The Impact of Mission, Vision, and Primary Stakeholders on the overall success of the Boeing Company
The Boeing Company is the world's largest aircraft manufacturing corporation. It designs, develops, manufactures, and sells commercial aircrafts, military aircrafts, missiles, electronic and defense systems, satellites, and highly advanced information and communication systems for airline companies, aerospace research institutes, defense organizations, and governmental bodies. The Boeing Company aims to become the leading player in the commercial aircraft industry by promoting innovation and imagination, and serving the worldwide customers with technical excellence and superior services. Its vision and values are based on integrity, quality, customer satisfaction, shareholder value, and corporate social responsibility. The mission, vision, and corporate values shape the way Boeing formulates its business strategies for its worldwide operations. All these values and corporate principles provide a framework to the organizational members to adopt the best practices for the success and sustainability of the company in the long run (The Boeing Company, 2013).
The primary stakeholders of the Boeing Company also have a significant role in its overall success. The company has built strong relationships with its business associates, partners, investors, suppliers, and distributors by delivering superior value to their money and efforts. In return, these stakeholders contribute to its success by playing their part in the most effective and efficient way. The suppliers and distributors have largely helped the Boeing Company in achieving operational excellence and cost leadership in its industry. Similarly, the business associates and partners have enabled it to reach and serve global markets in an efficient and competitive way (The Boeing Company, 2013).
2. Analysis of the Competitive Environment using Michael Porter's Five Forces Model
2.1. Rivalry among existing Competitors:
The Boeing Company operates in the Business-to-Business (B-2-B) market where it has to face a stiff competition from large scale multinational corporations. The biggest industry rivals for the Boeing Company include Raytheon Company, Lockheed Martin, Airbus, Northrop Grumman, General Dynamics, AeroVironment, Inc., Rockwell Collins, Embraer-Empresa Brasileir de Aero, Grupo Aeroportuario, Orbital, Spirit AeroSystems Holdings, and Alliant Techsystems. These rivals are a direct threat to the Boeing Company's growth, sales, and profitability. Due to the participation of large scale B-2-B corporations, the industry has been showing a fast growth rate in the United States and other major markets around the Globe (Kotler & Pfoertsch, 2007).
2.2. Threat from the New Entrants:
The threat from new competitors is quite low for the existing businesses. Reason being, the manufacturing of aircrafts, missiles, and other high-tech aerospace products require huge investment in plants, machineries, information systems, satellites, and communication technologies. Moreover, high administrative, supply, distribution, and sunk costs make the entry for new competitors highly intricate. In order to survive and operate in a competitive way, new companies have to invest heavily in advanced technologies and achieve economy of scale through huge level of production (Keegan & Bhargava, 2011).
2.3. Threat from the Substitute Products:
The Boeing Company does not face any threat from substitute products. It is because its customers (like airline corporations, research institutions, defense corporations, and governments) cannot find alternatives or substitutes to their required products. Therefore, the absence of substitutes has made this industry highly attractive for the existing businesses.
2.4. The Bargaining Power of Suppliers:
The suppliers and distributors in this industry have a limited bargaining power as compared to the Boeing Company and other B-2-B corporations. Due to the low concentration and a high level of competition on the basis of quality, pricing, and business costs, the suppliers are always in a quest to make relationships with large scale businesses in order to secure their future in the industry (Shaw, 2007).
2.5. The Bargaining Power of Customers:
In contrast to the limited bargaining power of suppliers and low threats from the substitutes and new entrants, the bargaining power of customers is not favorable for the Boeing Company. The major customers of the company are airline corporations and governmental organizations. These customers require special customization in their orders which are mandatory to be followed by the manufacturers (Yenne, 2005). Therefore, if the Boeing Company does not fulfill the requirements of its customers, they immediately switch to its competitors. Moreover, the customers also demand quality, reliability, and innovation in their products which also strengthens their bargaining power against manufacturers (Saxena, 2009).
