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Group 5
Boeing
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Group 5
Boeing
Table of Content
Company History (The Beginnings)
1
Boeing’s on the Rise
3
Boeing’s Today (Activities)
4
Commercial Airplanes
4
Defense, Space & Security
4
Boeing Global Services
5
Boeing Capital Corporation
5
Statues (private, public, non-profit)
6
The Company Size
8
The Profit for the Last Three Years
9
Who (employee(s), manager, CEO, CFO)?
10
Describe the behavior/act or decision?
12
The eventual costs for your organization
13
Can you justify the behavior or decision?
15
Does she/he has all the necessary information to behave or act differently?
16
Does she/he has the incentive to behave or act differently.
17
Suggestions
18
Short term solution
18
Long term solution
19
Bibliography
22
APPENDIX
23
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Boeing
1. Company History (The Beginnings)
Founder William Boeing was raised in Michigan, where his father operated a
lucrative forestry business. While he was in San Diego, California, in 1910, Boeing met a
French stunt pilot named Louis Paulhan who was performing at the International Air Meet.
When Paulhan took Boeing for an airplane ride, it marked the beginning of Boeing's
fascination with aviation.
After two years of study at Yale's Sheffield School of Science, Boeing returned to
Michigan to work for his father. He was sent first to Wisconsin and later to the state of
Washington to acquire more timber properties for the family business. In Seattle he met a
navy engineer named Conrad Westerveldt who shared his fascination with aviation. A
barnstormer named Terah Maroney gave the two men a ride over Puget Sound in his
seaplane. Later Boeing went to Los Angeles to purchase his own seaplane, thinking it
would be useful for fishing trips. The man who sold him the plane and taught him how to
fly was Glenn Martin, who later founded Martin Marietta.
While in Seattle, Boeing and Westerveldt made a hobby of building their own
seaplanes on the backwaters of Puget Sound. It became more than a hobby when a
mechanic named Herb Munter and a number of other carpenters and craftsmen became
involved. In May 1916, Boeing flew the first 'B & W' seaplane. The next month he
incorporated his company as the Pacific Aero Products Company. The company's first
customer was the government of New Zealand, which employed the plane for mail delivery
and pilot training. In 1917 the company's name was changed to Boeing Airplane Company.
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2. Boeing’s on the Rise
Boeing and his partners anticipated government interest in their company when the
United States became involved in World War I. They discovered their hunch was correct
when the company was asked to train flight instructors for the army. After the war, Boeing
sold a number of airplanes to Edward Hubbard, whose Hubbard Air Transport is regarded
as the world's first airline. The company shuttled mail between Seattle and the transpacific
mailboat that called at Victoria, British Columbia. Later, when the post office invited bids
for various airmail routes, Hubbard tried to convince Boeing to apply for the Chicago to
San Francisco contract. Boeing mentioned the idea to his wife, who thought the opportunity
looked promising. In the prospect, he and Hubbard created a new airline named the Boeing
Air Transport Company. They submitted a bid and were awarded the contract.
To meet the demands of their new business Boeing and his engineers developed an
extremely versatile and popular airplane called the Model 40. Fitted with a Pratt & Whitney
air-cooled Wasp engine, it could carry 1,000 pounds of mail and a complete flight crew,
and still have room enough for freight or passengers. The Kelly Airmail Act of 1925 opened
the way for private airmail delivery on a much wider scale. As a result, a number of airline
companies were formed with the intention of procuring the stable and lucrative airmail
contracts. One of these companies was Vernon Gorst's Pacific Air Transport, which won
various routes along the Pacific Coast. Boeing purchased this company and then ordered a
young employee named William Patterson to purchase its outstanding stock. Boeing also
purchased Varney Airlines, which began operation in 1925 and won almost every mail
contract it applied for.
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Boeing
3. Boeing’s Today (Activities)
Boeing is organized into three business units: Commercial Airplanes; Defense,
Space & Security; and Boeing Global Services, which began operations July 1, 2017.
Supporting these units are Boeing Capital Corporation, a global provider of financing
solutions.
In addition, functional organizations working across the company focuses on
engineering and program management; technology and development-program execution;
advanced design and manufacturing systems; safety, finance, quality and productivity
improvement and information technology.
