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Introduction:
Boeing is the world's largest aerospace company and leading manufacturer of commercial
jetliners and defense, space and security systems. A top U.S. exporter, the company
supports airlines and U.S. and allied government customers in more than 90 countries.
Boeing products and tailored services include commercial and military aircraft, satellites,
weapons, electronic and defense systems, launch systems, advanced information and
communication systems, and performance-based logistics and training.
Boeing has a long tradition of aerospace leadership and innovation. The company
continues to expand its product line and services to meet emerging customer needs. Its
broad range of capabilities includes creating new, more efficient members of its
commercial airplane family; integrating military platforms, defense systems and the war
fighter through network-enabled solutions; creating advanced technology solutions; and
arranging innovative customer-financing options.
With corporate offices in Chicago, Boeing employs more than 159,000 people across the
United States and in 70 countries. This represents one of the most diverse, talented and
innovative workforces anywhere. More than 123,000 employees hold college degrees --
including nearly 32,000 advanced degrees -- in virtually every business and technical field
from approximately 2,700 colleges and universities worldwide. Our enterprise also
leverages the talents of hundreds of thousands more skilled people working for Boeing
suppliers worldwide.
Boeing is organized into two business units: Boeing Commercial Airplanes and Boeing
Defense, Space & Security. Supporting these units are Boeing Capital Corporation, a
global provider of financing solutions; the Shared Services Group, which provides a broad
range of services to Boeing worldwide; and Boeing Engineering, Operations & Technology,
which helps develop, acquire, apply and protect innovative technologies and processes.
Boeing Defense, Space & Security (BDS) provides end-to-end services for large-scale
systems that enhance air-, land-, sea- and space-based platforms for global military,
government and commercial customers. In addition to designing, producing, modifying
and supporting fighters, bombers, transports, rotorcraft, aerial refuelers, missiles,
munitions and spacecraft for military, civil and commercial use, BDS is developing
enhanced capabilities through network-enabled solutions, communications and
intelligence, surveillance and reconnaissance technologies. BDS also supports the U.S.
government as a system integrator on several programs of national significance -- NASA's
space shuttle and International Space Station programs, the Missile Defense Agency's
Ground-Based Midcourse Defense program, the Army's Brigade Combat Team
Modernization program and SBInet, a critical component of the Secure Border Initiative
managed by the Department of Homeland Security .
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, 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. It also offers comprehensive travel services to Boeing
employees and manages the sale and acquisition of all leased and owned property for
Boeing. By integrating services, Shared Services Group delivers greater value, creates
"lean" processes and operations, leverages buying power and simplifies access to services
for all of Boeing.
The Vision
The Boeing Vision is: People working together as a global enterprise for aerospace
leadership. How will we get there?
Boeing is committed to a set of core values that not only define who they are, but also
serve as guideposts to help them become the company they would like to be.
Boeing is a company of amazing people working in one of the most exciting industries in
the world. When you consider their many accomplishments -- from designing and building
the earliest biplanes to creating and supporting today's supersonic aircraft and spacecraft
-- you might think they would be content with how far they’ve gone. But a company of their
size and scope doesn't succeed by resting on its laurels; they are constantly re-examining
their capabilities and processes to ensure that their company is as strong and vital as their
heritage. In fact, their culture mirrors the heritage of aviation itself, built on a foundation of
innovation, aspiration and imagination.
Wanda K. Denson- Senior Vice President, Office of Internal Governance, The Boeing
Low Company
J. Michael Luttig Executive Vice President, General Counsel, The Boeing Company
The magnitude 6.8 earthquake that struck the Seattle area in February 2001 rattled peoples' nerves—and
shook the status quo at Boeing's Renton, Wash., site. And the aftershocks are still being felt.
That earthquake gave then site leaders Carolyn Corvi and Pat Shanahan the impetus to act on an idea they'd
been kicking around for some time—a vision of a streamlined production system where product designers and
support employees work side-by-side with product builders.
