1. Boeing Commercial
Aircraft : Comeback ?
Presented by- Amit Barman
Debasish Patra
Devkumar Mukherjee
Kaushik Samanta
Sougata Mitra

2. ORDER PLACEDBY BOEING & AIRBUS
ORDER PLACED BY BOIENG VS AIRBUS
1200
1000
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0
1990
1989
1991
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BOEING AIRBUS

3. COMPANY PROFILE
• Found in the year 1916 in the Puget Sound region of Washington
state.
• Market leader in the industry of military and commercial aircraft
manufacturing.
• Customer base and support in 150 countries.
• Employee strength of 165000 around the globe
• More than 12000 commercial jetliner engaged in aviations services.
• The commercial jetliner (SBU) total revenue earned during the
period in 2011 stands at 36.5 bn USD.

4. TIMELINE
• William Boeing establish Boeing Company.
1916
• 1950- Strategic move to enter commercial airlines as passenger plane –
known as the Dash 80
• Boeing decided to spend $16 million's to develop Dash 80 which accounted
1950 for 2/3 of the Company entire profit.
• Model 367-80 introduce
1954

5. TIMELINE
YEAR EVENTS
1957 Boeing 707 was the worlds first commercially successful passenger Jet
aircraft.
1959 model 720 successfully introduce.
1963 Model 727 introduce.
1967 Model 737 introduce.
1969 Model 747 introduce.
1970 Boeing Computer Service is formed.
1971 Boeing SUPERSONIC project is scrapped.
1972 Boeing become involved in Space Shuttle program & puts its mark on
satellites.
1983 Airbus starts giving competition to Boeing.
1994 Boeing 777, largest twinjet, takes off.
1995 Boeing gets involved in space station project.

6. TIMELINE
year EVENTS
1996 Boeing merges with Rockwell Aerospace and Defense unit, Renamed as
Boeing North American.
1997 McDonnell Corp & Boeing merge.
Boeing 777 sets a record for flying around the world in 41 hrs and 59
Min.
Rocket Dyne division of Boeing North American wins the first NASA
award for excellence
2000 -Boeing announced acquisition of Jeppesen Sanderson Inc. the world
leading provider of Flight Information Services for $1.5 bn cash.
-Receive and order of $ 10.4 Million contract to begin low rate initial
production for the US Navy.
2001 Headquarters is moved to Chicago.

7. Contd….
year EVENTS
2002 Boeing deliver 1000th 757
China airlines orders 10 Boeing 747
2002 Boeing named 13th largest corporate air polluter.
2003 Airbus bites more market share.

8. Commercial aircraft product line
Boeing 737 Boeing 777
Produced1968–present Produced1993–present
Number built7,251 as of July Number built1,030 as of July
2012 2012
Unit cost737-100: US$-32 Unit cost777-200ER:
million US$258.8 million
Boeing 747 Boeing 787
Produced1968–present Number built31
Number built1,435 as of April Program cost US$32 billion
2012 (Boeing's expenditure)
Unit cost747-100: Unit cost787:
US$24 million (1967) US$206.8 million (2012
Boeing 767 BBJ
Produced1981–present Produced1998–present
Number built1,030 as of July Number built159 - As of July
2012 28, 2010 (Including
Unit cost767-200ER: Unit cost US$ -47–310 million
US$160.2 million as of 2009

9. Duopoly
Boeing and Airbus compete in a near-duopoly in the global market for
large commercial jets comprising narrow-body aircrafts, wide-body
aircrafts and jumbo jets.
• Acquired former arch-rival, • Began as a consortium of
Mcdonnell Douglas, in 1997 aerospace manufacturers.
• The largest global aircraft • Subsidiary of European
manufacturer by revenue, orders Aeronautic Defense and Space
and deliveries. Company (EADS)

10. Products Outline
Airbus A320
Airbus A330
Boeing 737
Airbus A350
Boeing 767 & 777
Airbus A380
Boeing 787 Dreamliner & 777
Boeing 747
• Both companies compete against each other at every product level

11. Product Development Cost of Airbus & Boeing.
Category Airbus Development Boeing Development
Cost cost
Single Aisle A-319 757
Family Model
A-320 $2.5 bn 737- 200
A-321 767 $1.5 bn.
A-318 757-300
Wide Bodied A-350 767,747
Aircraft Model
A-330 $3.5 bn 777
A-340 $ 3.5 bn
Super Jet A-380 $15 Bn 787 $ 8 Bn

12. PORTER’S FIVE FORCES FOR
AIRLINE INDUSTRY
Threat of New Entrants- Low
Existing loyalty to major brands
Incentives for using a particular buyer (such as frequent shopper
programs)
High fixed costs in R & D
Scarcity of resources (technical )
High costs of switching companies (maintenance cost)
Government restrictions or legislation

13. Power of Suppliers- High
The airline supply business is mainly dominated by Boeing and Airbus.
For this reason, there isn't a lot of cutthroat competition among
suppliers.
Also, the likelihood of a supplier integrating vertically isn't very likely.
Power of Buyers- Low
There are high costs involved with switching airplanes, but also take a
look at the ability to compete on service.

14. Availability of Substitutes-Low
For regional airlines, the threat might be a little higher than
international carriers. When determining this you should consider
time, money, personal preference and convenience in the air travel
industry.
Competitive Rivalry. – High
Highly competitive industries generally earn low returns because the
cost of competition is high. This can spell disaster when times get
tough in the economy.

15. Future Trends Of Aviation Industry
Future trends and forces of Aviation industry depends upon
1. Hub and spoke vs. point to point model
2. Fuel cost
3. Strength of euro vs. dollar
4. Eco friendly operation.

