Boeing Internal Analysis

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Boeing Internal Analysis

Purpose

This report discussed the components of internal analysis, competitive advantage, and strategic competitiveness of Boeing Company. This is done by analyzing the tangible & intangible resources, capabilities, and core competencies in order to clarify Boeing’s strengths and weaknesses.

Resources

Exhibit 1
Tangible| Intangible|
Manufacturing plants| Boeing’s digital design software| Composite and metal materials| Dynamic assembly line|
Headquarters building| “Moonshine teams” strategy|
Machinery used for lean production| Boeing’s brand name| Financing/ Launch aid from NASA | |

Boeing’s newest jet, the 787, is made out of composite plastics and carbon fiber in order to be more efficient and comfortable. The new materials allow the plane to be pressurized at a lower elevation, which results in less jet lag. Also, the cabin humidity can be raised to around 20% because these materials do not corrode like metals. Through the use of lean productions, Boeing significantly reduced the cost of machinery used for manufacturing, along with inventory costs.

For financial resources, Boeing received $12 billion from NASA to develop technology. They also received $1 billion in loans from Mitsubishi, Kawasaki, and Fuji for the development of the 787. Furthermore, Boeing had received launch aid from U.S. Government subsidies.

Boeing has a reputation as one of the best manufacturers of commercial and military jets. Its strong brand and name represents the position in the aerospace industry. Boeing has encountered some scandals in upper management, however they are trying to restructure its reputation and make a comeback.

Capabilities

Exhibit 2
Capability| Valuable| Rare| Costly to imitate| Non-substitutable| Dynamic Assembly| Yes| Yes| Yes| Yes|
Lean Production| Yes| Yes| Yes| Yes|
Composite Materials| Yes| Yes| Yes| Yes|

Lean production at Boeing was a very important and effective decision. They were able to design equipment that cost amazingly less and was much more efficient than the machines they were using at the time. A router was built for 0.2% cost of their larger one and a drill machine was built for 5% cost of the previous model. They used a hay loader to put the seats into the planes, rather than using a crane, which reduced production time from twelve hours down to only two hours. Production of landing gear components took 32 moves over 10 months, but with the lean production strategy it only took 3 moves and the time span was reduced to 25 days. Dynamic assembly was an important change at Boeing as well. Before, planes had to be jacked into position at one station, worked on, down-jacked from the station, and moved with a power cart to the next station. This process could take up to two, ten hour shifts. By using a sled that drags the plane two inches per minute, Boeing reduced production time in half.

Core Competencies

One of Boeing’s core competencies would be utilizing composite plastics in the manufacturing of their jets. This is valuable because it allows them to build a jet that can travel faster, farther, and with more comfort than on previous jets. It can be considered costly to imitate because when Airbus built a model to compete, the A350, its performance was unable to compare to that of Boeing’s 787. The composite materials are non-substitutable because it is currently the highest grade technology jet manufacturing industry. It is rare because only Boeing and Airbus are in the commercial jet industry, and Airbus’s model cannot compare.

Another core competency would be Boeing’s ability to use lean production. This is valuable because it allowed Boeing to free up 1.3 million square feet of space and sell seven buildings by switching to a “just-in-time” inventory. Also, they were able to reduce costs of equipment and speed up the manufacturing process drastically. It is socially complex because it...
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