"The earthquake pretty much destroyed our 10-85 building," said Corvi, now 737/757 programs vice president
and general manager for Boeing Commercial Airplanes. "We couldn't reoccupy it, so literally over a weekend we
moved 1,250 employees into new work spaces in and adjacent to the site, and had them up and running.
Afterward, we realized that if we could do that, we could certainly move everyone out into the factory and
make the most out of that space."
Commercial Airplanes' Renton site, located at the south end of Lake Washington, is the birthplace of the jet
age, where Boeing has built the 707, 727, 737 and 757 in record numbers. In recent years, Lean
manufacturing principles and a moving 737 production line have improved productivity, which in turn has cut
the need for inventory and freed up floor space throughout the cavernous Final Assembly buildings. Indeed,
Corvi said the Renton team has reduced the amount of square footage to support airplane production by more
than 40 percent.
Corvi and Shanahan decided to convert unused factory space into office space to bring the people who really
need to be near the airplanes as close as possible to the products they design, build or support, instead of
being scattered around the nearly 300-acre campus.
Thus a project dubbed "Move to the Lake" was born. The initiative not only represents a more efficient use of
assets such as land and inventory, but it creates a new way to work. "This isn't intended to be just a facilities
move," Corvi said. "Move to the Lake is an opportunity for us to do things differently. We want to change the
way we work together, to create a linkage between builders and designers, and get people to connect in ways
that will help us better communicate, operate more efficiently and become even more competitive."
The first groups made the move in January. By the end of 2004, more than 2,500 employees from engineering,
finance, program management and other groups will be relocated from remote buildings into the Final
Assembly buildings. Others will move into soon-to-be-refurbished buildings nearby.
Before employees could begin their move, a lot of work needed to be done. Boeing recruited three partners to
help: NBBJ, the architectural firm that designed Safeco Field, Seattle's heralded baseball stadium; Turner
Construction, one of the largest construction firms in the United States; and Steelcase/BarclayDean, an office
furniture firm that provides product solutions that promote employees' working-together relationships.
"We knew going in that we wanted to create something totally unique to Boeing," said Mark Garvin, program
manager for the Move to the Lake project. "We wanted to intentionally design it to be flexible, mobile,
technologically advanced and set up to foster a culture of collaboration, communication, efficiency and agility."
In 2002, Boeing and its partners conducted studies on how employees work and interact. The team then
recruited 35 engineers to participate in a 12-week Move to the Lake pilot project that required them to leave
their offices to make a temporary home in a work space in Final Assembly. The pilot team identified a number
of key issues that helped improve the design of office work spaces in a factory environment. After overcoming
some initial apprehension, the engineers found that being close to the airplanes "made it much easier for them
to get together with mechanics to discuss issues affecting quality, installation and assembly," Garvin said.
The design developed by architects at NBBJ called for office areas separated from factory space by a
translucent wall with windows, so employees in the offices can see the product at all times. Work spaces were
designed with equality and openness in mind: no hard-walled office areas for anyone, and plenty of room for
spontaneous collaboration, as the plan called for groups who need to work together to be seated near each
other.
NBBJ proposed a vibrant color palette for the building interiors, a stark contrast to the drab interior paint
dating back several decades. In fact, visitors as well as employees at Renton can identify what type of space
they're in—conference room, arrival zone, restrooms, etc.—by the color of the walls.
Another key design element intended to enhance the employee experience is something many take for
granted: windows. One of the first things Turner Construction did—with dramatic results—was install dozens of
windows along the east wall of the building.
Boeing also is taking advantage of its waterfront location to create an employee dining center with walls of
windows, which will showcase impressive views of Lake Washington, Mercer Island and the Seattle city skyline.
