External Analysis
INTRODUCTION
ANALYSIS
ALTERNATIVES
RECOMMENDATION
IMPLEMENTATION
PESTELD ANALYSIS
Political & Legal
• TRUMPS TRADE WAR
• CORPORATE TAX
REFORMS
• BREXIT
• ENVIRONMENTAL LAWS
• TRADE REGULATIONS
• LABOR LAWS
• HEALTH & SAFETY LAWS
• TERRORISM, WAR,
Technological
• TECHNOLOGICAL
DEVELOPMENTS
• THREAT OF UNAUTHORIZED
ACCESS TO DATABASE
P&L
T
Economy
•
•
•
•
•
•
Demographic
GLOBAL ECONOMIC GROWTH CYCLE
EXCHANGE RATE AND CUSTOM DUTY
VARIABILITY IN LABOUR COSTS
INFLATION RATE
UNEMPLOYMENT RATE
MATERIALS COSTS FLUCTUATIONS
E
D
Social
• PUBLIC PERCEPTION AND LOSS OF
TRUST IN COMMERCIAL AIRCRAFTS
S
E
• AGEING POPULATION IN WESTERN
COUNTRIES
• YOUNGER POPULATION IN EMERGING
ECONOMIES
Environmental
• CONTAMINATION OF SOIL AND WATER
FROM OPERATIONS
• INDUSTRIAL AIR AND WATER POLLUTION
REGULATIONS
• FINANCIAL BENEIFTS OF SUSTAINABLE
ENERGY
HOW CAN BOEING MANAGE THE REPERCUSSIONS OF THE ACCIDENTS?
INTRODUCTION
ANALYSIS
ALTERNATIVES
RECOMMENDATION
IMPLEMENTATION
FURTHER REVIEW
Lawsuits
Public Trust
Regulation
• 150+ filed by families of
passengers
• Derivative lawsuits by
shareholders
• Investigation by Department
of Justice
• Potential billions in claims
• Established fund for victim’s
families
• “I would rather walk..” – U.S.
Senator
• Legal strategy could backfire
on PR.
• Flight attendants asked the
union to not work on 737
MAX when it returns
• Congressional Investigations
• FAA delegated much of
certification process to
Boeing
• Overhaul of Certification
Process
• Increased costs for new
products.
• Delayed timeline on Go To
Market.
BOEING MUST CONTROL THE NARRATIVE ON IT’S ACTIONS GOING FORWARD
INTRODUCTION
ANALYSIS
ALTERNATIVES
RECOMMENDATION
IMPLEMENTATION
SECTOR ANALYSIS – COMMERCIAL AEROSPACE
Largest suppliers of commercial
aircrafts: Boeing and Airbus
Both Airbus and Boeing have over
five years of production backlog for
their commercial aircraft model
Total projected revenue 2019:
$712B (manufacturing)
Production capacity set to increase
56% over 2019 and 71% in 2020
Estimated YoY Growth: 5.4%
INTRODUCTION
ANALYSIS
ALTERNATIVES
RECOMMENDATION
IMPLEMENTATION
COMPETITOR ENVIRONMENT IN COMMERCIAL
$70
900
800
$60
600
$40
500
$30
400
Deliveries
Revenue (in billion $)
700
$50
300
$20
200
$10
100
$0
0
Boeing
Airbus
Revenue
Market Share
Bombardier
Deliveries
*2018 Annual Figures
BOEING IS LEADING IN A VERY TIGHT AND COMPETITIVE DUOPOLY
INTRODUCTION
ANALYSIS
ALTERNATIVES
PORTER’S 5 FORCES
RECOMMENDATION
Threat of Substitutes - Low
•
FEW SUBSTITUTES FOR AIRCRAFTS
Bargaining power of Customers –
MODERATE
Power of Suppliers - MODERATE
•
•
•
•
Competitive Rivaly - High
BARGAINING POWER OF SUPPLIERS –
MODERATE
THREAT OF FORWARD INTEGRATION –
LOW
SUBSTITUTE FOR SUPPLIERS
PRODUCTS – MODERATE – LOW
FINANCIAL CLOUT OF BOEING- HIGH
IMPLEMENTATION
•
•
SERVICE DIFFERENTIATION – HIGH
EXISTING NUMBER OF COMPETITORS HIGH
COMPETITION IS IMPROVING QUALITY
AND INNOVATION
•
•
•
•
•
CONSISTS OF AIRLINES GOVERNMENT AND
MILITARY
BARGAINING POWER – MODERATE
OPTIONS AVAILABLE – HIGH
SWITCHING COST – HIGH
LOW SUPPLY FOR DEMAND- BOEING $500B
BACKLOG
Threat of New Entrants- LOW
•
•
•
CAPITAL COST –HIGH
INDUSTRY GROWTH – MODERATE
BARRIERS TO ENTRY - HIGH
EXISTING IN A DUOPOLY BOEING MAY NOT FACE LOSS OF CUSTOMERS
INTRODUCTION
ANALYSIS
ALTERNATIVES
RECOMMENDATION
IMPLEMENTATION
COMMERCIAL MARKET OUTLOOK
Boeing has a problem with China
BOEING NEEDS TO ACT NOW OR BE REMOVED AS THE FIRST IN THE MARKET BY 2030