1) Commercial Airplanes
Boeing has been the premier manufacturer of commercial jetliners for decades.
Today, the company manufactures the 737, 747, 767, 777 and 787 families of airplanes
and the Boeing Business Jet range. New product development efforts include the Boeing
787-10 Dreamliner, the 737 MAX, and the 777X. More than 10,000 Boeing-built
commercial jetliners are in service worldwide, which is almost half the world’s fleet. The
company also offers the most complete family of freighters, and about 90 percent of the
world’s cargo is carried onboard Boeing planes.
2) Defense, Space & Security
Defense, Space & Security (BDS) is a diversified, global organization providing
leading solutions for the design, production, modification, service and support of
commercial derivatives, military rotorcraft, satellites, human space exploration and
autonomous systems. It helps customers address a host of requirements through a broad
portfolio that includes KC-46 aerial refueling aircraft, based on the Boeing 767 commercial
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airplane; AH-64 Apache helicopter; the 702 family of satellites; CST-100 Starliner
spacecraft; and the autonomous Echo Voyager. Driven by the Boeing vision to connect,
protect, explore and inspire the world through aerospace innovation, BDS is seeking ways
to better leverage information technologies and continues to invest in the research and
development of enhanced capabilities and platforms.
3) Boeing Global Services
As the leading manufacturer for commercial and defense platforms, Boeing is
positioned to provide unparalleled aftermarket support for mixed fleets worldwide. Boeing
Global Services delivers innovative, comprehensive and cost-competitive service solutions
for commercial, defense and space customers, regardless of the equipment's original
manufacturer. With engineering, digital analytics, supply chain and training support
spanning across both the government and commercial service offerings, Boeing Global
Services’ unsurpassed, around-the-clock support keeps our customers’ commercial aircraft
operating at high efficiency, and provides mission assurance for nations around the world.
4) Boeing Capital Corporation
Boeing Capital Corporation (BCC) is a global provider of financing solutions for
Boeing customers. Working closely with Commercial Airplanes and Defense, Space &
Security, BCC ensures customers have the financing needed to buy and take delivery of
their Boeing products. With a year-end 2016 portfolio value at approximately $4.1 billion,
BCC combines Boeing's financial strength and global reach, detailed knowledge of Boeing
customers and equipment and the expertise of a seasoned group of financial professionals.
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4. Statues (private, public, non-profit)
For the fiscal year 2017, Boeing reported earnings of US$8.191 billion, with an
annual revenue of US$93.392 billion, a 1.25% decline over the previous fiscal cycle.
Boeing's shares traded at over $209 per share, and its market capitalization was valued at
over US$206.6 billion.
In 2018, achieved record $101.1 billion in revenue from record commercial airplane
deliveries, and higher defense, space and services volume. Record core operating earnings
were $10.7 billion* with core earnings per share of $16.01* driven by higher volume and
strong
operating
performance.
Increased
operating
cash
flow
to
a
record
$15.3 billion and maintained cash and marketable securities of $8.6 billion, providing
strong liquidity. Replaced the existing share repurchase program with a $20 billion
authorization and increased the quarterly dividend by 20 percent. The dividend has
increased more than 180 percent over the past five years; while nearly $28 billion has been
invested in key areas to support sustainable growth.
Delivering a record 806 commercial airplanes, including the first 787-10
Dreamliner, 737 MAX 9, 737-800 Boeing Converted Freighter and BBJ MAX. Won 893
net orders for commercial airplanes, raising the company’s total order backlog to nearly
5,900 airplanes—worth about seven years of production. Booked $36 billion of new
Defense, Space and Security orders for a backlog of $57 billion, 0 percent of which came
from international customers. Wins include future franchise opportunities with the T-X
trainer, MQ-25 unmanned aerial refueler and the MH-139 helicopter; contracts for 18
aircraft in the fourth production lot of KC-46 tankers and a second KC-46 tanker for Japan;
and selection to modernize the U.S. Navy F/A-18 Super Hornet fleet.
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Achieved Defense, Space and Security milestones, including the first flights of
Apache and Chinook helicopters for the Indian Air Force; the unveiling of the SB>1
DEFIANT helicopter for the U.S. Army; and the announcement that Boeing astronaut
Chris Ferguson will join the first crewed flight of the CST-100 Starliner.
