Essay about Business Strategy of Boeing
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…
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