Boeing Case Study - Assignment Example

Case Studies Name Institution Date Table of Contents Table of Contents 2 Boeing Case Study 2 Question 1 2 Factors that led to the development of the sonic Cruiser 2 Question 2 3 Challenges in estimating the potential returns of the project 3 Question 3 4 Methods that would have been used to evaluate the project 4 Question 4 5 Was the development of Sonic Cruiser a mistake? 5 Genzyme Case Study 6 Question 1 6 Genzyme’s focus on orphan drug and the effects on the competitiveness in the market 6 Question 2 7 How the focus on orphan drug affects the resources and capabilities of a company 7 Question 3 7 The focus on orphan drugs by Genzyme 7 Question 4 8 Reasons for diversification in the areas of medicine 8 Question 5 9 Future recommendations for the company 9 References 11 Boeing Case Study Question 1 Factors that led to the development of the sonic Cruiser The market situation worsened after the September 11 attacks in the United States of America. This had a direct impact on the airline industry as the number of the passengers drastically reduced. It critically affected Boeing as the airline companies could not continue purchasing the aircrafts. There was need for the manufacturers to modify the speed and the capacity of the aircrafts for the purposes of accommodating the few number of passengers. This basically contributed to the development of Sonic Cruiser to address the needs of the airline companies. The development of the sonic Cruiser was also meant to enable Boeing to be the leader in the airline industry. There are a good number of advantages that the Sonic Cruiser would have over the other aircrafts operating at the same capacity. The reduction of the air traffic congestion was also an important issue that Boeing thought it will be able to address after the development of the Sonic Cruiser. This aircraft would also reduce the time taken by the passengers during the flight due to its high speed. The design of Sonic Cruiser was aimed changing the airline industry through the modern technology and innovative (Hepperle, 2002). Question 2 Challenges in estimating the potential returns of the project According to Ghemawat (2002), the fluctuation in the market and the economic difficulties was one of the main hurdles for the estimation of the returns of the project. The airline industry was undergoing a tough time due to the terrorist attacks. This meant that the number of passengers was reducing due to the fear of boarding airplanes. It was therefore difficult to estimate the potential of the investment due to the unpredictable situation in the market. It led to a direct impact on the company as most of the airline companies are the customers of Boeing. The fluctuation in the fuel price was also a hurdle for the company in the estimation of the returns of the project. The fuel prices were increasing and this had a direct impact on the airline companies which were determined to cut down on expenses. It was difficult to predict where the airline companies would purchase the Sonic Cruiser based on its fuel consumption. The fuel consumption had a direct impact on the purchase of the aircraft by the airline companies. The technological hurdle was also a challenge for the company in terms of estimating the potential returns of the project. This is because there was no metal manufactures with the current technologies required by the Sonic Cruiser. This had a direct impact on the cost of the project as the materials are required during the implementation of the project. On the other hand, passing on the new technology to the other employees would have been difficult for the company. This meant that the company would not benefit fully from the project. Question 3 Methods that would have been used to evaluate the project Boeing Company should have used a combination of methods to evaluate the project so as to come up with the best conclusion. The first method should have been evaluating the project based on the goals and objectives. The goals and objectives of developing the Sonic Cruise would have been a guiding factor for the project. The strategies that the company was planning to use to achieve the goals and objectives of the project are also important during the analysis according to Sinha et al (2011). The strategies determine how the company handles the expected challenges and the utilization of the available resources. Boeing should have therefore used this method to determine how to beat the challenges. The reaction and satisfaction of the customers is also important when evaluating the project. This is one of the methods that Boeing should have used to determine the whether the project would have been successful. This should have done through administering questionnaires to the potential customers before coming up with the final decision. The reaction of the customers determines the success of the project. The return on investment method that was used by the company was thus not sufficient to come up with the final conclusion. The combination of evaluation methods should have been used by Boeing. Question 4 Was the development of Sonic Cruiser a mistake? The development of the Sonic Cruiser was not a mistake. This is because it would have solved the challenges facing the airline industry which has affected the operations. The Sonic Cruiser would have solved the problem of air traffic congestion which is costly to most of the airline industries. On the other hand, the speed of traveling to various destinations would have been improved by the project. Although the industry was experiencing a lot of challenges at the time, the project could have benefited the industry and the company in future. The high initial costs of the project was a challenge but the long term benefits would have resulted to more profits for the company and hence the emergence as a market leader in the airline industry. The passengers who are the customers of the airline companies would have greatly benefited from this project. This is due to the reduction in time wastage during the point to point movement which is practiced by most of the airline companies. The intentions of the project were thus good and beneficial to the airline industry as it would have changed the customer experience (Loewe, 2007). However it is important to note that the timing of the project was wrong and hence the hurdles that forced the company to change its plans. Genzyme Case Study Question 1 Genzyme’s focus on orphan drug and the effects on the competitiveness in the market The focus of Genzyme on the orphan drug has some impacts on the degree of competition it faces in the industry. Competition in the biotech industry is usually high due to the number of companies manufacturing drugs. However, Genzyme has few competitors in the orphan drug manufacturing. This has reduced the competition that the company faces. However, some of the emerging companies in the orphan drugs are offering some competition to the company. The company had a competitive advantage during its initial stages due to the low number of competitors in the market. The minimum competition being faced by the company has also enabled it to perform highly and hence its rapid growth. The company therefore, has a competitive advantage over the other ordinary biotech companies due to its diverse nature and the minimum competition. The competitive advantage of a company is usually promoted by its uniqueness in the market. The minimum competition of the company also affects the bargaining power of the company. Since the company is the only manufacturer of some of the drugs, it has a high bargaining power over the customers. This is an advantage