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Boeing
Presented by:
Group E
QUESTION 1
What are the drivers of value creation and
value capture in the industry?
Value Creation
• Innovation
– Had to balance innovation with homogeneity
• Customer Relations
– Dedicated teams for airline accounts
• Alliances
– Alliance with Japanese manufacturers
– Alliance between the players for VLCT
• Technology
– Driven by technology
• Fuel efficiency
• Greater capacity
• Direct Operating Cost
Porter’s 5 Forces Analysis
Bargaining Power of Suppliers
• Large Number of Suppliers
• Large investment made by suppliers in
developing manufacturing technologies
• Long term relationships with the suppliers
• LOW
Bargaining power of Buyers
• More than 450 airlines and operators
• Discounts for large orders
• High investment for the research & design
• MEDIUM
Threat of New Entrants
• High switching costs
• High Research & Development cost
• High initial investment
• Govt. subsidies (Airbus)
• VERY LOW
Threat of Substitutes
• Other modes of transport
• Tele-conferencing
• HIGH
Rivalry Amongst the Players
• Struggle for market
• Red ocean
– United Airlines
• Break-even sales requirement is high
• Orders are usually bulk orders
• HIGH
QUESTION 2
As of 1992, who is doing better- Boeing or
Airbus? Explain why?
Comparison Between Boeing &
Airbus
BOEING AIRBUS