Strategic Management Assignment Analyzing Business Strategy Of Boeing
Question
Task: Prepare a detailed strategic management assignment evaluating the business strategy of Boeing using strategic management tools.
Answer
Introduction
The primary purpose of this strategic management assignmentis to critically evaluate the strategy of Boeing, for which the tools that have been used are SWOT analysis and Porter's five forces. Furthermore, the report also proposes a change agenda for the company in order to enhance its business, and therefore for this purpose, Kurt Lewin's change model has been used.
Critical evaluation of Boeing’s strategy
SWOT analysis
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Strengths |
Weaknesses |
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According to Warnock Smith et al. (2016), the differentiation strategy of Boeing provides it the ability to maintain technological resources advantage over its competitors, which is shaped by its unique process and its asset position. The strategies of Boeing are primarily focused on research and development, which contributes to the company's ability to develop a wide range of products and services while maintaining its market position. According to (Mocenco, 2015), the strategy of Boeing aims towards providing innovative technologies and aircraft in order to meet the rising competition, which has positioned the company in a higher position with continuous product development. |
According to Sarin (2018), Boeing has put itself in trouble because of its strategy, which compromised the safety of the passengers for an immediate and higher return. It is therefore, the major weakness of the company is that the company has lost the trust of its customers, and hence it will take time to gain the confidence of its potential once again. As stated by Kuczynski et al. (2021), one of the significant weaknesses of the company lies in its supply chain management because the company has numerous suppliers across the globe; however, the companies lacks central authority to direct activities and exert leadership. |
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Opportunities |
Threat |
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As per the annual report of Boeing (2019), it has been identified that the company's BDS strategy leverages the company's core business while capturing critical next-generation programs, which provide the opportunity to expand its presence in the international market while focusing on intense growth and productivity. Since the strategies of Boeing are primarily focused on innovation, it provides the opportunity to exploit its innovative advantage in the competitive market in order to deliver air mobility in the future. Schmuck (2021) stated that the involvement of suppliers in order to identify new opportunities with the company is likely to lead to cost minimization while increasing the company's revenue. |
According to Woo et al. (2021), emphasizing the competitive dynamics, the strategic issues faced by Boeing while maintaining its leading position in the airline industry have led towards increasing competitors for Boeing. In the contemporary period, Airbus has risen as one of the strong competitors for Boeing, posing a severe threat to the company. In addition to this, some airplane models of the company have been involved in the crash, because of which the regulators have grounded the entire fleet because of safety concerns. It is; therefore, the public may permanently associate with the firm due to a lack of safety, which makes it difficult to convince the public. |
Porter’s five forces analysis
Suppliers’ bargaining power- As per the report, the supplier network of Boeing stretches across the globe with more than 12 000 active suppliers, and therefore it is crucial for the company to establish and maintain a strong relationship with its suppliers (Boeing, 2020). Thus, the suppliers in the dominant position can reduce the margin that the company can earn in the market, which lowers the profitability of the company. Therefore, the bargaining power of the supplier is high in Aerospace companies.
Buyers’ bargaining power- The bargaining power of the buyer has been increasing significantly in recent years, mainly because of the high level of concern regarding convenience and safety. As stated by Khanijow (2021), with the advancement of technologies, the customers have many choices based on the cost, time, and layovers, which makes their bargaining power high.
The threat of substitutes- The threat of substitutes for the company is not high because the fewer substitutes for aircraft, wherein the number of commercial planemakers is also low. According to (Naimzade, 2018), Airbus and Embraer are the only options of substitute for the customers because they offer similar products and services.
The threat of new entrance-According toSundaram and Grantham (2020), the threat of new entrance is extremely low because the manufacturing of an airplane depends both on the high financial investment as well as skilled and professional human resources.
Competitive rivalry- As stated by Naimzade (2018), the competitive rivalry is moderate because the only competitor of Boeing is Airbus and Embraer, which manufacture close products to the organization.
Change agenda to improve business.
Unfreezing-This is the first stage of the change process within which the organization needs to prepare to accept the change that is necessary. This stage primarily includes breaking down the current status quo before building the new way of operation. In this stage, it is crucial for Boeing to realize that the business level strategy of the organization needs to be modified, along with its leadership style, because several weaknesses and threats for the organization have been identified. The motivating change and creation of a new vision shown in the unfreezing stage are regarded for the change while developing political support and managing the transition. Before the existing behaviors are unlearnt, in order to adopt new behaviors efficiently, the equilibrium must be unfrozen first (Sarayreh et al., 2013).
Moving- This stage is likely to be lengthy at Boeing because the employees, including the stakeholders, will take time to believe and act accordingly while supporting the change. Once the benefits related to the change are identified, then they will start driving the change and taking ownership. In this phase, the employees must be provided lots of opportunities in relation to team member engagement within the process, wherein the one who shows readiness to the change must be encouraged while motivating the one who resists the change. If any barriers of negative people will be identified, then it must be addressed immediately, wherein the managers, as leaders, should provide proper direction while being open to the incessant negotiations.It is essential to provide necessary training and coaching for the employees to face a new culture, environment, and technologies. Refreeze- The refreezing phase ensures to reinforce and sustain change in regard to the organizational culture, policies, norms, and practices. Buy this stage; the employees are likely to have embraced the new ways of doing things while internalizing the change. The employees, as well as the stakeholders, will be more confident, along with the feeling of stability; therefore, in this stage, Boeing must anchor the change within the organizational culture and strategies by supporting them and identifying the barriers to sustaining the desired change. In aid to do so, managers must provide leadership support while establishing feedback and a reward system to build commitment and enthusiasm. This stage will not occur rapidly but simultaneously, and therefore it is crucial for the organization to focus on planning activities, change management structures, and commitment planning (Hussain et al., 2018). The end goal of Boeing is to succeed in the change while enhancing its competitive strategy and advantage in the global market.
