ORDER PLACED

Boeing Commercial Aircraft : Comeback ?Presented by-Amit BarmanDebasish PatraDevkumar MukherjeeKaushik SamantaSougata Mitra

ORDER PLACED BY BOIENG VS AIRBUSORDER PLACEDBY BOEING & AIRBUS

Found in the year 1916 in the Puget Sound region of Washington state.

Market leader in the industry of military and commercial aircraft manufacturing.

Customer base and support in 150 countries.

Employee strength of 165000 around the globe

More than 12000 commercial jetliner engaged in aviations services.

The commercial jetliner (SBU) total revenue earned during the period in 2011 stands at 36.5 bn USD. COMPANY PROFILE

TIMELINEYEAR EVENTS1957Boeing 707 was the worlds first commercially successful passenger Jet aircraft.1959model 720 successfully introduce.1963Model 727 introduce.1967Model 737 introduce.1969Model 747 introduce.1970Boeing Computer Service is formed.1971Boeing SUPERSONIC project is scrapped.1972Boeing become involved in Space Shuttle program & puts its mark on satellites.1983Airbus starts giving competition to Boeing.1994Boeing 777, largest twinjet, takes off.1995Boeing gets involved in space station project.TIMELINE

year EVENTS1996Boeing merges with Rockwell Aerospace and Defense unit, Renamed as Boeing North American. 1997McDonnell Corp & Boeing merge.Boeing 777 sets a record for flying around the world in 41 hrs and 59 Min.

Rocket Dyne division of Boeing North American wins the first NASA award for excellence

2000Boeing announced acquisition of Jeppesen Sanderson Inc. the world leading provider of Flight Information Services for $1.5 bn cash.

Receive and order of $ 10.4 Million contract to begin low rate initial production for the US Navy.

2001Headquarters is moved to Chicago. TIMELINE

Contd.year EVENTS2002Boeing deliver 1000th 757China airlines orders 10 Boeing 747

2002Boeing named 13th largest corporate air polluter.2003Airbus bites more market share.

Commercial aircraft product line

Boeing 737Produced1968presentNumber built7,251 as of July 2012Unit cost737-100:US$-32 millionBoeing 747Produced1968present Number built1,435 as of April 2012Unit cost747-100: US$24million (1967)Boeing 767Produced1981present Number built1,030 as of July 2012Unit cost767-200ER: US$160.2millionBoeing 777Produced1993present Number built1,030 as of July 2012Unit cost777-200ER: US$258.8millionBoeing 787Number built31Program cost US$32 billion (Boeing's expenditure)Unit cost787: US$206.8million (2012BBJProduced1998present Number built159 - As of July 28, 2010 (IncludingUnit cost US$ -47310 million as of 2009

Boeing and Airbus compete in a near-duopoly in the global market for large commercial jets comprising narrow-body aircrafts, wide-body aircrafts and jumbo jets.

Began as a consortium of aerospace manufacturers.Subsidiary of European Aeronautic Defense and Space Company (EADS)

Acquired former arch-rival, Mcdonnell Douglas, in 1997The largest global aircraft manufacturer by revenue, orders and deliveries.

DuopolyBoth companies compete against each other at every product level

Products Outline

Product Development Cost of Airbus & Boeing.CategoryAirbusDevelopment CostBoeingDevelopment costSingle Aisle Family ModelA-319757A-320$2.5 bn737- 200A-321767$1.5 bn.A-318757-300Wide Bodied Aircraft ModelA-350767,747A-330$3.5 bn777A-340$ 3.5 bnSuper JetA-380$15 Bn787$ 8 Bn

PORTERS FIVE FORCES FOR AIRLINE INDUSTRY Threat of New Entrants- Low

Existing loyalty to major brands

Incentives for using a particular buyer (such as frequent shopper programs)

High fixed costs in R & D

Scarcity of resources (technical )

High costs of switching companies (maintenance cost)

Government restrictions or legislation

Power of Suppliers- High

The airline supply business is mainly dominated by Boeing and Airbus. For this reason, there isn't a lot of cutthroat competition among suppliers. Also, the likelihood of a supplier integrating vertically isn't very likely.

