STRAYER UNIVERSITY |
Business diversifications of Boeing and Ford Motors |
Victor Adejayan |
PROFESSOR WALTER WILLIAM DINGMAN |
BUS 508 |
A qualitative analysis of the diversification efforts of Boeing and Ford Motors. |
Diversification is the process of entering new business markets with new products. Such efforts may be undertaken either through acquisitions or through extension of the company's existing capabilities and resources. The diversification process is an essential component in the long range growth and success of most thriving companies, for it reflects the fundamental reality of changing consumer tastes and evolving business ...view middle of the document...
Boeing and Diversification:-
Boeing’s name has been synonymous worldwide with the production of war birds for decades, with one of the organization’s products; the Boeing B-52 Stratofortress, a strategic, long-range, subsonic, jet-powered bomber properly flagged the most successful airplane in military aviation chronicles since 1955.
Boeing started diversifying as early as the 1990s by strategic acquisition of the F-15 and F-18 through a successful merger with McDonnell Douglas and the B-1B by purchasing Rockwell in order to keep up with the demands of the military.
Recently, hard times almost brought Boeing down briefly from its financial and market leader pinnacle with its stock price falling and only in the production of small cargo aircraft was the organization able to hold its own, the was due to its contract with the US Air force to deliver the C-17, the USAF’s favorite cargo aircraft.
Fierce competition in the military aircraft production industry was another major factor that premeditated Boeing’s decision to diversify. Lockheed Martin’s F-35, Northrop Grumman’s F-22 and the famous B-2 Spirit, a popular USAF bomber took away a large segment of Boeing’s military aircraft production domain, initiating Boeing’s strategic diversification innovation.
In accordance to Barron’s explanation of Horizontal diversification, Boeing’s effort to reacquire the leadership status in its core industry included intensive innovation. The organization accomplished this by exploring and marketing newer and enhanced versions of technology to its existing customer, the never-broke government, faster than the competitors did.
While Lockheed Martin, Northrop Grumman were contesting for military aircraft production, Boeing leapfrogged into the production of armaments which include unmanned aerial vehicles (UAVs), guns and other war necessities thereby maintaining its relevance in war efforts and government contract.
Boeing conducts its armament business primarily with the US government but maintains a global presence is contracts with Australia, India, Canada, Qatar, UAE and other countries and NATO. The company derives huge financial capabilities from contracts such as the production and deliveries of £200m C-17ircrafts to the Royal Air force of Great Britain and a $368m EMD contract to develop a modern design for the flight deck and avionics of E-3 707 AWACS for USAF and NATO.
Boeing reaches its worldwide customers through its interactive website; http://www.boeing.com and conducts demonstrations and consultation for them in the US and abroad. According to the website; Boeing is organized into two business units: Boeing Commercial Airplanes and Boeing Defense, Space & Security, and is supported by Boeing International (Boeing).
Overall, Boeing’s diversification has been successful and pays huge dividends.
Ford Motors and Diversification:-
Ford Motors has been the leader of the American...