In its first full year of operations, Boeing Global Services achieved 17 percent yearover-year growth; expanded its offerings by acquiring LX Aerospace Solutions; won a new
contract for inspections, modifications and repair work on U.S. Navy F/A-18E/F Super
Hornets and EA-18G Growlers; was awarded a contract to update the U.S. Navy’s P-8A
Poseidon training system; and won a contract to provide crew management solutions to
Shenzhen Airlines using Boeing AnalytX-powered services.
Strengthened vertical capabilities by opening Boeing Sheffield to produce actuation
components for the 737 and 767 aircraft, forming a joint venture with Safran to design
auxiliary power units, and creating an airplane seat joint venture with Adient. Accelerated
innovation with the launch of Boeing NeXt to leverage research and development expertise
in creating future mobility solutions.
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5. The Company Size
Boeing is one of the global leaders in the aircraft manufacturing industry, as well
as one of the largest companies in the world. Boeing and Airbus are the industry leaders,
and the jet manufacturing industry has been considered a fact to duopoly. Together, the
two companies share 65 percent of the world’s airliner fleet. There has been a close
competition between the two companies over the years, with each manufacturer taking the
industry lead at different times. Boeing has been slightly outperforming Airbus in the last
few years, as the American jet manufacturer reported higher revenue and a higher number
of employees than Airbus, and also has been delivering more aircraft than its main
competitor since 2011. Boeing delivered 763 aircraft in 2017, compared to 806 units
delivered by Airbus in the same year. Airbus, along with Embraer, Bombardier and
Mitsubishi Heavy Industries are Boeing's most important competitors in the aerospace
manufacturing industry.
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Number of Boeing employees from FY 2001 to FY 2018 (in 1,000s)
250
200
Boeing
188
166
157 159 153 154 159 162 157 161
172 174 168 165,5
161,4
150,5
150
140,8
153
100
50
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
In its 2018 fiscal year, the Chicago-headquartered jet manufacturer generated
around 101 billion U.S. dollars in revenue. Boeing is the largest employer in the industry,
despite the slight decline in the number of employees in recent years. Boeing employed
about 161,000 people in 2015 and around 150,500 in 2016. In comparison, the number of
Airbus Group employees stood at around 136,600 in 2014, while Brazil’s Embraer, also
one of the largest airplane makers in the world, employed just 23,000 people in 2015.
6. The Profit for the Last Three Years
Boeing annual/quarterly gross profit history and growth rate from 2006 to 2019. Gross
profit can be defined as the profit a company makes after deducting the variable costs
directly associated with making and selling its products or providing its services.
●
Boeing gross profit for the quarter ending March 31, 2019 was $4.290B, a 6.21%
decline year-over-year.
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●
Boeing
Boeing gross profit for the twelve months ending March 31, 2019 was $19.422B,
a 7.09% increase year-over-year.
●
Boeing annual gross profit for 2018 was $19.706B, a 12.84% increase from 2017.
●
Boeing annual gross profit for 2017 was $17.463B, a 20.19% increase from 2016.
●
Boeing annual gross profit for 2016 was $14.529B, a 3.12% increase from 2015.
Boeing Annual Gross Profit(Millions of US $)