Conclusion
After the overall analysis, it can be aid that Boeing, primarily focusing on its innovative and generic strategy, has been facing certain strategic issues. The incident of a plane crash further hampered the strategic advantage of the company. In concern to the current weakness and threats, it is essential for Boeing to implement certain strategic changes within the organization in order to maintain its position and competitive advantage in the competitive market.
References
Boeing (2019). THE BOEING COMPANY 2019 ANNUAL REPORT What We Stand For. [online] Available at: https://s2.q4cdn.com/661678649/files/doc_financials/2019/ar/2019_Boeing_Annual_Report.pdf [Accessed 23 Mar. 2022].
Boeing (2020). Boeing: Diverse suppliers bring big value to Boeing and their communities. [online] Boeing.com. Available at: https://www.boeing.com/features/2020/07/diverse-suppliers-bring-big-value-to-boeing-and-their-communities.page [Accessed 23 Mar. 2022].
Hussain, S.T., Lei, S., Akram, T., Haider, M.J., Hussain, S.H. and Ali, M. (2018). Kurt Lewin’s Change model: a Critical Review of the Role of Leadership and Employee Involvement in Organizational Change. Journal of Innovation & Knowledge, [online] 3(3), pp.123–127. Available at: https://www.sciencedirect.com/science/article/pii/S2444569X16300087 [Accessed 23 Mar. 2022].
Khanijow, T. (2021). Porter’s Five Forces for Aviation Industry. [online] www.linkedin.com. Available at: https://www.linkedin.com/pulse/strategy-porters-five-forces-aviation-industry-twesha-khanijow [Accessed 23 Mar. 2022].
Kuczynski, J., Wang, C., Glass, M. and Hoffman, F. (2021). BOEING 737 MAX: A CASE STUDY OF FAILURE IN A SUPPLY CHAIN USING SYSTEM OF SYSTEMS FRAMEWORK. Issues In Information Systems, [online] 22(1). Available at: https://iacis.org/iis/2021/1_iis_2021_51-62.pdf [Accessed 23 Mar. 2022].
Mocenco, D. (2015). (PDF) Management strategies in the aerospace industry. Particular case: The Boeing Company. [online] ResearchGate. Available at: https://www.researchgate.net/publication/276841805_Management_strategies_in_the_aerospace_industry_
Particular_case_The_Boeing_Company [Accessed 23 Mar. 2022].
Naimzade, K. (2018). (PDF) Case study: The Boeing company strategic analysis. [online] ResearchGate. Available at: https://www.researchgate.net/publication/333417295_Case_study_The_Boeing_company_strategic_analysis [Accessed 23 Mar. 2022].
Sarayreh, B., Khudair, H., Jordan, A. and AlabedBarakat, E. (2013). Comparative Study: The Kurt Lewin of Change Management. [online] Strategic management assignmentInternational Journal of Computer and Information Technology, pp.2279-0764. Available at: https://ijcit.com/archives/volume2/issue4/Paper020413.pdf [Accessed 23 Mar. 2022].
Sarin, A. (2018). Strategic Consumer Approach Towards Boeing 737 Max Planes. [online] Available at: https://www.ijstr.org/final-print/jan2020/Strategic-Consumer-Approach-Towards-Boeing-737-Max-Planes.pdf [Accessed 23 Mar. 2022].
Schmuck, R. (2021). Global supply chain quality integration strategies and the case of the Boeing 787 Dreamliner development. Procedia Manufacturing, [online] 54, pp.88–94. Available at: https://www.sciencedirect.com/science/article/pii/S2351978921001487 [Accessed 23 Mar. 2022].
Sundaram, N. and Grantham, B. (2020). RIVALRY AMONGST TOP-FIVE MAJOR AIRLINES IN THE U.S. MARKET. [online]
Granthaalayahpublication.org. Available at: https://www.granthaalayahpublication.org/journals-html-galley/13_IJRG20_B07_3548.html [Accessed 23 Mar. 2022].
Warnock Smith, D., Tiernan, S., Rhoades, D., Slattery, J.S. and O’Connell, J.F. (2016). Strategy and competitive rivalry in the original equipment manufacturer single aisle market. International Journal of Aviation Management, [online] 3(4), p.234. Available at: https://www.researchgate.net/publication/321093437_Strategy_and_competitive_rivalry_in_the_original_equipment_manufacturer_single_aisle_market [Accessed 23 Mar. 2022].
Woo, A., Park, B., Sung, H., Yong, H., Chae, J. and Choi, S. (2021). An Analysis of the Competitive Actions of Boeing and Airbus in the Aerospace Industry Based on the Competitive Dynamics Model. Journal of Open Innovation: Technology, Market, and Complexity, 7(3), p.192.
