Essay about Business Strategy of Boeing

1126 Words Sep 20th, 2011 5 Pages
With a goal to restore its leadership role in the airline industry, Boeing launched the all-new 787 aircraft project. However, the likelihood of Boeing’s success is uncertain due to numerous threats from the market.

Boeing faces threats from risks of entry by potential competitors, fierce rivalry between the incumbent firms, and other macroenvironment factors. The company tries to use strategies such as brand loyalty, barrier to entry and customer switching cost to combat these market threats. While some strategies will help reduce external competitive forces, they may not be sufficient. To ensure its position in the market, Boeing should make sure that it: 1) Delivers all the 787 orders on time, and 2) Safeguard all of its competitive
…show more content…
Third, Airbus as Boeing’s immediate competitor is developing the A350 to combat the 787. If the launch goes smoother and quicker than the 787, Boeing may face substantial risk of losing its market share derived from the 787.

Fourth, there has be instability from within the company, as Boeing has changed many CEOs in a short period of time. This imposes great risks on management at the senior level and may in turn hurt or slow down the 787 project launch.

Rivalry between incumbents * Airbus took over as the industry leader since 2003 with higher sales of commercial planes * Airbus is developing A350 to combat the 787 * Airline market is fragmenting, causing fierce price competition * Increasing fix cost create exit barrier and price competition

Lower demand due to higher cost of complement * Customer want smaller planes that are fuel efficient – 787 provides 20% savings in fuel

Unstable senior management – challenges faced from within the company.

Absolute Cost advantage (superior operation processes, trade secrets, control over supply inputs – not anymore

Brand Loyalty – Offering superior product for customer:
- Quietest takeoff and landing with wider seats and aisles.

These features will help establish brand loyalty and achieve an absolute cost advantage, which in turns can reduce the risk of

All of which may undermine all strategic efforts set forth by the 787.

Risk of entry by potential

Related Documents