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Founded in 1916 by William E. Boeing in Seattle, Washington.
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In 1997, Boeing merged with McDonnell Douglas.
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The world's largest aerospace and Defense Company.
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Boeing has customers in more than 90 countries around the world.
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Boeing employs more than 158,000 people across the United States and in 70 countries.

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Boeing operates three divisions:
• commercial airplanes
• Integrated Defense Systems (IDS)
• Boeing Capital Corporation (BCC)
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Commercial
Airplanes
Integrated
Defense
Systems
Boeing Capital
Corporation

Factor Trend Evaluation
P olitical
E conomic
WTO trade restrictions in the aircraft industry.
WTO-laws and regulations prevent
Boeing from government assistance
Exchange rates favoring US exports.
Economic Recession
Threat
Threat
Opportunity
Threat
Impact
(1=low
5=High)
Rank in term of importance
4
4
2
3
3 3

Factor Trend Evaluation
S ocial Anti-US feelings due to the foreign policies will affect business in countries of the
Middle East.
T echnological Boeing has developed sophisticated technologies that provides distinct safety advantages.
Use of new technologies in the form of robotics that help build aircrafts faster
Lighter material in aircrafts
Threat
Opportunity
Opportunity
Opportunity
Impact
(1=low
5=High)
2
Rank in term of importanc e
4
5
1
5
5

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◦ Airlines: Commercial aircrafts
◦ US Governments: Military aircrafts, global services and support, and network and space systems.
◦ Global based buyers: Customers in more than 90 countries.
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◦ Global based suppliers: Contracts with 22,000 suppliers and partners globally.
◦ Engine manufacturers represent the single most significant group of suppliers:
 General Electric, Pratt & Whitney (US), Rolls-Royce (UK), CFM International

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◦ Airbus: European aerospace company based in Blagnac, France.
◦ Conglomerate funded by various countries throughout Europe
◦ Airbus produces half of the world’s jet airlines and shares the market with Boeing.
◦ Airline wars: Intense competition between Boeing and Airbus.
◦ Producer of the AB-380.

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◦ Emerging competitor
◦ Company founded in 1969 in Brazil
◦ 11,000 Employees
◦ Historically produces Aircrafts: seats between 30-50 passengers
◦ Currently developing new jetliner family in the 70-110 seat capacity

Barriers to Entry
Supplier Power
Buyer Power
Rivalry
Threat of Substitutes

•New airplanes and engines require extremely high investments accompanied with great risk and the inability to get a positive return on that investment for many years.
•Aerospace industry requires large amounts of continuous investment in research and development due to the complexity of the industry.

•Firms in the aerospace industry have several supplier which to choose from.
•Boeing have round 22,000 suppliers
Globally.

•Airlines are cutting their investments which forces a deadly competition in the aircraft industry.
•Due to the competition,
Buyers(Airlines) force advantageous reductions in the price of Aircrafts.
•Aerospace firms compete for large orders from airlines to try to recover their high costs

• No threat of substitute products due to the uniqueness of speed and the ability of aircrafts to travel over water.
• Exception: for short distances over land, aircrafts may compete against automobiles and trains.

• Two firms competing in the
Aircraft industry, Boeing and
Airbus.
• The two firms are equally balanced and have little differentiation in their products.

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• Two firms controlling the Aerospace industry
• Similarity of products produced by the two firms
• Firms adopting the same strategies
• Regulations and policies enforced by the WTO.
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• Run Healthy Core businesses
• Leverage strengths into new products and services
• Open new Frontiers

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• Technological opportunities are most opportunities to Boeing.
• Political factors represent the major threats to Boeing in the form of the WTO regulations and laws
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 Low:
• Supplier Power
• Threat of Substitutes

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• Intensity of Rivalry
• Barriers to Entry
• Buyers Power
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World Aircraft manufacturing industry
Military & Space
Passenger
Aircraft
Large Civil
Aircraft( LCA)
Commercial Aircraft
Cargo Aircraft
Small to
Medium- sized
Aircrafts

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Leader in the commercial jet manufacturing for decades
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Merged with McDonnell Douglas in 1996
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Second largest defense contractor in 2000
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Leader in the satellite making (space industry) business as of 2001

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Established in December of 1970
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Boeing’s only competitor in commercial jet manufacturing
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Controlled 55% of the large passenger aircraft market in 2001

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World’s largest maker of small planes in Canada
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Make jets that seat between 25-90 passengers
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Control 36% of the global market for business and regional jets

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Company founded in 1969 in Brazil
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11,000 employees
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Historically their planes seat between 30-50 passengers
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Currently developing new jetliner family in the 70-110 seat category

Entity
Products
Revenue
Gross Profit
Employees
Global
Presence
Market Rank
Boeing
Public
Commercial
Jets
64.3B
12.5B
160,500
70 countries
1
Airbus
EADS
Commercial
Jets
63.7B
1.7B
52,500
150
Countries
2
Embraer
Public
Bombardier
Public
Commercial
Jets
5.4B
330M
17,149
Regional jets
9.4B
310M
28,900
92 countries 35 countries
3 4

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Boeing
◦ Supersonic Jet
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Airbus
◦ Super-Jumbo Jet
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Bombardier
◦ Focus on Smaller Jets
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Embraer
◦ Focusing on the 70-110 seat market

By Product
Differentiation
• Aircraft Seat capacity
• Aircraft Speed
By
Outsourcing
• Subcontracting production of aircraft components or assemblies to gain competitive advantage
By the use of technology
• The use of advanced technology to seek performance advantages.