$25 000
$20 000
$19 706
$17 463
$14 529
$15 000
$10 000
$5 000
$0
2018
2017
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Boeing
7. Who (employee(s), manager, CEO, CFO)?
Chairman, President and CEO
Dennis A. Muilenburg
Chairman, President and Chief Executive Officer,
The Boeing Company
Executive Council
Bertrand-Marc (Marc) Allen
Michael Arthur
Heidi B. Capozzi
Leanne Caret
Ted Colbert
Stanley A. Deal
Brett C. Gerry
Greg Hyslop
Timothy Keating
J. Michael Luttig
Kevin McAllister
Jenette E. Ramos
Diana Sands
Greg Smith
Anne Toulouse
Senior Vice President of Boeing, President of
Embraer Partnership and Group Operations
President, Boeing International
Senior Vice President, Human Resources, The
Boeing Company
Executive Vice President, The Boeing Company
President, and Chief Executive Officer, Defense,
Space & Security
Chief Information Officer, The Boeing Company
Senior Vice President, Information Technology &
Data Analytics
Executive Vice President, The Boeing Company
President and Chief Executive Officer, Boeing
Global Services
General Counsel, The Boeing Company
Chief Technology Officer, The Boeing Company
Senior Vice President, Boeing Engineering, Test &
Technology
Executive Vice President, Government Operations,
The Boeing Company
Executive Vice President, Counselor and Senior
Advisor, The Boeing Company
Executive Vice President, The Boeing Company
President and Chief Executive Officer, Commercial
Airplanes
Senior Vice President, Manufacturing, Supply Chain
& Operations, The Boeing Company
Senior Vice President, Office of Internal
Governance and Administration, The Boeing
Company
Chief Financial Officer and Executive Vice
President,
Enterprise Performance & Strategy, The Boeing
Company
Senior Vice President, Communications
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8. Boeing’s behavior/act or decision.
The recent crash incident that occurred for the Indonesian and Ethiopian airlines
Boeing 737 MAX indicate that there are problems with their management on how they
handle the production control and the sacrifice of integrity and safety.
Airbus, their rival, introduces A320neo on December, 1st 2010, a model that boasts a
15% more fuel efficiency that would compete with the current Boeing 737 plane. In the
face of the existential threat from the A320neo, Boeing’s management made up their minds
in a matter of weeks. The company would launch a fourth-generation 737, and they would
do it in record time.
Boeing could save billions of dollars in engineering costs by basing the Max off of the
737 platform. That gave the company a head start on the design and engineering work.
Boeing hoped, to allow the Max to enter service just months after the A320neo.
At the same time, the designers could not improve on the design too much. However,
the Federal Aviation Administration allows different models of airplanes with similar
design characteristics to share a common “type certificate.” So, for instance, the 737’s three
previous generations all have a common type certificate. When you get qualified on one
model, you can fly all of them.
All of this are the result of the negative practices that had been occurring the past few
years in Boeing. In order to reduce cost, one of the ways were to cut jobs to be able to
compete in price against Airbus while still ramping the productions, which pressurized the
production team, which would lead to more human errors. From the chart below we can
see that Boeing were only able to deliver 7% of all the total orders that they have received
until 2018 which shows their bottleneck production.
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Furthermore, quality control issues were ignored by the management and it was
viewed negatively to their performance if the employee tries to speak up. Numerous
employees have been fired due to this. As this practice continues it creates a custom to not
challenge the authority.
9. The eventual costs for Boeing.
This incident is a perfect example of the cross purposes at which business, technology,
and safety often find themselves. With its bottom line threatened, Boeing focused on speed
instead of rigor, cost-control instead of innovation, and efficiency instead of transparency.
The Federal Aviation Administration got caught up in Boeing’s rush to get the Max into
production, arguably failing to enforce its own safety regulations and missing a clear
opportunity to prevent these two crashes.
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In the US, the 737 MAX aircraft on average goes for three round trips a day and it
carries 145 passengers on an average flight, this will be the estimate of the cost involved.
The average airfare in the US is US$343.28. Under the assumption that this is for a round
trip, a 737 MAX aircraft will generate around US$150,000 of revenue for the airline per
day plus taxes.
If we take Southwest Airlines as an example, which has the largest 737 MAX operator
in the US that currently has 34 of these aircrafts grounded. This means that a day of all
these planes not flying might be costing the airline as much as US$5m in lost revenue. In
this case Boeing needs to take in consideration on how much they can compensate the
airlines for their losses.
When Boeing’s Dreamliner was grounded in 2013, it took more than $20 million and
three months to fix the problem. The crisis over its 737 Max jet could be even harder to
manage, given the incalculable reputational risk after two fatal crashes.
The short-term costs such as a software fix to the plane are likely to be manageable for
Boeing, but the bigger financial unknown is whether airlines lose confidence in the Max,
the company’s best-selling jet. Some 4,600 planes are on order, accounting for around $550
billion in future revenue.
