Executive Summary

The purpose of this report is to analyse the problems and issues faced by the Boeing company over history and provide a strategic plan for its future growth and development.

At first this report gives an introduction on the background and the current situation of Boeing. Then it conducts a series of analysis on the factors that might influence the development of the company, they include: SWOT analysis to discover the company’s internal strengths and weaknesses together with its external opportunities and threats; Industry and competitive analysis which by applying Porter’s five forces illustrates the competitive environment in the aviation industry and the situation Boeing is in; Company analysis- by analysing
In order to get more market share and to compete with Boeing’s 777, Airbus plans to develop their own long range aircrafts which are more fuel-efficient and with the advanced high technological design such as a newer flight management system and liquid crystal displays (Velocci Jr. 2000). However, it takes time and money to develop a new airplane. For example, Airbus started to design their A380 in 1994 and the first airplane is only expected to be delivered to customers in 2006 (Mango 2006). This model will cost the company $10.7 billion to develop (Reinhardt, Rossant & Balfour 2000). Therefore, during the coming years, Boeing should be able to enjoy the competitive position of their 777 aircrafts, but a good marketing strategy should be implemented to further increase the sales.

2.1.2 Profitable order at hand:

McDonnell Douglas held the second largest contract from the US Defence Department which amounted to $22.5 billion. This contract automatically fell in Boeing’s hands when they merged McDonnell Douglas in 1997. The production of this contract had started in the same year and is expected to continue till 2010 (Boeing 1997; ‘Fortune’ 1997, cited in Hill, Jones & Galvin 2004). Since the military aircrafts are much more profitable than commercial aircrafts for Boeing, this contract is going to bring the company