1. Outsource approximately 70% of manufacturing. Could it find suppliers who could consistently make the high quality parts needed by Boeing?
Actually to outsource 70% of the manufacturing process is a very huge % and will result in facing many problems because of less control over the process attached to this high% of outsourcing. This will also considered as a high risk (Threat)the company will have to bear in terms of quality and lead time, because the more the outsource the company base its strategy the less the control the company will practice over its products.
Looking to the reasons that might be behind the outsourcing decision are as follow: Lacking the required capacity to meet forecasted demand ( weakness) Inefficient production to achieve low cost (weakness)
2. Reduce final assembly time to three days (compared to 20 for its 737plane) by having the suppliers build completed plane sections. Could this many suppliers meet Boeing’s exacting deadlines?
As mentioned above to depends heavily on suppliers who we usually have less control (high threat) over them will be always attached with high risk to meet specific standards or dead time, This will also require the company to build a very strong strategic relationship or partnership with suppliers in order to reduce the risk of the less control.
This will definitely increase the bargaining power of suppliers and might let them be hard negotiating the prices, knowing that Boeing is looking for production efficiency to reduce the cost will not be an easy objective the company will be capable to achieve. On the other hand, if this is succeeded Boeing will have an advantage over its competitors which is a strength
The Term Paper on Evaluation of Comptronix Corporation: Identifying Inherent Risk and Control Risk Factors
1. Professional auditing standards present the audit risk model, which is used to determine the nature, timing, and extent of audit procedures. Describe the components of the model and discuss how changes in each component affect the auditor’s need for evidence. The audit risk model is used to determine the nature, timing, and extent of substantive audit procedures. The components of audit risk ...
3. Use new, lightweight composite materials in place of aluminum to reduce inspection time. Would the plane be as dependable and easy to maintain as Boeing’s aluminum airplanes?
This plane is designed to fly faster, higher, farther, cleaner, more quietly and more efficiently than any other medium sized jet, also this will be consider as Distinctive competency that the company will have over its competitors which will give the company a strength
4. Resolve poor relations with labor unions caused by downsizing and outsourcing. The mechanists’ union would have to given a greater voice in specifying manufacturing procedures. Would Boeing’s middle managers be willing to share power with an antagonistic union?
This poor relation will definitely be a weakness point that Boeing needs to tolerate in order to reduce bad effects; this also will reduce the capabilities of Boeing to build the planned distinctive competency that might give Boeing a completive advantage over its competitors.
So thinking of resolve this issue will give Boeing an inside strength
5. Which vision of the future was correct? The long term of both Boeing and EADS depended on two contrasting strategies decisions, based on two very different assessments of the market. If EADS was correct, the market would continue to demand everlarger airplanes. If Boeing was correct, the current wave of Jumbo jets would soon replace them. Which company’s strategy had the best chance of succeeding?
It is really hard to judge the vision of the future of both companies with the available data on the case, but through searching over the internet and in terms of market share and profitability will find the following:
The Business plan on The Boeing Company Marketing Policy
... includes compliance with all laws and regulations. Boeing- Airbus market share The rivalry between these giants, the only ... behaviour With sales processing, Boeing has Boeing International Sales Corporation for international sales and Boeing Sales Corporation for domestic sales. Boeing depends on ... products.From this information it would appear that Boeing's planes which are suited for low capacity ...
EADS had succeeded to gain more market share
Quotation “If Airbus’s main mission has been to gain market share, one has to recognize that this mission has so far been highly successful. In the year 2000, Airbus delivered 311 planes to airlines and Boeing delivered 489. Eleven years later in 2011, Airbus delivered 534 planes and Boeing 477”
On the other hand Boeing had succeeded to achieve higher profitability Quotation” But Boeing has been more profitable. In 2011, its EBIT margin in commercial planes was 9.7% vs. 1.7% at Airbus” Quotation” From 2000 to 2011, Boeing sales grew at a small 1.4% annualized rate and EBIT at only 2.3%. At Airbus, sales have grown at a 7.6% annual rate (11% in dollar terms) but EBIT has nosedived into the red for the past six years. Boeing’s commercial plane division accounted for 66% of its group sales in 1999 and now accounts for 52%. Airbus sales have remained consistently above 60% of EADS group sales and reached a new high of 67% in 2011. Airbus’s drive for market share at the expense of profits has had a very measurable impact: its revenues are up, its profits are down, and Boeing’s airplane sales and earnings have flatlined”
http://seekingalpha.com/article/592001-boeing-vs-airbus-orders-and-profits
Internal and External Factors analysis