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Products Differentiation
Boeing adopts a differentiation strategy , Faster aircrafts in the form of the supersonic
787 Dreamliner series that compete against Airbus bigger airplane the A-380 jumbo
Aircraft.
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By Outsourcing
70% of the 787 Dreamliner was built outside the USA, that enables Boeing to lower its production costs in a very expensive industry.
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By Technology
The 787 will be the first airliner to use composites for most of its airframe construction, that will allow for a lighter aircraft and lower fuel consumption( 20% lower)

By Product
By Outsourcing
By the use of technology
Faster Airplanes
787- DreamLiner
Bigger Airplanes
A-380
Assembly plant in
Japan
Assembly plant in
China
Use of composites in
Airframes
Engine noise reductions

 Strong Global Network( Buyers, Suppliers)
 Broad Product line that covers most market niches( commercial, defense and military, ammunitions, space and security)
 R&D

 Global Aerospace and Defense Market has reached a value of USD 674.6 Billion in
2008 and reports forecast that this figure would go up to USD 910 billion in 2013 based on a year on year increase of 6.17%.
 Within the aerospace and defense market the defense market accounts for almost 70% of the market value.

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Globalization of Aerospace manufacturing
It is estimated that the amount of manufacturing outsourcing in the aerospace industry is close to about 80% of the airplane.
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Technical Expertise
Airplanes have got increasingly complex and it is not expected that a single company would have the technical expertise to meet the myriad requirements.
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Outsourcing
Manufacturers are outsourcing the sub system value chain since they want to shorten development time by increased focus on higher value added portion .

Development of LCAs is split into two markets
Fragmentation Consolidation
Large number of smaller high speed aircraft(100-
290 seats)
Boeing
787-Dreamliner
Super Sonic jet
Large and high capacity aircraft (300-600 seats)
Airbus
A-380 Super
Jumbo Jet

Market
Short Distance-Medium capacity Many
Short Distance-High Capacity
Long Distance-High Capacity
Long Distance-Low Capacity
Buyers Evaluation
None
Some
Niche
Boeing’s commercial airplane buyers require planes that are more effective at flying short distances with a low capacity(
737 family)
With high capacity airplanes the travel time is increased.
Some of the buyers however Boeing is faced by a crucial competition from Airbus products in this segment the clients in this segment include governments or governmental agencies, private individuals, organizations, companies offering business flights,
Boeing business jet operators

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Started by Randy Baseler, Vice President, Marketing Commercial Airplanes in
January 2005.
Way to expand the conversation of commercial aviation to the Web.
In its first two years, Randy’s Journal, as the blog was named, saw more than half million individual.
Randy’s blog is another communication outlet for a large public company, he also includes transparent reflections on quarterly earnings, orders and how the impact of results financial results on production and development of ongoing projects.
From Randy’s Blog:
“We’ve just been through another tough quarter, not only for Boeing but for our industry. So, understandably our results are somewhat parallel to what’s happening in the global economy and its deep effects on the commercial airplane market. Boeing’s first-quarter earnings dropped 50%, to $610 million.”

Four mains players in the aerospace industry, with Boeing and airbus controlling the market of big size commercial aircrafts
Companies in the industry focus on differentiation due to the intensity of rivalry o Boeing focus: Supersonic jets- 787 Dreamliner o Airbus Focus: Jumbo Jets- A380 series
Companied use different strategies to compete o By Product o By Outsourcing o By the use of technology

Key trends in the aerospace industry o Globalization of aerospace manufacturers o Outsourcing o Technical expertise
Key Trends of aircraft development: o Consolidation o Fragmentation
Boeing’s Positioning o Long distance-Medium capacity: Many o Short distance-High capacity: None o Long distance-High capacity: some o Long distance-Low capacity : Niche
Boeing’s social media
B2B social media to interact with its stakeholders( employees, buyers…etc) 

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Design, assemble and support commercial jetliners
◦ Boeing 7-series family of airplanes lead the industry
◦ Commercial Aviation Services (CAS) offers broad range of services to passenger and freight carriers
Design, assemble and support defense systems
◦ World’s largest designer and manufacturer of military transports, tankers, fighters and helicopters
◦ Support Systems provides services to government customers worldwide
Design and assemble satellites and launch vehicles
◦ World’s largest provider of commercial and military satellites; largest NASA contractor
Integrate large-scale systems; develop networking technology and network-centric solutions
Provide financing solutions focused on customer requirements
Develop advanced systems and technology to meet future customer needs

