Case Study “Philip Condit and the Boeing 777: from Design and Development to Production and Sales”

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Case Study

“Philip Condit and the Boeing 777: From Design and Development to Production and Sales”

12/13/2010
Contents:

1.Executive summary3

2.Problem statement4

3.Data analysis4

4.Key Decision Criteria5

5.Alternatives Analysis6

6.Recommendations7

7.Action and Implementation Plan7

8.Conclusion9

Executive summary

The case study „Philip Condit and the Boeing 777: From Design and Development to Production and Sales“ deals with the launch and development key points of the Boeing 777 model in the 90s.

Generally, the aircraft industry is described as a very risky one as failure is the norm due to high product development costs. Furthermore it consists of a rival duopoly of the survival jet makers Boeing and Airbus.

The Boeing company’s history of producing jets can be split into two eras. In the 1920s, 1930s and during Worlds War II., it was a military contractor producing bombers and fight aircraft. Later on, in the 1950, Boeing became the world‘ s largest manufacturer of commercial aircraft. Their first jet was the 707 model. Although Boeing was very successful, Airbus remained a serious rival.

In 1988, Boeing planned to upgrade the 767 model in order to meet the level of Airbus‘ competition which launched two new models. As Boeing had no 300-seat jetlines, nor plans to develop such a jet, the Executive Vice President Philip Condit proposed to design a 767 double-decker jet. To explore the risks, he tried to find out if the customers were interested in such a launch. But United Airlines rejected the idea of a 767 double-decker, as it had no chance against Airbus‘ new model transports. Instead, Condit was won over to develop a completely new commercial Boeing jet which would be called the 777 project.

One of the main characteristics of the Boeing 777 jet was that it was a consumer driven product. In order to decrease the risk of developing the new jet, Boeing approved the project only until it obtained 68 firm orders of the 777 jet by the carrier United Airlines. Only then Boeing commited to the 777 program and the directors approved the close cooperation of the two companies. For the design and development phase Boeing introduced the „Working Together“ with eight more carriers.

Furthermore Boeing 777 was a globally manufactured product, for which 12 international companies were contracted.

Boeing split the risk of the new product on a family of planes consisting of different planes build around a basic 777 model. By that, the design included a maximum flexibility for future changes of the model according to customer preferences.

Besides these facts, the 777 project delivered the first jetliner designed entirely by computers. Instead of old-fashioned two-dimensional methods, the sophisticated computer program „Catia“ (computer aided three-dimensional interactive application) had been used. Furthermore, all team members were connected according to Catia, which made them be cross-functional.

During the 777 project, Boeing implemented a new company culture, where assembly line workers were empowered and encouraged to offer suggestions and participate in the desicion making. Managers also payed attention to problems faced by their workers, such as safety concerns, childcare, etc.

The Leadership and Management style changed from a secretive one to open communication among employees; from an individualistic mentality to teamwork.

In the 1990 the new 777 aircraft program had been launched and in 1995 the first jet had been delivered, while in 2001 the 777s were flying in the service of major U.S. and international airlines. Although Boeing produced the most successful commercial jetliner, it was a risky project and its process contained unresolved problems.

Problem statement

The main concern of Boeing was its insufficiency to reach the competitive level of its only rival, Airbus. While Boeing had no plans to even develop a 300-seat...
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