to the company as it increases its profits since it has the ability to determine the prices in the market. It is also important to note that the bargaining power of an organization plays an important role in the ability of the company to compete in the market. The uniqueness of the company has thus played an important role in increasing the bargaining power of the company (Peteraf, 2006). Question 2 How the focus on orphan drug affects the resources and capabilities of a company The focus on orphan drug is quite an expensive affair for a biotech company. This is because of the expenses required during research process which takes years for a drug to be developed. A biotech firm therefore requires some amount of capital that will be used during the research. On the other hand, a biotech company requires experts for it to succeed. This is because of the intensive research which has to be undertaken for a rare disease. It is therefore important for a biotech company to liaise with experts or doctors during the research. The sources of materials and ingredients for developing the drugs should also be identified. This is because the study of the rare diseases requires some of the human tissues which may be quite difficult to obtain. A biotech company should thus be adequately prepared for it to venture in the business. The laws and regulations governing the development of the orphan drugs should also be clearly understood by the firm to avoid the chances of being sued. It is thus important for a biotech firm to comply with all the rules and regulations. The resources of the company may be highly affected as the development of the drug takes years and the number of clients is few. This is because the rare diseases only affect a small population as compared to the other diseases. A company therefore, requires a lot of commitments in terms of resources and time for it to succeed (Kuang, et al, 2001). Question 3 The focus on orphan drugs by Genzyme The focus on orphan drugs by Genzyme makes a lot of sense. This is because it has saved the lives of thousands of people with rare diseases. Initially before the company was formed, most of the biotech focused on blockbuster drugs which could perform well in the market and generate more revenue according to Tsuchiya (2005). The focus on the orphan drugs was quite low as it has a small number of customers. This led to the pain and suffering of most of the people with the rare diseases. The initiative by Genzyme is not only focused on profit making but also assisting and saving the lives of the patient. This is due t the fact that the company uses most of the profits generated for the purpose of conducting research for other rare diseases. Although the company has not been able to fully develop the drugs for most of the rare diseases, it has made a lot of contribution in the area of orphan drugs (Haffner, 2006). This shows that the commitment of the company towards solving the problem is quite high. It is also committed to solving the future problems in regards to the rare diseases. By 2006, the company had about sixteen products in the late stages. This is an indication that the company is committed to addressing the future problems affecting the patients with rare diseases. This is despite the long period of time that the development of a drug takes. It is also evident that the company has future plans as it continues to expand its services and infrastructure. Question 4 Reasons for diversification in the areas of medicine The diversification of the company in the areas of medicine has been important survival tactics for the company. This is because the products are able to supplements each other in terms of sales. The development of one drug for the cure of a rare disease takes a long period of time. The diversification is thus important for the company as it enables the company to develop other drugs for different disorders while the other drugs are in the market. The diversification has thus been important for the company in terms of survival. This has also enabled the company to have different sources of revenue as opposed to depending on one drug. The number of unusual diseases is also high and they fall under different categories in medicine. This has thus led the company to diversify in a bid to tackle the different diseases. The diversification is important for an organization in terms of cautioning in against the losses and uncertainties that may occur in the market. This is important in terms of absorbing the losses that the company may incur when one of the products does not perform well in the market. The diversity is also important in terms of generating profits for the organization as all the products may generate profits which are beneficial to the organization. The diversification of the company is also important in terms of building its brand name as it will be recognized by different customers (Finkelstein, 2010). Question 5 Future recommendations for the company The company has a lot of potential in the development of orphan drugs. Although the number of patients who require the drugs developed by the company is few, it is important for the company to expand its production. This is because the drugs may not be available in some of the countries as it serves about thirty countries. This should be done by establishing manufacturing plants in different continents. The number of experts should also be increased by the company. This is for the purpose of growth and expansion of the company. It is also important for the company to employ business managers for the purpose of managing the business processes within the organization. The revenue of the company will also be increased if the services are expanded. The number of rare diseases is quite high as it ranges to thousands. Although the company has been able to develop the drugs for some of the diseases, it is important to intensify the research. More research should be done on other rare diseases in order to benefit the patients who are in need. The profits made by the company should be used for the purpose of increasing the research and hence more relieve to patients. Partnership with other stakeholders in the sector should be done for the purpose of aiding research. Partnership with other organizations is important in terms of boosting research as well as building the brand image of he company (Wadham, 2012). References Finkelstein, S. (2010). Advances in mergers and acquisitions (Vol. 9). Emerald Group Publishing. Haffner, M. (2006). Adopting orphan drugs—two dozen years of treating rare diseases. New England Journal of Medicine, 354(5), 445-447. Hepperle, M. (2002,). The Sonic Cruiser–a concept analysis. In International Symposium “Aviation Technologies of the XXI Century, International Aviation Exhibition ILA, Berlin. Ghemawat, P. (2002). Airbus vs. Boeing in superjumbos: A case of failed preemption. Kuang, J. et al. (2001). Critical factors for successful implementation of enterprise systems. Business process management journal, 7(3), 285-296. Loewe, P. (2007). Changing your company's approach to innovation. Strategy & Leadership, 35(6), 18-26. Peteraf, M. (2006). The cornerstones of competitive advantage: A resource‐based view. Strategic management journal, 14(3), 179-191. Tsuchiya, A. (2005). Orphan drugs and the NHS: should we value rarity? BMJ: British Medical Journal, 331(7523), 1016. Sinha, K. et al. (2011). Transportation decision making: principles of project evaluation and programming. Wiley. Wadham, H. (2012). Inspiring action, building understanding: how cross sector partnership engages business in addressing global challenges. Business Ethics: A European Review. Read More