Since the second crash, shares of Boeing have dropped nearly 11 percent. The longer
it takes to find a solution, the higher the price tag. Based on those costs, it is estimated that
Boeing could spend nearly $1 billion to resolve issues with the 737 Max fleet.
Airlines, which have 350 of the planes in their fleets, have also begun to demand
compensation for their losses during the grounding. It costs an estimated $1 million to lease
a replacement jet for three months.
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Boeing
Another cost would be the lawsuit that Boeing would get from the victims and the
shareholders. Also if it was found that Boeing had prior knowledge of the flaws in the
planes before the deadly crashes, the payout would be higher which currently are under
investigation It is estimated that settling the claims could cost Boeing around $1 billion.
Publicly, the passengers would not have any faith in Boeing until decades have passed.
And given that the flaws of humans and automatic systems have shown tendency to amplify
each other at the worst possible moment, trusting Boeing’s solution could well be a risk
that few airlines, passengers or safety regulators will be willing to take.
10. Can you justify the behavior or decision?
In fact if we view it financially, Boeing did everything right. Between 2011 when
the Max was first announced and 2018, Boeing’s total annual revenue grew almost 50
percent to $101 billion, its annual profits nearly doubled, and its stock price quadrupled.
Its executives personally made tens of millions of dollars in bonuses for hitting their
corporate performance targets, thanks, in large part, to the record-setting pace of 737 Max
sales. But all of this comes at a price of sacrificing some of their values.
Quality - ‘We strive for first-time quality and continuous improvement in all that we do to
meet or exceed the standards of excellence stakeholders expect of us.”
Safety - “We value human life and well-being above all else and take action accordingly.
We believe all incidents, injuries and workplace illnesses are preventable. We are
personally accountable for our own safety and collectively responsible for each other's
safety. By committing to safety first, we advance our goals for quality, cost, and schedule.”
Integrity - “We take the high road by practicing the highest ethical standards and
honoring our commitments. We take personal responsibility for our own actions.”
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Boeing
The managers were making bad decisions in previously ignoring the employees
concerned about the quality of the production methods and materials rather, the employees
are more aware of the company values instead of the managers. The executives should have
not made a rush decision in order to compete against Airbus with just an improvement of
a few percent of fuel efficiency instead they should look for a breakthrough through
research that would differentiate against Airbus.
As there are not many aircraft manufacturer, spending more time to create a more
detailed plan would not really hurt Boeing as they are a well-established company which
does not only deal with commercial aircraft. So instead of rushing the decisions in just a
few weeks, they could have eliminated the risks with a thorough research and quality
management.
Whether we are talking about personal values, or your company’s organizational
values does not matter. The fact is, even taking a small short cut on your values can lead
to catastrophe. Your values define who you are. Research shows just how important your
values play a role at work. It shows how they drive, inspire, lead your decisions, and shape
your attitudes and behavior. Shortcuts may eventually create bad habits. It may begin
innocently enough, but it can quickly become extremely detrimental to consumers, yourself,
and your company.
11. Does she/he has all the necessary information to behave or act differently?
Yes, they do, in fact, during the test flights, there were irregularities found with the
aerodynamics of the aircraft due to heavier engines, a software was implemented to
automatically help with the changes in the plane structure.
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Boeing
The existence of the Maneuvering Characteristics Augmentation System (MCAS)
software were disclosed in order to lower the training period of the pilots and also to reduce
the cost of certification from the Aviation Administration.
The executives could have prevented this incident from happening had they paid more
attention to the concerns of the test pilots, furthermore, with all these signs, they could have
delayed the release of the 737 MAX in order to check for any defects or faults in the aircraft.
Lastly, Boeing could have included the manual for the MCAS in order for the pilots to
understand and prepared during emergency when the software malfunction. Boeing
sacrificed their values of safety just to help them release the 737 MAX to meet the schedule.
