Read the \"Boeing\" case study at the end of chapter 5 in the textbook. Create a

Question

Read the "Boeing" case study at the end of chapter 5 in the textbook. Create a PowerPoint presentation of 10-15 slides (including title and reference slides) that teaches one or more of the diagnostic models from chapter 5 to a group of students. Select one or more of the diagnostic models that you believe provides a framework for identifying the key factors in the Boeing case. Using the speaking notes area where appropriate, address these specific points: Describe the advantages of using a diagnostic model. Explain why the chosen model is appropriate for this case. Assess the organization’s readiness for change. Recommend three “next steps” for Boeing leadership. Use the speaking notes area, where appropriate, to ensure that you address all aspects of the assignment. Grading will be based on content, support for the change model selected, persuasiveness of argument, grammar, word-use and spelling, and visual appearance. While APA style format is not required for the body of this assignment, solid academic writing is expected and in-text citations and references should be presented using APA documentation guidelines, which can be found in the APA Style Guide, located in the Student Success Center.

The long list of Boeing’s woes seems to have reached its pinnacle in late 2003 with the scandal surrounding the Pentagon deal that alleged inap-propriate behavior and the loss of documents by Boeing officials. After his seven-year reign at the head of the organization, December 2003 saw the eventual resignation of Phil Condit. Many breathed a sigh of relief at the news. The problems at Boe-ing were reportedly endless. From a stock price that had decreased by 6.5 percent while the company was under his leadership to increasing competitive pressures, the future for Boeing was in doubt and changes were needed. For many years Boeing graced American corpo-rate news for their prowess as the leading manufac-turer of aircraft. However, in 1994 Airbus—their main rival—booked more orders. This shocked the man-agement executives and began a series of changes that were implemented to overcome the bureau-cratic structure, outdated technological systems, and unnecessary processes in a company that had report-edly changed little since World War II. THE BEGINNING OF CHANGE AT BOEING In 1997 market demand increased dramatically and Boeing attempted to meet this surplus of orders by doubling their production capabilities instanta-neously. A manufacturing crisis ensued and Boeing’s reputation took a dramatic turn for the worse when they were required to halt production of the 747 aircraft for 20 days. The company had “stubbed its toe,” according to the then-president of the Com-mercial Airplane Group, Ron Woodward, who was dismissed not long after the crisis. The “win at all costs” approach that Boeing supposedly had to its business dealings and a lack of communication within the organization appeared to have been the source of this problem. After experiencing these manufacturing diffi-culties, an attempt was made to revitalize Boeing’s operations by streamlining aircraft assembly and increasing the efficiency of the company. This was to be done by focusing on production and costs, not on “airy vision statements.” 43 Their overall strategy was to update their technology systems, downsize their operations, and reestablish relationships with their suppliers—the only feasible way costs could be cut. Perhaps the first step in recognizing that the cycle of demand for their products caused massive fluctuations in revenue each year and the com-pany needed more stability occurred when Boeing acquired McDonnell Douglas in 1997 to increase its defense contracts. This merger, however, brought with it difficulties in the way of cultural synthesis. McDonnell Douglas had a very strong culture that focused on their dealings with government offi-cials for defense contracts. Combined with Boeing’s family-orientated culture, the merger was not with-out integration issues. The merger also had financial implications when investors accused the organization of trickery in regard to the merger with McDonnell Douglas and a payout of $92.5 million was made to shareholders. WHEN TECHNOLOGY BECAME AN ISSUE In 2001 Boeing adopted the principles of lean manufacturing and aimed to rejuvenate their repu-tation by making their production more efficient. The object of the project was to implement an auto-mated system of assembly lines. They also hoped to coordinate and facilitate easier channels of commu-nication between Boeing staff and suppliers. They implemented a Web-based procurement system that allowed suppliers to monitor stock levels and replenish supplies when they dipped below a prede-termined minimum. The process of automating the production line was a struggle for Boeing. Information technology within the organization was decentralized and over 400 systems were being used to meet the needs of various departments. The lack of collaboration in regard to product procurement meant that the same product could be manufactured by Boeing for one aircraft but subcontracted for another. Boeing had recently chosen to implement a technological platform to regulate product life cycles. This was hoped to cut costs and facilitate the more rapid production of the 7E7. It would do this by stan-dardizing the “use of specifications, engineering rules, operational parameters and simulation results across its extended enterprise.” 