Global Marketing for Boeing Company - Case Study Example

Global Marketing for Boeing Company Introduction Boeing Company is an American based multinational Aerospace and Defense Corporation that was founded in 1916 by William .E. Boeing in Seattle, Washington. It is the world’s largest aerospace company, and manufacturer of jetliners, and military aircraft. Boeing constitutes of multiple business units, and is rated as one of the largest global aircraft manufacturers by return orders and deliveries, and “the third principal aerospace and defense contractor in the world based on defense related revenue. Boeing is the largest exporter by value in the United States” (Bowman, 1998). Through strategic management Boeing Company has been able to thrive in the American market. Strategic management is a field that composes on the emergent initiatives that are undertaken by managers on behalf of the owners in terms of resource utilization, and organization performance in relation to their relative environments (Nag et al 2007). Development of policies and plans are crucial to effective, strategic management. It is concerned with the building of a shared vision, and the increase in motivation to enhance plan success. It is an ongoing process that controls and evaluates an organization through accessing of its competitors, setting goals, objectives, and strategy formulation. Boeing Company has been involved in the reassessing of the strategy either quarterly or annually to determine the success within the implemented strategies and required deviations that conform to the new technology, new competitors, new environment, politically, socially and financially. Its strategies battle with the continuous concern of decisive on the general intention and scope especially in the global market (Hussey 1998). In essence, in order to facilitate effective, strategic management, Boeing Company has managers who lead through coaching and inspiring. In practice, it entails adoption routes of action, and the allocation of resources in a way that is necessary in carrying out the overall objectives of the company. Boeing Company uses two recognized approaches towards strategic development: prescriptive and emergent approaches. They are examined in the context of increasing dynamic, and the highly competitive global business environment. Powerful external sources have driven Boeing Company towards the reduction of costs enhancing the processes and the identification of new opportunities for growth. In fact, it has been cajoled to make emphatic improvements not only to compete and prevail but also to survive (Reuer 2004). Prescriptive approach regards strategic development as a systematized and deterministic procedure where analysis of the organization, its performance and the entire external market culminates to the formulation of rational, long –term plan. The approach enables Boeing Company to exercise great control over different business units. Emergent approach is a situation whereby projects are done spontaneous, developed incrementally over time in order to adapt to a changing environment.. The strategy leads to more creative and responsive development strategy with hyper competitive and unpredictable environments in the modern world of business. Boeing Company has succeeded in abiding itself to goals, mission, and objectives; hence the success of the strategic development is accrued from its dynamism. Hence, Boeing Company has incorporated both prescriptive and emergent approaches to ensure success of the strategic development even in the ever changing environment (Sadler and Craig 2003). Boeing Company Strategic Plan Boeing Company marketing strategy has been influenced by its strong international relations with the clientele, and the workforce that is evenly distributed in over sixty countries. In essence, its subsidiaries have employed close to two hundred thousand people, and have made strong alliances with powerful companies globally making it easier to penetrate into the market faster, and in a more professional way. The market team has also been up to date with the wants of the global market as would be expected. This has led to brand enhancing, and improvements of business profits. However, this strategy requires investing of time especially when dealing with responses from clientele who need your services. Boeing Company has used SWOT (Strength, Weakness, Opportunity and Threats) analysis in determining the current and future strength, weaknesses, opportunities and threats that exist in the Company (Bohm 2009). The Company has strong global networking and a wide line up of products covering major markets. Investment resources have been determined to ensure the viability. Moreover, this plan has analyzed the appropriate systems, and structures used in supporting of the Company especially with the demand increase of point to point routes from the clientele. The threats of the company are evaluated such as stiff competition from other companies like Airbus. Gaps that tend to exist in the company are established such as uncertain environment in the industry and market slowdown, and reasonable measures are taken to invest in an effort to fill them. In essence, Apriority list has be formulated to ensure that the strategic plan is realistic, and achievable. Needless to say, the strategic plan takes place in the top leadership as a top level strategy. Its breakdown entails the technology management, operations management, people management, supplier management, production management, and the financial management (Ungson and Wong 2007). Implementation of Boeing Company Strategic Plan Implementation of a strategic plan can only excel if the current leadership is well versed. A tool commonly behind the implementation of a strategic plan is strategic measurement. Appropriate measure is a clear indication that the leaders are motivated and enthusiastic about the strategic plan. At Boeing Company, measures have served the purpose of increasing the in-depth focus on the strategic plan. The employees have been aligned around the specific issues that are important in the implementation of the strategic plan. Through the creation of a strategic map, Boeing Company has instilled measures geared towards identifying the main ingredients that enhance performance. Each functional area has contributed to the overall strategic plan and consequently defined measures on their own (Saloner et. al 2006). The