Boeing Market Pressure - Essay Example

? Study Case Study Case Boeing is an American aircraft company. It has been experiencing different problems all through,but the peak of the company’s issues was in the year 2003. This was a result of different scandals from different individuals in the management of the company. It is evident that the company’s officials lost different documents with the aim of blocking evidence of their corrupt deals. It is also that the president resigned the same year after seven years of service. It was difficult to understand as it is among the leading companies in the world in reference to the market dominance from other companies in that line. It is evident from the study case, that the problem in Boeing was affecting different processes within the company. The whole company was in doubt; the previous admirable performances were ceasing. The stock had previously risen by 6.7%, and it was beginning to fall drastically. The company later began undergoing a series of changes. This was after the company was unable to meet the prevailing demand. It tried its best by doubling it capability, but all was in vain. It got to the extent that the company had stop producing the 747 for 20 working days. This was to the company as it lost a lot of money. From the arguments from the acting president, this was a result a poor organizational structure. Other activities casing the problem are lack of communication. In reference to the culture of the company, it has been doing well through acquisitions, thus forming integration among different companies. The aim of the strategy was to extend its reach, therefore, making the company stronger that its opponents. These activities made the company lose the culture. It merged with different organizations, such as the McDonnell Douglas in the year 1997. The step made the company change its operations, as well as, its management trends and centre of administration was transferred to Seattle Chicago. Issues in the management of the company began after the merging action as it lost its culture. McDonnell had a complex culture, based on defense contracts. The merge also came with it, financial issues where $92.5 Million were distributed to shareholders. In the same year, the firm designed new strategies to improve their marketing capabilities. It also hoped that the production would increase the level of production. The firm also employed new strategies to for communication within it. Their stock was also keenly supervised through system. This is evidence that the company, was getting back to its previous position. There was also decentralization of information technology within the firm. This enhanced collaboration between different branches of the company. Toward the end of the month of December 2003, the company had recovered the opportunity to manufacture the 7E7 Jets. From analysis from difference economist, the reason behind the under performance of the company was that it had over promised and under-delivered. It is evident that the plans of the company depend on the producing smaller planes; it also plans to expand its productivity to the extent of purchasing large plans in the future. Market pressure There are diverse pressures that triggered Boeing to effect changes on its operational strategies. A crucial pressure for Boeing was mainly market demand. Market demand markedly increased in 1997, in an attempt to meet all its surplus orders, Boeing instantly doubled its production. Unfortunately, this strategy brought about a severe manufacturing crisis. Worse still, Boeing’s reputation was deteriorating and it called for urgent measures to curb the situation. It was then that the manufacturing of 747 was abruptly stopped for up to 20 days. Lack of communication within the organization was the main source of the ongoing crisis. However, Boeing termed it as a win at all cost methodology. There has been a series of endless problems at Boeing. Citing a case of the year 1994, shock prevailed among executive managers when Airbus booked more orders than Boeing. Another example is that of 1997, when the market demand rose exceedingly; Boeing was forced to double its production instantly. However, the measure was not successful as the company later stopped its manufacturing process for some time. During that same year, Boeing merged with Mc Donnell Douglas with an aim of increasing its production but, this was the contrary as its production dropped drastically. Further still in 2001, Boeing strategized more efficient production through the adoption of the lean principles. Unfortunately, the whole process turned out to be a struggle for Boeing. In 2003, stock price at Boeing decreased drastically by up to 6.5%. In turn, this led to increased pressures due to high competition in the market (Pascale, 2008). Diagnosis Models These are models used in organizations to bring about a solution existing in an organization. The model must be appropriate so that a solution is met within the shortest time frame. There are different diagnostic models such as the star model, the six box model, the 7s model, the pestle frame work, and the Gap analysis. PESTLE Frame work The frame work was design by leading economist to help managers in dealing with the problem in the macro environment. The model analyzes the political, environmental, social, technological, and economic, and legal issues in the business environment. In the case of Boeing, there is a problem relating to economic and technological factors. The management should design strategies to cope with the economical and technological issues in the environment. There must be a strategy, where sudden changes in the economy are dealt with to avoid adverse effect as what happened in Boeing. A change in demand in the product should be of benefit to the company, this is because there will be more sales and the same time; their price of the products may rise, as well. It is the role of management to ensure that the firm is ready to adopt the changes concerning technology as seen in the study case. This ensures that the competitors do not have an advantage over the firm in question (Lambert, 2008). Gap analysis This is a strategy used to by the organizational management to deal with emerging issues. The strategy identifies areas with deficiencies, and later handles one by the model is appropriate as it allows the firm to keep it up to date and maintain a suitable position in the business environment. Like it was in the case of the change in demand, the organization could identify the problem and give the possible solution so as to ensure that it has the capacity of meeting the demands of its market. The same thing would have happened to the technological gap. From the study case, it is evident that strategic management is crucial in business management. This is because it facilitates the suitability the business in different occurrences (Tichy, 1999). References Lambert. D. J., 2008. Supply Chain Management: Processes, Partnerships, Performance. Supply Chain Management Inst. Grant, R.T., 2007. Contemporary Strategy Analysis: Text Only. John Wiley and Sons, 2010. Tichy, N. 1999. Managing Strategic Change: Technical, political, and cultural dynamics. New York: John Wiley. Pascale, R. 2008. Managing on the Edge. New York: Simon and Schuster. Christensen, C. "The Innovator's Dilemma." Boston: Harvard Business School Press. Schartz, P. 2004. The Art of the Long View. New York: Doubleday. Read More