Financial Management
St. Paul College of Ilocos Sur
(Member, St. Paul University System)
2726 Bayubay, San Vicente, Ilocos Sur
DEPARTMENT OF BUSINESS EDUCATION (DBE)
CASE STUDY
Title: THE BOEING 777
Submitted By:
Sheila Mae Gacosta
Kimberly Anne Ritua
Edlen Abo
Submitted to:
Gladys B. Solomon, MBA
“ The mystery behind thus business isn’t building an airplane that flies and is safe. It’s building an airplane that is salable and profitable.”
- Wolfgang Demisch
The Boeing 777: A Financial Analysis of New Product Launch
I. Case Summary:
The Boeing Company is an Industrial Aircraft Design and Manufacturing Firm, diversified in its offering of products for both the Defense Industry and the Commercial Airline Industry. In October 1990, CEO Frank Shrontz has announced the launch of a new product, the Boeing 777. A medium-to-large passenger aircraft, the 777 would enable the flexibility to carry passenger loads ranging from 350-390 passengers, over distances up to 7600 nautical miles. Already, Boeing has received orders from United Airlines, with delivery expected in May 1995 (p. 198). Aside from the technological advances represented in the 777, the launch of this new product promises some potential distinct strategic advantages. The launch of the 777 would provide a medium-to-large aircraft, filling a gap in Boeing’s total passenger aircraft product line. Boeing would now have a complete suite of aircrafts capable of addressing passenger loads ranging from 100-500. The 777 is specifically targeted to service routes in a high growth segment of the market, influenced heavily specifically by the high growth rate of the Asian market. The following is a financial analysis of the anticipated launch of the 777 product line. The analysis includes a comprehensive quantitative financial analysis of the projects profitability along with a qualitative analysis of the strategic
(Member, St. Paul University System)
2726 Bayubay, San Vicente, Ilocos Sur
DEPARTMENT OF BUSINESS EDUCATION (DBE)
CASE STUDY
Title: THE BOEING 777
Submitted By:
Sheila Mae Gacosta
Kimberly Anne Ritua
Edlen Abo
Submitted to:
Gladys B. Solomon, MBA
“ The mystery behind thus business isn’t building an airplane that flies and is safe. It’s building an airplane that is salable and profitable.”
- Wolfgang Demisch
The Boeing 777: A Financial Analysis of New Product Launch
I. Case Summary:
The Boeing Company is an Industrial Aircraft Design and Manufacturing Firm, diversified in its offering of products for both the Defense Industry and the Commercial Airline Industry. In October 1990, CEO Frank Shrontz has announced the launch of a new product, the Boeing 777. A medium-to-large passenger aircraft, the 777 would enable the flexibility to carry passenger loads ranging from 350-390 passengers, over distances up to 7600 nautical miles. Already, Boeing has received orders from United Airlines, with delivery expected in May 1995 (p. 198). Aside from the technological advances represented in the 777, the launch of this new product promises some potential distinct strategic advantages. The launch of the 777 would provide a medium-to-large aircraft, filling a gap in Boeing’s total passenger aircraft product line. Boeing would now have a complete suite of aircrafts capable of addressing passenger loads ranging from 100-500. The 777 is specifically targeted to service routes in a high growth segment of the market, influenced heavily specifically by the high growth rate of the Asian market. The following is a financial analysis of the anticipated launch of the 777 product line. The analysis includes a comprehensive quantitative financial analysis of the projects profitability along with a qualitative analysis of the strategic