Boeing Case Study

INTRODUCTION

This is a case report which discusses a strategic decision made by the top management of Boeing in the year 2004 to construct a new and innovative airplane, the Boeing 787. The market share of Boeing had declined from almost 70% to less than 35% by 2004. Boeing was also spending more than their competitors, EADS Airbus, more than 10% more to build a plane. It then dawned on Boeing that they needed to act fast and strategically in order to regain control over the commercial airline industry. However, they faced a big challenge; what would most likely be suitable for the market, the proposed Boeing 787, or a larger jumbo jet similar to the Airbus 380?

Boeing is the largest aerospace competitor in the world and a fierce competitor to the EADS Airbus in the aircraft industry. Both companies are rivals and do not fare well diplomatically. An agreement was signed in 1992 between both companies stating to which extent subsidies were allowed from each of their governments. This agreement was unsuccessful, as both companies blamed each other for not abiding by the rules and regulations of the agreement. A formal complaint was filed by Boeing in October 2004. This report will answer the case study question regarding listing the forces that favor both scenarios by evaluating the external factors and analyzing the forces. Furthermore, this report will evaluate which vision of the future was correct for Boeing and Airbus and will analyze the company strategy that had the best chance of succeeding.

Case questions

PortersFive Forces for *Boeing*

- Threat of New Entrants

- Bargaining power of buyers/users

- Threat of substitutes

- Bargaining power of suppliers

- Rivalry among competing firms

_________

PortersFive Forces for *Airbus*

- Threat of New Entrants

- Bargaining power of buyers/users

- Threat of substitutes

- Bargaining power of suppliers

- Rivalry among competing firms