12. Does she/he has the incentive to behave or act differently.
We believe that Executives has sufficient motivation or performance to take different
actions. First of all, after Boeing had two serious air crashes, they realized their problems
and did not propose effective solutions. The decision of the Executives has an unshrinkable
responsibility in the handling of events. Second, Executives has obvious movements after
things happen. For example, on social media, openly hope that the US government supports
its own business, do not stop 737 max. Although it was counterproductive, Trump stopped
the plane for the first time, but the Executives was the first time for the enterprise platform,
which is still worth encouraging. Third, the bigger challenge Boeing now faces is how to
handle future orders. So, at this time Executives decision-making and negotiation
capabilities are particularly important. If delivery is delayed due to the need to redesign the
aircraft, the manufacturer may have to offer a discount to the order carrier. There is also a
broader risk that if a passenger reacts to Max, the manufacturer may lose some corporate
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customers in the long run. This shift will provide an advantage for its European competitor
Airbus, which produces a similar energy-saving aircraft, the A320neo. This is undoubtedly
a huge pressure for CEO. So, he has sufficient motivation to take different actions.
13. Suggestions
1) Short term solution
a) Prove that the aircraft is safe
More important to Boeing is to maintain customer confidence, not only on the plane,
but also in communications. If it is determined that the new system has failed, it will not
be the first time the company is asked to explain the defects of the new aircraft. Boeing
should not underestimate the potential reputational impact. If the investigators conclude
that 189 deaths are due to a malfunction of the Boeing equipment and the pilot is not
adequately trained to respond effectively, its image in the pilot, airline and public will be
affected. Suspicion of Boeing technology and communications will lead to doubts about
its innovation, which is a key source of competitive advantage.
To repair damage, Boeing needs to provide more than just quick and easy technical
fixes. It must also win back the pilot's trust, and they want to know if they are told
everything they need to know about the plane they fly. There is no software there
b) Update & Training on the new software MCAS
The update of the software to judge the condition of the aircraft based on two or more
sensors should be done in order to get the accurate data and automated solution. Meanwhile
pilots should be trained for emergencies in the case the software malfunction. As
automaton is without its hazard knowledge on how to handle the situations when it arises
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instead of doing the wrong things. The best way to deal with emergencies is to train and
practice beforehand, so that response becomes automatic, this leaves pilots without the
mental automation that it might save them during a crisis.
c) Focus on the other part of the business
As Boeing is under fire in regards to their commercial aircraft, Boeing should divert
their attention to other parts of their business, for example, Boeing could focus on the space
exploration which SpaceX are dominating right now until the masses calm down.
2) Long term solution
a) Develop new products and maintain brand image
In the long term, to avoid this kind of thing happening again, it is important for Boeing
to constantly study its own new products, and to keep an eye on its competitors and avoid
being too passive. Such as the of the accident, it is because our competitors first suddenly
introduced a new type of aircraft, the Boeing company in order to win back market, used
only three months to launch a new aircraft, but in fact this aircraft is to cater to the
competitiveness of the market, it lacks practice and didn't even get a certain certification
or quality testing, in general, a new aircraft launch, just to test time of the plane are more
than three months . Three months for Boeing has finished the innovation of this aircraft
design and safety testing, which is behind this aircraft the main reason why so many
problems.
Therefore, it is very important to have an early insight into the dynamics of competitors,
and the company's internal innovation research must not stop. The safety and quality of the
products must be the most important. It is impossible to launch a new aircraft with a highrisk factor because of the urgency. Because the branding of a product requires a very long
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Boeing
time and a lot of money, it takes only one accident to destroy a brand. Commit to building
and maintaining a good brand image.
b) Fully understand the opponent
It is very important to understand the movements of the opponents at all times.
Boeing did not know in advance that his competitors have developed a new type of aircraft.
After knowing that the other party has pushed the aircraft into the market, it hastened to
start a new type of aircraft. Actually, even if the other party has seized a certain market
because of the launch of a new type of aircraft, it is much less than the market lost by
Boeing’s launch of a poor-quality product. In the long term, fully understanding the
opponents, we must do a good job in market research, even if there is an emergency, we
must stabilize the market, and we can make certain discounts or price reduction activities,
or improve after-sales service, etc.
c) Solve the trouble about A320neo
Jet fuel is a major cost for airlines. With labor costs largely driven by collective
bargaining agreements and regulations that require minimum ratios of flight attendants per
passenger, fuel is the cost center airlines have the most capacity to do something about.
Consequently, improving fuel efficiency has emerged as one of the major bases of
competition between airline manufacturers.
