Executive Summary- Boeing
Although there are high barriers to entry into the aerospace industry, once inside the industry, there is even higher rivalry. Boeing entered the aerospace market just a few years after the Wright Brothers made their first flight. At this point, the industry was growing very quickly. There were so many innovations that allowed several new models of airplanes to come out every year. However, now, almost one hundred years later, the aerospace market has matured and growth has slowed down. The pace of new airplane technology was slowing down and its competitors were catching up.
Boeing was a leader in technology and new models of airplanes, therefore, their prices were higher than some of the competition. The government was giving subsidies to Airbus to develop new aircrafts. Most analysts believed that the airplane manufacturer segment of the industry was about to enter an era of unprecedented price ...view middle of the document...
One alternative, and the one I would recommend, would be to focus more on the defense division by applying new technology to the market. Most of the e-Enabling advantage has been geared towards the commercial airplane division. Boeing faced a decrease in their sales after the terrorist attacks of September 11th. People were afraid to fly. The demand for flights decreased, and, therefore, the need for new airplanes decreased. However, after the terrorist attacks, the United States entered into war. This would increase the demand for defense airplanes. Boeing could implement the e-Enabling Advantage they have created for the commercial airplane division to the defense airplane division. They should look at where the Department of Defense is going and how they can help them be successful. A problem that could exist with this alternative is confidentiality issues. The government does not want the enemy to know any of their technology or what their defense airplanes are capable of.
Another alternative would be to test new markets with familiar technology. As the economy is recovering after a recession, people will begin to have more discretionary income. Boeing could begin a new division of private airplanes. They already have the technology and a lot of the resources to design and produce airplanes. It should be much easier to produce a smaller version of a commercial airplane. One problem with this alternative is that while there may be an increase in the amount of discretionary income, there will not be enough interest from people to create a sustainable advantage over the competition.
A third alternative would be to use technology to grow their international market. It seems that most of Boeing’s sales are in the United States. They are leading the industry in IT with the e-Enabling advantage, and they should take advantage of their competitive advantage while they are still ahead. A problem with this alternative is that while they will make a huge profit in the short run with the technology they already have, other companies will eventually create something similar, and the e-Enabling advantage will become standard.