44 It was hoped that this new system would “improve collaboration, innovation, product quality, time-to-market and return-on-investment.” 45 Confirming Pages154 Chapter 5 Diagnosis for Change THE CULTURAL IMPLICATIONSOF DIVERSIFICATION The decision was made to diversify from the tra-ditional commercial airline industry and the many acquisitions that were made created integration issues for the company. The aim again was to add more stability to the business by diversifying into information services and the space industry—providing services with elevated margins that would reflect on Boeing’s bottom line. Condit later admitted that entry into the space industry was an erroneous move. According to the CEO of Airbus, Noel Forgeard, the process of diversification was “extremely demoralizing for Boeing employees,” but Boeing’s vice president of marketing, Randy Baseler, claimed that “what affects morale right now is that we are in a down cycle.” 46 Regardless of the reasoning behind it, Boeing’s employee morale was at a low and this issue needed to be addressed. According to a BusinessWeek reporter, Boeing was in dire need of “a strong board and a rejuve-nated corporate culture based on innovation and competitiveness, not crony capitalism.” 47 Boeing’s past had left its culture in pieces. After the merger with McDonnell Douglas and many other organiza-tions, the decision was made in 2001 to move the headquarters of their operations from their histori-cal home in Seattle to Chicago. The relocation was said to be the factor that most significantly disturbed the culture of Boeing. The move was instigated to provide a neutral location for the diversified Boeing. Having acquired many different organizations, the past connections to the Seattle site were to be sev-ered. The strategic reason for this move was to help refocus attention on international growth prospects. Harry Stonecipher, the past head of McDon-nell Douglas who had come in as the new chief operating officer of Boeing after the company was acquired, was announced as the new CEO after Condit’s resignation. His first important decision was regarding the new 7E7 planes, which would be Boeing’s first new plane in a decade. On December 16, 2003, Stonecipher announced that Boeing was to go ahead with the production of the 7E7 jets. Stonecipher promised to work closely with unions to see that the low morale is reversed and that the planes are produced at a quicker pace and for less money. Despite Stonecipher’s best efforts, critics are calling for an outside leader to come in and take Boeing back to basics. A researcher of a shareholding firm claimed that Boeing’s problems lay in the fact that they had “overpromised and underdelivered.” 48 The past has shown that Boeing’s inability to react to exter-nal pressures has increased their demise. The future of the industry will now depend on the ability of either Airbus or Boeing to predict the way the mar-ket will go. Boeing has bet its future on the mar-ket developing a partiality for smaller aircraft, like their new 7E7. Airbus, on the other hand, projects that the airlines will purchase larger aircrafts in the future. Questions 1. Select one or more diagnostic models that you believe provide a framework that succinctly iden-tifies the key factors at the center of the Boeing situation. Explain your choice of model. 2. Explain the Boeing situation in terms of your selected model. Note: In answering these questions, it may be of interest to know that Boeing did turn things around. Fast forward to 2007 and we find that the last few years have been good for Boeing. Its 7E7 is the fastest-selling new aircraft ever and is sold out for years into the future. Boeing addressed many of its issues and its performance has benefited. Airbus, on the other hand, has suffered continuing delays with its giant A380. pal04993_ch05_121-158.indd 1541/21/08 10:55:07 AM

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I need the email id so that i can send the slide. or else do by using below the data

The BOEING Company
Overview
Founded in 1916 in the Puget Sound region of Washington state
Became a leading producer of military and commercial aircraft
Customers and customer support in 150 countries
Total revenue in 2010: $64.3 billion
70 percent of commercial airplane revenue historically from customers outside the United States
More than 165,000 Boeing employees in 50 states and 70 countries