16. Core Competency
• Proactive in meeting customer demand and needs.
• Customizing of aircraft and designing.
• Large-scale implementation system.
• Uniqueness in contract and agreement with both NASA
and United States Air Force.
• The power of vertical integration.

17. Boeing Entering Turbulent Times
 Uncertainty to words target market.
 Concern about Boeing corporate leadership.
 Lack of proper and ethical Management during the rein of Philip M
Condit.
 Labour discord(Frequent in sourcing, Transfer of labour to another
company at lower remuneration and benefit)
 Boeing sluggish response to competition to airbus
 Quality being a concern as most of the manufacturing unit are
outsource.

18. Comeback Strategy of Boeing
• Unique leadership style of Jim McNerney by
making innovation as a culture.
• Manufacturing of fuel efficient Airplanes in
contrast to the enhancement of fuel prices.
• Competitive advantage gained from the
ongoing management strife and other
problem in airbus.

19. Corporate Level Strategy
Strategic Decision Value addition and Business outcome
1. Investments in narrow bodied 757 and 1. Investments made from the positive
wide bodied 767. cash flows attained through breakeven of
their earlier models.
2. Subcontracting in case of Boeing 777( 2. Resulted in reduction of developmental
60% of the work) costs.
3. Merger between Boeing and 3. Resulting in increase of their presence
McDonnell Douglas in the defense and space side of
aerospace
4. Movement of corporate head quarter 4. signal to the investment community
from Seattle to Chicago. that Boeing was farmore than commercial
business

20. Corporate Level Strategy
Strategic Decision Value addition and Business outcome
5. Decision to produce new low cost, right 5. Resulting in increase in profit due to
sized aircrafts demand for nonstop point to point flight.
6. launch of 787 aircraft 6. stiff competition to Airbus A350 and
A380 aircrafts.

21. Business Level Strategy
Strategic Decision Value addition and Business outcome
1.Adoption of Lean Production and Six 1. Better Management of warehouses in
Sigma quality improvement process. terms of inventory, space and time as well
as capital, ultimately improving the value
chain.
2. Introduction of moving assembly lines. 2. Reaching of timeliness concepts by
tools being delivered directly on the shop
floor instead of fetching it.
3. Government subsidies 3. Boeing got subsidies from NASA to
develop technology which had helped
them in developing their commercial jet
aircraft.

22. Quality and Productivity Improvement
Through lean Progress
737 Lean Progress
 50% factory cycle time reduction.
 132% inventory turns increase.
 55% cost of quality reduction
 36% customer introduction hours reduction.
 41% covered floor space reduction.
777 Lean Progress
 14% Factory flow time reduction
 32% Inventory turns increase
 27% Engineering quality improvement
 7% Cost of quality reduction
 43% Factory footprint reduction

23. SWOT Analysis of Boeing
1. Management of supply process through 1.Constrains to reach break even point without
vertical integration. reaching the projected demand.
2.Degital technology used for assembling. 2. Complex assembly of aircraft.
3. Strong focus on R&D. 3. Higher R&D cost.
4. Enhancement of operational performance. 4. High volatility of customer
5. Delay in Commercial aircraft Development
Program.
SWOT
1. Good financial health of aviation industry 1.Increase of jet fuel prices.
and economy
2.Terrorist attack effecting the number of
2.Competative advantage of spoke and hub travelers travelling.
model increases demand
3. Suppliers falling behind schedule designing
3.Growth of transcontinental traffic. for projects.
4.Demand for more frequent nonstop flights. 4.Changing Govt. politics and business
partners based on those countries.

24. PORTER’S FIVE FORCES FOR BOEING
Factor High Moderate Low
New Entrant 
- Airbus
Threat from Substitute 
Bargaining power of Supplier 
-Vertical Integration
Bargaining power of buyer 
-Duopoly market
Rivalry 
-First mover advantage

25. Boeing Orders vs. Airbus
ORDER
1600
1400
1200
1000
800
600
400
200
0
1993
2010
1989
1990
1991
1992
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2011
2012
BOEING AIRBUS
Source: www.boeing.com
: www.airbus.com

26. Boeing delivers vs. Airbus
DELIVERY
700
600
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400
300
200
100
0
1994
2011
1989
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2008
2009
2010
BOEING AIRBUS
Source: www.boeing.com
www.airbus.com

27. 200
600
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0
1989
1990
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ORDER
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ORDER & DELIVERY
2002
DELIVERS 2003
2004
2005
2006
2007
Boeing Orders and delivers
2008
2009
2010
2011

28. Market Classification
Middle Oceania Others Africa
East 3% 1% 2%
Boeing Capital
Corporation 6%
1%
Europe
Canada 12%
1%
Boeing Commercial
Defense, & Airplanes
Security 49%
Asia US
50%
16% 59%

29. Ratio Analysis Of Boeing
3
2.5
2
1.5
1
0.5
0
2006 2005 2004 2003 2002
Dividend Payout Ratio 15.70% 14.47% 13.64% 14.29% 15.31%
DE Ratio 58.53% 42.71% 48.90% 62.47% 63.12%
ROE 15.89% 11.52% 8.41% 3.37% 2.48%
Quick Ratio 0.5 0.5 0.52 0.76 0.54
Current Ratio 0.77 0.78 0.72 1.05 0.85
Source: www.boeing.com

30. Study on the revenue on Boeing
66.4 68.3 68.7
70 64.3
61.5 60.9
58
60 53.8 53.6
51.1 50.3 52.5
50
40
30
20
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
revenue ( $ in billion)
Source: www.boeing.com

31. After the case Financial Status
Source: Zonebourse.com

32. After The Case Financial Status
Source: Zonebourse.com

33. THANK YOU