Boeing Company Analysis

Boeing Company Analysis The general external environment consists of six factors (see Exhibit 1) in assessing how a firm operates. These are the industry trends that cause Boeing to make strategic decisions that have an impact on their business. Some examples of the current external environmental factors affecting companies in the Aerospace and defense industry are discussed as follows. The economic factor consists of issues involving the current recession. During a recession the amount of leisure, optional and business travel decreases significantly. This affects the airlines and ultimately affects Boeing. It affects Boeing because if the airlines are not able to make a profit then they hold off or cancel plane orders. The Socio-cultural trend right now is geared towards being environmentally friendly. Many industries including the aerospace and defense industry is looking for ways to not emit gas or other pollutions to preserve the environment. In fact, Boeing has been working on their latest commercial plane the 787 dream liner. It is said to be â€Å"the most fuel efficient and world’s first commercial plane made with composite materials†. (Wikipedia 2010) The technological factor addresses concerns with being able to innovate using the best technology found through advanced research and development. Currently, Boeing is looking for technological changes to create a competitive edge for their newest project, the 787 dream liner, to outperform their leading competitor, Airbus. Legal and Political factors being discussed is Boeing not being able to sell to all countries and the possibility of some of the U.S. military programs being cancelled. â€Å"Boeing is looking to sell aircraft to Taiwan and china does not like the idea of this happening since they are the largest stakeholder to both the United States and Boeing (Cohan 2010)†. Recently U.S. defense secretary Robert Gates announced that â€Å"the U.S. is proposing to revise spending on military equipmentà ¢â‚¬  (Shalal-Esa 2010). The demographic trends coincide with the technology factor because buying patterns of travelers establish the need for these technological changes in the industry. Customers that spend money for the first class amenities or that rather purchase a plane ticket with an airline that offers more, are the reason why airlines request these changes from Boeing. Also, Boeing has very demanding customers. The airlines are the customers in Boeing’s industry and if they do not get what they ask for they look elsewhere to satisfy those needs. Firms need to ensure that they adjust to these trends before the change occurs. Failing to react in time and ignoring these factors could cause a firm to lose out to other firms that have already adjusted. Understanding and achieving success in the external environment will definitely make Boeing an idolized corporate leader among their customers and other competitors. The aerospace and defense industry is the major industr y Boeing is apart of. In this industry there are many changes in how it operates. The consumers who Boeing and the industry are trying to sell to are the large airlines who are still trying to recover from the 9/11 attacks and a slumping economy. You have to be able sell planes as cheap as possible without sacrificing quality and keeping costs low. The current industry dynamics are addressed in the general external factors above. All of these are a concern for the industry and some companies are adjusting to these changes and some are not. If a company does not make the necessary changes and ignore these new trends then they may find themselves not being able to attain profitable returns. Those firms who do make changes will have a competitive advantage and will be profitable, compared to their competitors.