3. SWOT Analysis for the Boeing Company
3.1. Internal Analysis
The Boeing Company enjoys strong brand image and high level of appreciation among its stakeholders.
It has a quite diversified product portfolio -- ranging from aircrafts, satellites, and defense missile manufacturing to the development of high-tech information and communication systems (The Boeing Company, 2013).
The Boeing Company gives strong focus on Research and Development in order to keep itself innovative and produce the most advanced products for its high-profile customers.
It is the largest aircraft manufacturer in the world on the basis of revenues, size of the workforce, customer orders, and distribution network.
The Boeing Company has been observing a decline in the sales performance of its integrated defense systems for the last few years. Despite being the largest manufacturers of commercial aircrafts, the Boeing Company has not yet achieved market leadership in its defense aircrafts and information systems division.
The Boeing Company heavily relies on its business associates and subsidiaries in order to effectively operate at the global level. Some of these business associates have weak financial position which negatively impacts the Boeing Company's business (Hutt & Speh, 2010).
3.2 External Analysis
The demand for commercial aircrafts has been increasing day by day which has created a potential opportunity for the Boeing Company to expand its business operations and become operationally and financially stronger and more competitive against its rivals.
The Boeing Company can pursue horizontal and vertical growth strategies in the United States which is the biggest commercial and defense aircrafts market. These strategies will help it in becoming self-sufficient and achieving economy of scale.
The Boeing Company can invest heavily in its Industrial Research and Development (IRAD) section in order to produce the most advanced, reliable, and efficient aircrafts and information systems (Kotler & Pfoertsch, 2007).
The biggest threat for the Boeing Company is Airbus which is continuously expanding its operations in the U.S. And European markets. The other top competitors are also a big threat for its sales, customer base, and profitability.
The day by day increasing costs of raw material (like titanium, aluminum, etc.), fuel, and technology costs are putting direct pressures on the company's costs of operations. These threats are making it harder for the Boeing Company to achieve cost leadership in its industry (Shaw, 2007).
The governmental regulations on environmental protection measures, fuel consumption, industrial relations, and corporate social responsibility efforts are also becoming more and more complex and challenging for the Boeing Company.
4. Strategy for the Boeing Company on the basis of its SWOT Analysis
The biggest strengths of the Boeing Company are its financial strength, huge scale of operations, strong customer appreciation, and wide distribution network at the global level. It can capitalize on these strengths to avail attractive opportunities from the market, encounter possible threats, and overcome weaknesses which are putting negative pressures on its operational and financial performance. For example, it can utilize its financial strength to become self-sufficient in its operations. With the help of this strength, it can expand in both horizontal (diversification) and vertical (across supply chain) directions (Keegan & Bhargava, 2011).
The horizontal growth will help the company in expanding its product portfolio in related and unrelated industries while vertical integration will enable it to produce raw material for its business itself. These strategies will help the Boeing Company in encountering threats from the vertically integrated competitors which are enjoying economies of scale and competing in the industry through cost leadership strategy. Moreover, investment in Industrial Research and Development (IRAD) section and Total Quality Management programs will further help the company in producing more innovative, advanced, reliable, and fuel-efficient aircrafts and information systems.
5. Maximizing Profitability and Competitiveness
In order to maximize profitability and competitiveness against its industry rivals, the Boeing Company will have to focus on redesigning, restructuring, or improving its strategies at all levels, i.e. corporate level, business level, and functional level. At the corporate level, the Boeing Company can strive to achieve cost leadership and differentiation for its products. Through cost leadership strategy, the company will be able to control its unnecessary costs and get the maximum output from the least amount of inputs. The differentiation strategy can be used to establish a unique position in the industry. The Boeing Company can use this strategy for its commercial and defense aircrafts by introducing more innovative features and designs according to the requirements of the customers. Moreover, the differentiation strategy will give it a competitive advantage against its top rivals (Saxena, 2009).
At the business level, the company should adopt growth strategies for its business operations; especially in the most potential and emerging markets of the world like United States, Germany,…