Executive Summary Thecase study refers to the big production company of airplanes known as Boeingwhich dealt with huge risks regarding the making of their Boeing 777. Thereason why this project was at high risk because the project was extremelyexpensive, about 6 billion dollars and they needed a huge amount of workforceto produce the product. At the initiation of the project, the company wasfinancially stable and had a string tendency to start an initiative of thismuch scope and risk. However,Boeing did realize that the travelling demand will increment and in thisregard, additionally more airplanes which could transport more individualswould be required. As the company was a solid post in the market they needed togo for taking a huge risk as to remain aggressive for the competitors in themarket and offer an item which was requested.
Themodels of the aircrafts which they had were not according to what the customersdesired because some of the models for example, 767, had apparently noadvantages as compared to the other aircrafts. Thus the business strategy wasmeant to change and for Boeing the solution was 777 because it was set to bethe product that was going to revolutionize it all. However,Airbus, who was the biggest competitor of Boeing, came to know about thebusiness strategy of Boeing and changed its policy faster than Boeing. Airbusalso occupied more government subsidies and financial support. By 1990, therewere only two major leading airplane companies, Airbus and Boeing. Airbus wasdelivering aircrafts with a large scale manufacturing framework, which wasreflected in the lessening request figures. This was a standout amongst themost critical purposes behind Boeing to fire up the enormous project 777.
Problem statement Themain issue for Boeing was that its greatest competitor, Airbus, was one stepahead of Boeing and had a strategy for producing aircrafts in the most flexibleway. The strategy which Airbus had was also technologically advance thanBoeing’s strategy. Problem and Data analysis PhilipCondit aimed at finding out whether Boeing 767 would be a success or not whichis why he met United Airlines Vice President, Jim Guyette, for advice. Jimadvised him to not peruse 767 and instead go for another jet on a commerciallevel.
In the December of 1989, the project known as 777 was started and PhilipCondit was to be the lead in the project (Turnipseed, 1999). Condit decided tomake managerial as well as technological innovations in the assembling, designand manufacturing of the product. Conditwanted to revolutionize the manufacturing strategies as well as productionsystem of Boeing which was previously outdated. The main reason behind thischange in manufacturing and design at Boeing was due to Airbus industries.
Thisis because Airbus had a huge share in the market and was a major competitor (Condit, 1994). Thisnew approach was another open door for Boeing to outline and design another airship which would be proficient for the client and for the business strategy.The new cockpit outline which was like the 747 which a pilot could fly on thetwo air ships without additional preparation is an example of the design changemade in the 777 project.
Alternatives Eventhough Boeing made a great decision to start up the project 777 that gave the opportunityto change as well as renovate the entire manufacturing, managerial and designsystem, in my opinion, there were some other alternatives to be considered aswell. 1. Toproceed with the product offering of their other product, the MD keeping inmind the end goal to have another aggressively advantageous and competitiveitem available in the market.2. KeepingBoeing 767 as a commercial project and not giving up on it. 3. Startinga completely different product line which dealt with military and spaceaircrafts.
Key decision criteria Thedecision criteria are based on attracting more customers through competitiveproduct line, decreasing the risk of a company going bankrupt and focusing ontwo companies merging. Boeing could have their expenses shared by enhancing theircreation line in a savvy way. While having the MD as their client and the otherway around they could build their estimation of the manufacturing, design andmanagerial costs and furthermore cut off the generation costs. The targetmarket and market share is also another decision criteria.
Alternatives analysis and evaluation Thealternative one suggests that keeping MD was another alternative which Boeingshould have considered because MD would have been a huge success in the marketunder the name of Boeing in light of the fact that being able to really drivetwo distinct items is superior to one. On account of one item isn’t as gainful,the other one can supplement the hole in income. Additionally taking a ganderat the character of the organization it is smarter to have distinctiverationalities which apply to various client desires.
Thesecond alternative, keeping the Boeing 767 project as well would have beenbetter off because the investment would not have been a total lost cause then.The 767 project would have kept the market share open and would not have been atotal failure. Thethird alternative, starting a completely different product line which dealtwith military and space aircrafts would give the company a new target marketand expand its horizons.
The first alternative is the best one because itenables the company to increase the target market and make a product offeringwith good pricing. Recommendation Thecompany ought to have the product line of MD and attempt to profit and bringadvancements towards the two organizations. Moreover, it is less demanding tochange the theory of a small organization and furthermore less expensiveinstead of rolling out an improvement to an organization which had been workingin a similar state of mind for a long time (Jørgensen, 2006). Moreover, it isalso recommended that Boeing should try to obtain subsidies as well in order toreach the fiscal standpoint of Airbus. Action and implementation plan First Quarter Offertwo different models on the market and upgrade as well as invest in them by introducingthe new technology. Merge both of the companies together.
Stakeholders · Customers· Investors· Employees· CompetitorsScope Attractingmore customers through competitive product line, decreasing the risk of acompany going bankrupt and focusing on two companies mergingSecond Quarter Enhancethe target market by introducing new innovation in the product line.Third Quarter Launchanother model which will be manufactured by McDonnel and Douglas Company incollaboration with Boeing. Scope It willattract and retain new customers. After thorough market research an action planformulated on market trends in coherence with Boeing’s success and realizingthe demands of Aviation Industry, a proper strategy to launch MD will besuccessful.
References Condit, P. (1994). Focusing on the customer: How Boeing does it. Research-Technology Management, 400.
Jørgensen, N. (2006). The Boeing 777: Development Life Cycle Follows Artifact. World Conference on Integrated Design, 876. Turnipseed, D. (1999).
A history and evaluation of Boeing’s coalition strategy with Japan in aircraft development and production. International Journal of Commerce and Management, 453.