If you roll back to 2010, it began to look like Boeing had a real problem in this regard.
Airbus was coming out with an updated version of the A320 family that it called the
A320neo, with “neo” meaning “new engine option.” The new engines were going to be
more fuel-efficient, with a larger diameter than previous A320 engines, that could
nonetheless be mounted on what was basically the same airframe. This was a nontrivial
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engineering undertaking both in designing the new engines and in figuring out how to make
them work with the old airframe, but even though it cost a bunch of money, it basically
worked. And it raised the question of whether Boeing would respond.
One of the issues for Boeing is that it takes more work to put new engines on the 737
than on the A320. The 737 is lower to the ground than the A320, and the new engines have
a larger diameter. So while both manufacturers would have to do work, Boeing would have
more work to do to jack the airplane up. That will cost more while reducing commonality
with the current fleet, but reduced commonality means higher costs for the airlines as well.
Under the circumstances, Boeing’s best option was to just take the hit for a few years
and accept that it was going to have to start selling 737s at a discount price while it designed
a whole new airplane. That would, of course, be time-consuming and expensive, and during
the interim, it would probably lose a bunch of narrow-body sales to Airbus.
d) Research on Renewable source.
As the fuel is one of the factors in the efficiency of the aircraft, with renewable energy
such as using solar energy, investment on applying these technologies on the commercial
aircraft would save so much on their cost in the future and their aircraft would be able to
sustain longer distance. This would require large investment and also a long time of
research and testing to implement this solution but it will greatly improve their business as
it can be implemented to their other aircraft besides the commercial planes, it would
probably lose a bunch of narrow-body sales to Airbus.
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Bibliography
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● https://www.vox.com/business-and-finance/2019/3/29/18281270/737-max-faascandal-explained
Boeing is in the middle of a safety-related PR nightmare. Can it recover? (2019, march 17).
Gaby Del Valle.
● https://www.vox.com/the-goods/2019/3/27/18284285/boeing-737-max-crashsafety-public-relations
Why Boeing really needs to allay 737 Max aircraft concerns. (2018, November 28). Joe
Cahill.
● https://www.chicagobusiness.com/joe-cahill-business/why-boeing-really-needsallay-737-max-aircraft-concerns
What will happen to Boeing now? (2019, March 21). Tim Fernholz.
● https://qz.com/1576993/what-will-happen-to-boeing-after-the-737-max-crashes/
Boeing Works to Manage a Crisis With Unknown Costs. (2019, March 13). Natalie
Kitroeff.
● https://www.nytimes.com/2019/03/13/business/boeing-737-manufacturercost.html?save=nyt-gateway-stories
Costs for Boeing Start to Pile Up as 737 Max Remains Grounded. (2019, April 12). David
Gelles.
● https://www.nytimes.com/2019/04/12/business/boeing-planes-economy.html
Boeing Gross Profit 2006-2019.
● https://www.macrotrends.net/stocks/charts/BA/boeing/gross-profit
Boeing Built Deadly Assumptions Into 737 Max, Blind to a Late Design Change. (2019,
June 1). Jack Nicas, Natalie Kitroeff, David Gelles and James Glanz.
● https://www.nytimes.com/2019/06/01/business/boeing-737-max-crash.html
Claims of Shoddy Production Draw Scrutiny to a Second Boeing Jet. (2019, April 20).
Newyork Times. Natalie Kitroeff and David Gelles.
● https://www.nytimes.com/2019/04/20/business/boeing-dreamliner-productionproblems.html
Boeing Job Cuts. (2016,February 10). Seattle Times aerospace, Dominic Gates.
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Group 5
Boeing
● https://www.seattletimes.com/business/boeing-aerospace/job-cuts-planned-atboeing/
The Boeing Company. February 28, 2019. Retrieved March 16, 2019.
● http://active.boeing.com/commercial/orders/displaystandardreport.cfm?cboCurren
tModel=737&optReportType=AllModels&cboAllModel=737&ViewReportF=Vi
ew+Report
The Boeing 737 Max and the Problems Autopilot Can’t Solve. (2019, March 14). Jeff Wise.
 https://www.nytimes.com/2019/03/14/opinion/business-economics/boeing-737max.html
APPENDIX
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