The Move to the Lake team also is using the latest technologies in workspace design to ensure employees have
the tools they need to accomplish their jobs. For example, the facility design incorporates areas for
collaboration, "knowledge cafés" and open meeting zones, as well as leading-edge technologies such as Voice
over Internet protocol and wireless areas. This helps create a work place that embodies the qualities desired
for people to bring to their work: flexibility, innovation, and a focus on customers and the end product—
airplanes. "The changes we're making to typical work spaces will improve everyone's ability to do his or her
job," Garvin said.
As Renton consolidates its operations, Boeing will eventually sell the older buildings it vacates. The forthcoming
end of 757 production combined with the sight of wrecking crews demolishing unoccupied buildings on the site
and have spurred speculation—inside the company and outside—about Boeing's future in Renton.
Corvi has heard the speculation but emphasizes the fact that the Move to the Lake project currently is Boeing's
largest capital improvement project in the Puget Sound region. "With more than 900 737s in backlog and
excellent sales prospects, we plan to build 737s in Renton as long as the world wants them, and we continue
improving our productivity," she said. "Move to the Lake represents a significant commitment to the Renton
site, its people and products."
• The Company is a major player in the field of Military aircraft and missiles and is
leading in the development of Integrated Defense Systems
• The Space and Communication segment or business unit which is engaged in the
development of integrated battleship, missile defense, human space flight and
exploration, launch and satellite, and homeland security is the company’s new
and fast growing venture.
• The Company through its Boeing Capital Company (BBC) offers financing
arrangement by leasing and extending loans to commercial and military
customers.
• The Company’s ability to streamline its aircraft production operation has
significantly reduced its production time and ultimately reduced its production
cost and expenses.
Boeing Weaknesses
• The Company production backlog have average about $78 Billion over the past
(5) years.
• The Company Organizational Structure is too stiff and is restrictive with respect
to function and responsibility distribution
• Based on the Company’s financial information, the Company’s high debt-to-asset
ratio and high operational expenses puts the company at a risk and susceptible
to financial collapse.
Opportunities
Commercial Aircraft There was a decreasing demand on Boeing should pursue its plan to
commercial aircraft address the increasing demand for
passenger nonstop travel between
cities. Since Air Traffic Management
(ATM) system is relatively
inexpensive, the company should
implement this to increase revenue
and be able to compete with other
aerospace players.
Boeing Capital High interest rates could possibly Boeing should factor-in a competitive
Corporation-Capital make the segment having a low rate on their capital financing to
Financing profit. engage more customers which
consequently make the segment
profitable
Analysis: As shown in the above table, there was a reduction in backlogs of production
delays by rapidly ramping-up the production process which resulted to decreasing the
number of undelivered jetcraft units.
Core Competencies are unique, in that way the retain value is expensive to imitate, and
cannot be substituted.
Repeated effort to meet the customer demands and needs (Core competencies-
Boeing.com) Boeing commits to understanding and responding to what its customers
would like in an aircraft; and designing and implementing specific needs or
demands. One of Boeing’s unique business structures is to design the product
according to customer wants, and has it waiting for them to buy. This builds a strong
competitive advantage, as it notifies the customers that Boeing will design aircrafts
according to their needs, and allows them to build stronger relationships with their
customers.
Unique contracts and agreements with both NASA, and The United States Air Force.
The strategic partnership with both of these two organizations allowed Boeing to
become the world’s largest space and Communications Company, as well as helped
it become a large leader in the aircraft manufacturing market. These two
partnerships allow for Boeing to grow into the aerospace industry, and allow Boeing
to have a wider range of products for a wider range of customers.
Competitive Advantages
Boeing has a long list of competitive advantages that it uses to gain an advantage
over its competitors, mainly Airbus. One aspect of the airline industry that is highly
regarded is market share, which Boeing has consistently had an advantage of. One
of the main reasons Boeing has most of the airline manufacturing industry market
share is due to its long history of excellence in designing aircrafts for over 90 years
Boeings strong name and brand allows for a strong hold on the airline manufacturing
industry, which has now become a duopoly between Boeing and Airbus. As one can
see, the culmination of both Boeings core competencies and operational strengths
allow it to build upon different competitive advantages in the airline industry.
