation which in turn causes losses. Having a thoroughly functioning and safe product, there is a great dependence to its employees to make sure that their products are done efficiently and effectively. With this, the company wants to make its employee to feel at hoe in the company and for them to stay at the company at a long period of time. VI. Recommendations and Implementation Boeing could go ahead with plans to produce a new B-747X. In as much as there is uncertainty with this decision, every business decision has its risk, but it does mostly pay-off. As it is, the market does seem to be favorable.  Another thing that the company could do is to make sure that their products comply with the rules and regulation given by the authorities, right from the beginning of production or even at the design phase itself so as to ensure there will be no errors made to avoid backlogging and delays. It is understandable that the company is engineer driven given the fact that they do rely on this engineers with their designs for the airplane but it would be better if they do make sure that it is not only their engineers is highly skilled and knowledgeable in this type of industry but everyone else because it is not just their engineers that make the product work but everyone else too. They should have a proper plan and budget as to how many they are going to produce so as to estimate how many orders they could provide. This is to ensure that they would remove or at least lessen the delays or cancellation done by their customers.
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