Power of Buyers- Low There are high costs involved with switching airplanes, but also take a look at the ability to compete on service.

Availability of Substitutes-Low

For regional airlines, the threat might be a little higher than international carriers. When determining this you should consider time, money, personal preference and convenience in the air travel industry.

Competitive Rivalry. High

Highly competitive industries generally earn low returns because the cost of competition is high. This can spell disaster when times get tough in the economy.

Future Trends Of Aviation Industry Future trends and forces of Aviation industry depends upon 1. Hub and spoke vs. point to point model 2. Fuel cost 3. Strength of euro vs. dollar 4. Eco friendly operation.

Core CompetencyProactive in meeting customer demand and needs.

Customizing of aircraft and designing.

Large-scale implementation system.

Uniqueness in contract and agreement with both NASA and United States Air Force.

The power of vertical integration.

Boeing Entering Turbulent Times Uncertainty to words target market.

Concern about Boeing corporate leadership.

Lack of proper and ethical Management during the rein of Philip M Condit.

Labour discord(Frequent in sourcing, Transfer of labour to another company at lower remuneration and benefit)

Boeing sluggish response to competition to airbus

Quality being a concern as most of the manufacturing unit are outsource.

Comeback Strategy of BoeingUnique leadership style of Jim McNerney by making innovation as a culture.

Manufacturing of fuel efficient Airplanes in contrast to the enhancement of fuel prices.

Competitive advantage gained from the ongoing management strife and other problem in airbus.

Corporate Level StrategyStrategic DecisionValue addition and Business outcome1. Investments in narrow bodied 757 and wide bodied 767.1. Investments made from the positive cash flows attained through breakeven of their earlier models.2. Subcontracting in case of Boeing 777( 60% of the work)2. Resulted in reduction of developmental costs.3. Merger between Boeing and McDonnell Douglas3. Resulting in increase of their presence in the defense and space side of aerospace4. Movement of corporate head quarter from Seattle to Chicago.4. signal to the investment community that Boeing was farmore than commercial business

Corporate Level StrategyStrategic DecisionValue addition and Business outcome5. Decision to produce new low cost, right sized aircrafts5. Resulting in increase in profit due to demand for nonstop point to point flight. 6. launch of 787 aircraft6. stiff competition to Airbus A350 and A380 aircrafts.

Business Level StrategyStrategic DecisionValue addition and Business outcome1.Adoption of Lean Production and Six Sigma quality improvement process.1. Better Management of warehouses in terms of inventory, space and time as well as capital, ultimately improving the value chain.2. Introduction of moving assembly lines.2. Reaching of timeliness concepts by tools being delivered directly on the shop floor instead of fetching it.3. Government subsidies 3. Boeing got subsidies from NASA to develop technology which had helped them in developing their commercial jet aircraft.

Quality and Productivity Improvement Through lean Progress737 Lean Progress

50% factory cycle time reduction.132% inventory turns increase.55% cost of quality reduction36% customer introduction hours reduction.41% covered floor space reduction.

777 Lean Progress

14% Factory flow time reduction32% Inventory turns increase27% Engineering quality improvement7% Cost of quality reduction43% Factory footprint reduction

SWOT Analysis of Boeing

PORTERS FIVE FORCES FOR BOEING FactorHighModerateLowNew Entrant - Airbus Threat from Substitute Bargaining power of Supplier -Vertical Integration Bargaining power of buyer -Duopoly market Rivalry -First mover advantage

Boeing Orders vs. Airbus

Source: www.boeing.com : www.airbus.comBoeing delivers vs. Airbus

Source: www.boeing.com www.airbus.com

Boeing Orders and delivers

Market Classification

Ratio Analysis Of BoeingSource: www.boeing.com

Study on the revenue on Boeing

Source: www.boeing.com

After the case Financial Status

Source: Zonebourse.com

After The Case Financial Status

Source: Zonebourse.com

THANK YOU