One of Boeings greatest competitive advantages is its unique strategy to work more
with both its customers and suppliers, to design and build the best aircrafts on the
market.
One of Boeings largest competitive advantages include its unique research and
development departments which are able to design and implement better aircrafts
without incurring large amounts of costs. This would allow the company to produce
better aircrafts more efficiently with fewer costs than the competition, giving Boeing
a strong competitive advantage over its competition.
The company has strong international operations with customers in around 145 countries,
employees in more than 60countries and operations in 26 states.
Worldwide, Boeing and its subsidiaries employ close to 188,000 people with major
operations in Washington State; Southern California; Wichita, Kansas; and St. Louis,
Missouri. Boeing enjoys the ownership of a brand with good and far reaching
awareness on a global scale. Strong relationships with business partners
Boeing enjoys many strong alliances with many other globally powerful companies.
In defense projects Boeing works closely with Northrop Grumman in programs such
as the joint common missile program.
Boeing is also a 50-50 partner with Lockheed Martin in the United Space alliance.
Boeing also works with many other organizations such as NASA in close
relationships, which strengthen the company’s position in other markets.
Broad product line that covers most major market niches / R&D development
Boeing Company offers a wide range of product lines. For main commercial product such as
aircraft, Boeing has 717, 737, 747, 757, 767, and 777 families of jetliners and the Boeing.
The company has more than 14,000 commercial jetliners in service worldwide, which is
roughly 75% of the world fleet. Its product line is continuing to expand, creating new
versions of its family of commercial airplanes. This pioneering technology development
helps ensure Boeing stay a leader in the industry. To remain competitive, Boeing must
invest in developing the latest technologies. Thanks to its strong R& D, Boeing has been on
winning side in the head-to-head competition with Airbus so far. Total research and
development expense in 2003 was $1.7 billion. The company expects research and
development expenses to be between 3.25% and 3.75% of revenue in 2004 and between
3.5% and 4.0% in 2005 as spending increases on the 7E7 program.
Operations
Boeings operational strengths include its unique level of management, as the managers
are able to allow the company to run smoothly. Boeing is able to implement a strong
management force with its unique and strong culture (Core competencies- Boeing.com).
New aircraft to gain market share; with the impressive show of Airbus A380
recently, Boeing also plans to release its powerful weapon in the competition with Airbus.
The new version Boeing 787 which inherits the most advanced technologies and
advantages of the previous models is hoped to be a big hit to the airline industries. At the
moment, Boeing has received a number of orders for Boeing 787-
Increase demand for point to point routes; this is related to the booming market
of low-cost airline. All the low-cost airline companies use point to point routes in order to
reduce the costs substantially. Fortunately, this is suitable with the strategy of Boeing as
mentioned in the previous parts. Airbus A380 is still unsure about its future because most
of the big airline companies at the moment are not gaining profit.
Airbus- commercial jet- focus on A380 to get market share of super jumbo liners
Lockhed Martin- Integrated Defense systems
Increase pressure to reduce price of products
To provide a more secure, safer Strengthen Management Core Restructure the Organizational and
& environmental friendly (fuel- Competencies create additional department such
efficient) commercial and cargo as Public Policy & Safety Standards
airlines Innovate Security and Safety Compliance Departments
Systems and Protocols
Outsourcing
Outsourcing labour and assembly
of materials and parts
The Forc vbmjbgymh ntuitous event such as the terrorist attack which triggered “War
Enduring Freedom” definitely has strong impact on the airline industry.
Withstanding the raising temporary concerns on passenger safety by sceptics that brought
about the reduction of Commercial Airlines Production demands, the worldwide declaration
of war against terrorism paved way to a massive opportunity for Boeing to develop,
produce and market its Integrated Defense System product lines.