Revenues
2010 2009
64,30
6
68,281
Net earnings 3,307 1,312
Operating margins
U.S dollars in millions
7.7% 3.1%
2008
60,909
2,672
6.5%
2006-2007: Increase in Operating margin by 3.9%
2007-2008: Decrease in Operating margin by (2.3%)
2008-2009: Decrease in Operating margin by (3.4%)
2009-2010: Increase in Operating margin by 4.6%
* Peek of Revenue & Operating margin in 2007
2007 2006
66,387 61,530
4,074
8.8%
2,215
4.9%

Revenues By segment
2010
Revenues
Commercial Airplanes $31,834
Defense, Space and
Security
Capital Corporation
$31,943
$639
U.S dollars in millions
2010 Revenues
Commercial
Airplanes
2009 Revenues
$34,051
$33,661
$660
Changes
(7%)
(5%)
(3%)
2009 Revenues
Defense,Space and Security
Boeing Capital
Corporation

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Cash
Accounts Receivables
Inventories
Goodwill
Property, Plant & Equipment
Other Acquired Intangibles
Investments
Total Assets account for: $68,565 Million Dollars

Strengths
 Strong Global Network( Buyers, Suppliers)
 Broad Product line that covers most market niches( commercial, defense and military, ammunitions, space and security).
 Diversified business offering
 Innovation and Technical Expertise
 Strong reputation of quality and industry leadership
 International customer base
Weaknesses
 Labor Problems( Cyclical employment)
 Dependence on US government in the form of incompatible subsidies
 Development Costs for new products: $8-10 Billion
 Weak turnover ratios
Opportunities
 Growing demand for commercial
Airplanes
 Strong order backlog
 Rising defense spending in the US
 New technologies to build lighter, longer range aircraft
Threats
Aggressive Airbus Price Discount
Practices.
Economic recession

MARKE
T
GROWT
H RATE
HIGH
LOW
Stars Question
Marks
Cash Cows
HIGH
Dogs
LOW
RELATIVE MARKET SHARE
HIGH MARKET
SHARE:
Boeing controls the aerospace market for commercial aircrafts along with Airbus
High MARKET
GROWTH:
Growing demand for commercial
Airplanes.

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Run healthy core businesses
Leverage strengths into new products and services
Open new frontiers
People working together as a global enterprise for aerospace leadership

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: o Differentiation based-competitive advantage
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o Understanding customers needs and preferences o Commitment to customers o Knowledge of company’s capabilities o Innovation

Competitive Advantage low Cost High Cost
Stars
Overall
Cost
Leadershi p
Differentiation
Cost
Focus
HIGH
Differentiatio n Focus
LOW
Differentiation:
Boeing follows this strategy by developing products that offers unique attributes to customers and that are different from the competition products: the 787 Dreamliner
Broad Scope:
Broad Product line that covers most market niches( commercial, defense and military, ammunitions, space and security).

Component Comment
Innovation
Market Development
Market Penetration
Product Development
Most commercial aircraft are examples of incremental innovations . Boeing’s innovation is about taking risks, challenging assumptions and reinvestigating what customers want.
Boeing should keep maintaining or increasing its market share of current products.
Boeing should keep maintaining or increasing its market share of current products.
Boeing plans on providing the aerospace industry with lighter and fuel efficient
Aircrafts. Boeing reduced the weight and fuel consumption of its Aircrafts by 70% over the years.
Research and Development Boeing plans on expanding its Global R&D initiatives by establishing relationships with universities in the UK (Cambridge,
Cranfield and Sheffield ) to seek the best

Hybrid
Perceived
Service Low
Benefits Price
No Frills
Price
Focused
Differentiation
Boeing focuses on differentiating its products due to the competition.
Strategies
Destined for
Failure

Existing Products
Market
Penetration
New Products
Product
Development
Market Penetration:
Boeing should keep maintaining or increasing its market share of current products.
Market Development:
Boeing can achieve this by keeping its differentiation strategy to access new geographical markets
Market
Development
Diversification

Component
Manufactures
Subsystem
Manufacturers
Engine
Manufacturers
Airframe
Manufacturers
Airlines
Capacity
Demand
Control
Competition/ Market Absorption
Survival

Series 1
35%
30%
25%
20%
15%
10%
5%
0%
•New Airplane deliveries for 2009-2028
•Asia-Pacific as Boeing’s biggest market 31%
Series 1

 Boeing Business Model
 Design, assemble and support commercial jetliners
 Design, assemble and support defense systems
 Design and assemble satellites and launch vehicles
 Integrate large-scale systems; develop networking technology and network-centric solutions
 Provide financing solutions focused on customer requirements
 Develop advanced systems and technology to meet future customer needs
 Changes in distribution sales:
 Small decrease in revenues
 Boeing Generic Strategy
 Differentiation

 Boeing Grand Strategy
 Drive long-term growth and value creation
 Provide the industry's with customer-focused solutions
 Provide financial services in support of Boeing sales
 Pursue technical & functional excellence for the enterprise
 Utilize advances in technology in making products more environmentally friendly
Boeing Strategy Clock
 Differentiating
Boeing Global Markets
 Asia-Pacific 31%
 North America 27%
 Europe 25%
 Middle East 6%
 Latin America 6%
 CIS 3%
 Africa 2%