Business Overview
Design, assemble and support commercial jetliners
Boeing 7-series family of airplanes lead the industry
Commercial Aviation Services (CAS) offers broad range of services to passenger and freight carriers
Design, assemble and support defense systems
World’s largest designer and manufacturer of military transports, tankers, fighters and helicopters
Support Systems provides services to government customers worldwide
Design and assemble satellites and launch vehicles
World’s largest provider of commercial and military satellites; largest NASA contractor
Integrate large-scale systems; develop networking technology and network-centric solutions
Provide financing solutions focused on customer requirements
Develop advanced systems and technology to meet future customer needs

Revenue breakdown 2010
Boeing Commercial Airplanes
Offering a family of airplanes and a broad portfolio of aviation services for passenger and cargo carriers worldwide
Boeing airplanes represent three quarters of the world’s fleet, with nearly 12,000 jetliners in service
Approximately 70 percent of Boeing commercial airplane sales (by value) go to customers outside of the United States
2010 revenues of $31.8 billion
In 2010, the company delivered 462 airplanes, including 376 Boeing 737s
Boeing 787-8 and 747-8 completed fight testing activities and achieved FAA certification in 3rd quarter of 2011

Boeing Defense, Space & Security
Involve research, development, production, modification and support of global strike systems, global mobility systems, rotorcraft systems, airborne surveillance and reconnaissance aircraft, network and tactical systems, intelligence and security systems, missile defense systems, and space and intelligence systems
Boeing Military Aircraft
Network & Space systems
Global services & support
2010 revenues of $31.9 billion
In 2010, delivered 115 new and 66 remanufactured aircrafts, more than 10,000 precision-guided weapons systems, two launch vehicles, and 4 satellites.

Boeing Capital Corporation
Financing subsidiary of The Boeing Company
Focused on assets that are critical to the core operations of Boeing customers
Arranging and/or providing financing for customers of Boeing products
Midyear 2011 portfolio valued at approximately $4.5 billion

SWOT ANALYSIS
Historical stock performance
Industry Analysis
Global Civil Aerospace Products Manufacturing
Products and Services

Global Civil Aerospace Products Manufacturing
Supply Side Analysis: Major Players
Boeing and Airbus are the only two players in the large commercial aircraft market
Canadian-based Bombardier and Brazilian aircraft manufacturer Embraer are the industry leaders in the regional and business airplanes market
Market Concentration: Top 4 companies account for 70% of Market shares

Global Civil Aerospace Products Manufacturing
Commercial Aircraft Demand Determinant:
Major airlines are the largest customers for civil aerospace product manufactures. (78.5% Market Shares) Their demand is driven by the need and desire for airlines to expand their fleet or replace ageing models

Product Innovation:
Fuel efficiency
Lower maintenance & operating cost

Timing
The average LCA has a life of about 30 years. Therefore, when the time comes to replace these older models, demand for aircraft increases.
Market Drivers
Total Immigration
The level of immigration in the world may boost the demand for air travel.
The fastest growing regions will be in Asia, where economic growth and infrastructure improvements will lead to a rapid rise in passenger numbers. Boeing expects that passenger numbers will increase globally at 5.0% per annum over the next 20 years
World GDP
The industry is in the mature stage of its Life Cycle. The historical industry annual growth is in line with global real GDP growth. (1.9% in the past 5 yrs.)
Price of Crude Oil
High crude oil prices will increase the operating cost of air carriers and aircraft owners, which will deter them from acquiring new aircraft.

Industry Outlook
Industry revenue will rise at an average annualized rate of 2.7% over the five years through 2016 to reach $161.6 billion.
Although Boeing significantly lowered its forecasts for global aircraft deliveries over the next two years, it still predicts strong growth in China. Boeing forecasts total volume growth for Chinese air transport over the next two decades of about 7.2% per year

Industry Analysis
Global Military Aerospace Products Manufacturing

Products and Services
Aircraft manufacturing (52.5% of Revenue): bombers, fighters, tankers, cargo aircraft, trainers and rotary aircraft
Engines (17.9% of Revenue): provides the engines and parts for aircraft and spacecraft.
Guided missiles and space vehicles (12.5% of Revenue)
Other parts and auxiliary equipment (17.1% of Revenue)

