Boeing 787: The Dreamliner
Analysis of Boeing 787: The Dreamliner
Boeing announced the launch of a new jetliner called the Dreamliner (Boeing 787) and hoped to regain its leadership role in the commercial airline industry. I will apply the theories of competitive forces model and the macro-environment to analyze the Boeing case in the following exploration, and then give my suggestions.
According to the competitive force model, the first point of the risk of entry by potential competitors is neither high nor low because a new company produces on a small scale even can’t cover the multiple-billions R&D, and Boeing already have accumulated experience, patents, or trade secrets that they are more effective than new companies (Hill & Jones, 2012); while the new“global systems integrator” strategy tends to create potential competitors such as China and Japan. Secondly, the commercial airline industry is a consolidated industry that the launch of A380 from Airbus directly affect the market share of Boeing in 2003, and the fixed costs in this industry is very high; thus, the rivalry among established companies is intensive. Thirdly, A380, A350 etc. are the substitutes with similar basic needs, which are threats to Boeing 787 and leads to the operation risk.
On the macro-environment, the economy of developing countries grows very fast that both Boeing and Airbus believed “the passenger traffic in China would surge over 8.0% annually” (Nolan & Kotha, 2005), which tends to ease competitive pressures within an industry; it also viewed as an opportunity. On the global market, Boeing is facing opportunities and meanwhile threats. Boeing’s global partners supply about 70% of the plane’s structures, and the shipping only takes one day and the final assembly only takes three days, which tend to be more efficient in both time and cost for Boeing. However, Boeing was giving up its unique position of superior knowledge on building a commercial aircraft, which may create new competitors one day. The
Boeing announced the launch of a new jetliner called the Dreamliner (Boeing 787) and hoped to regain its leadership role in the commercial airline industry. I will apply the theories of competitive forces model and the macro-environment to analyze the Boeing case in the following exploration, and then give my suggestions.
According to the competitive force model, the first point of the risk of entry by potential competitors is neither high nor low because a new company produces on a small scale even can’t cover the multiple-billions R&D, and Boeing already have accumulated experience, patents, or trade secrets that they are more effective than new companies (Hill & Jones, 2012); while the new“global systems integrator” strategy tends to create potential competitors such as China and Japan. Secondly, the commercial airline industry is a consolidated industry that the launch of A380 from Airbus directly affect the market share of Boeing in 2003, and the fixed costs in this industry is very high; thus, the rivalry among established companies is intensive. Thirdly, A380, A350 etc. are the substitutes with similar basic needs, which are threats to Boeing 787 and leads to the operation risk.
On the macro-environment, the economy of developing countries grows very fast that both Boeing and Airbus believed “the passenger traffic in China would surge over 8.0% annually” (Nolan & Kotha, 2005), which tends to ease competitive pressures within an industry; it also viewed as an opportunity. On the global market, Boeing is facing opportunities and meanwhile threats. Boeing’s global partners supply about 70% of the plane’s structures, and the shipping only takes one day and the final assembly only takes three days, which tend to be more efficient in both time and cost for Boeing. However, Boeing was giving up its unique position of superior knowledge on building a commercial aircraft, which may create new competitors one day. The