Geographic Spread
US Military: 40% of Revenue
Other world Military: 60% of Revenue
Global Military Aerospace Products Manufacturing
Supply Side Analysis: Major Players
Lockheed Martin Corporation is the largest player in this market, followed by Boeing and United Technologies Corporations
All top 4 major players are US companies

Global Military Aerospace Products Manufacturing
Demand Side Analysis
The market is dominated by a few buyers, US Department of Defense is the largest customers in this industry and accounts for 40% of worldwide purchase.
According to Boeing 2010 Annual Report, 82% of Boeing Defense, Space & Security (BDS) business revenue comes from US Department of Defense
Due to national security concern and wars outside US, US defense budget has been increasing in the past 5 years. However, The US Super Committee on Spending Cut failed to report a plan to cut $1.2tn from the nation’s deficit last Wednesday. which triggers automatic cuts to defense and social welfare programs starting in 2013. The largest defense cut would be $600 billion in the next decade.
Industry Outlook
Although US Military products are popular in the international market for its advanced technology, regulations that restrict the sale of new technological equipment to other countries (even to allied nations) limit an export increase to international market.

So we expect a slow growth in industry revenue worldwide and a negative growth in the Industry Revenue in US.

Industry Competition Analysis
Main Competitors
Commercial Airplanes: Airbus, Embraer and Bombardier
Military Aircrafts (BDS): Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Company and General Dynamics Corporation

Porter Five Force Analysis

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.
Orders & Deliveries
Order Comparison
Orders of Boeing and Airbus follow almost the same growth pattern for the recent 20 years, reflecting extremely high level of competition and lobbying efforts.
Delivery Comparison
Products Outline

Airbus A320 vs Boeing 737
Airbus A330 vs Boeing 767 & 777
Airbus A350 vs Boeing 787 Dreamliner & 777
Airbus A380 vs Boeing 747
Both companies compete against each other at every product level

Range Overlap
Though both companies have a broad product range varying from single-aisle to wide-body, they do not always compete head-to-head. As listed below they respond with slightly different models.
The Airbus A380, for example, is substantially larger than the Boeing 747.
The Airbus A350 competes with the high end of the Boeing 787 Dreamliner and the Boeing 777.
The Airbus A320 is larger than the Boeing 737-700 but smaller than the 737-800.
The Airbus A321 is larger than the Boeing 737-900 but smaller than the previous Boeing 757-200.
The Airbus A330-200 competes with the smaller Boeing 767-300ER.
Airline companies benefit from this competition as they get an array of diversified products ranging from 100-500 seats, than if both companies offered identical aircraft.

Passengers vs Range
Competition by outsourcing
Because many of the world’s airlines are wholly or partially government owned, aircraft procurement decisions are often taken according to political and commercial criteria. Boeing and Airbus seek to exploit this by subcontracting production of aircraft components or assemblies to manufacturers in countries of strategic importance in order to gain a competitive advantage.
For example, Boeing has offered longstanding relationships with Japanese suppliers including Mitsubishi Heavy Industries and Kawasaki Heavy Industries , a process which helped Boeing achieve almost total dominance of the Japanese market for commercial jets.
Partly because of its origins as a consortium of European companies, Airbus has had fewer opportunities to outsource significant parts of its production beyond its own European plants.
Effect of currency on competition
Competition in Defense Industry
While actively competing with Airbus in commercial aviation, Boeing also faces fierce competition with major rivalries such as Lockheed Martin, Honeywell, Northrop Grumman, and General Dynamics in defense industry. Sales are split 50/50 between the airplane and defense segments.

Debt

From Annual Report 2010, Page 83
Projections Reasoning
At Boeing Defense, Space & Security, while global security threats remain high, we foresee an extended period of flat to declining defense budgets both in the United States and Europe.
Our 20-year forecast is for a long-term average growth rate of 5% per year for passenger and cargo traffic based on a projected average annual worldwide real economic growth rate of 3%.
GS&s was awarded modernization and upgrade contracts from US Air force

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