process has descended throughout the Company such that each individual is linked to the strategic plan by having a clear picture of the goals, and the results they are attributed to, and how their individual success is gauged and rewarded. Performance measures are recommendable as they culminate in the competitive advantage. Flow of Boeing Company Strategic Plan At Boeing Company, managers have consulted various departments and functional areas to establish how they contribute to the overall strategic plan. Strategic maps have been used in this process to establish the overall strategic performance. Each functional area is involved in the mapping of its own success, and defining their specific performance measures. Essentially, the process is bound to assist employees in every functional area share, in the success of the strategic plan; therefore, enhancing is excellence and acts as a further motivation due to the continued performance. Recommendations of Boeing Company strategic plan The strategic plan is vital for the introduction of change at Boeing Company where managers have spent ample time in the evaluation of its effectiveness and have embarked in making appropriate adjustments and engagement of the rest of the working crew to portray the relevancy of the whole idea. It is worth noting that, poor strategic plans use more time when implementing, and may culminate into the formation of new / different plan. Decision Making Approach and Process Decision making in any organization entails the choosing of viable issues from a set of alternatives that require massive attention. It involves the evaluation of the options to ensure that an organization uses the resource mix in the realization of more profits. Therefore, successful leaders in the present age must be capable of initiating good decision making strategies. Leaders adapt goals and values through effective leadership. This means that they are basically involved in ensuring that strategic management is effective through the flow of information and effective communication within the units of the organization. The performance of the organization is directly influenced by the decision making processes because suitable decisions made in a current business situation goes a long way in influencing the performance of the organization. Thus, decision making process at Boeing Company involves putting in the weighing balance to determine if they are good and bad alternatives, the most efficient strategy, and the damage that can be accrued if bad decisions are made. The facts are then gathered, and those that are common with the management are analyzed first. More information is gathered incase clarity is required, as well as, incorporating creative options that encourage innovations. Profitable options and those that carry a high degree of risk are evaluated. The management evaluates the most viable alternative based on investment returns, ability to plan amicably on how to motivate the employees and maximization of shareholders wealth. PEST Analysis Venturing in a new market for Boeing is continually tricky especially in the United States of America. Several factors must, therefore, be considered to ensure that the jetliners have a good market. Political environment entails all political factors that have an impact on the capability of having placed Boeing Company in America with reference to the stability of the country because any business needs a stable political environment in order to flourish. In fact, the operations of Boeing Company internationally have been greatly influenced by policies from individual states. For instant, policies in the United States emphasize on the regulations of commercial aero planes. The government of the United States and its affiliate has been significant in overseeing Boeing in the transport market all over the world. Moreover, the government might as well prove to be the main driving force when it comes to giving orders to new crafts and engines in the future. For instance, china has been one of the largest markets for Boeing and is expected to remain in the same position for a long period of hence giving it a chance of political influence from the United States (Hill and Jones 2010). Economic environment entails all the economic variables such as interest rates, inflation rates, exchange rates, and others. These factors have influenced Boeing Company in helping sustain itself economically, hence thriving in the economic market. Moreover, the company has been able to employ workers who help in the manufacturing, and selling of the jetliners and other services that the company offers. However, the possibility of having increases in fuel costs, congestions, insurance costs ,and other factors have led to a drag in the economic growth in Boeing Company especially when the tourism industry is on recession globally. Social and Cultural Environment entails the social and cultural factors that affect any company or industry. Boeing Company was established in America due to the social class and population growth that meets the market for the company. Moreover, America is one of the countries in the world that need the jetliners especially in their war with other countries. For instance, the issue of the anti-US feeling that has been generated by the events which occurred in the past two years leading to a heavy impact on Boeing’s sales especially in the west of Asia where the company has a worthwhile market. Technological environment entails the way in, which most of the processing occurs. Being located in America is a great advantage to Boeing Company because there is a higher range of technology in processing /manufacturing of their products. For instance, Boeing has utilized this advancement through the building of new models of supersonic aircrafts, which help in satisfying the needs of clientele to reach their destinations quickly and on time. Boeing Company Competitive strategy Competitive strategy is a plan that is set by an organization on how it will compete with other organization. It is implemented after careful evaluation of its strengths and weakness to those of its competitors. Additionally, it is involved with moves to strengthen the market position, attract customers, and survive in the competitive environment. The objective includes gaining competitive advantage, making the clients loyal to your products/ services, and beating the competitors in an honorable and ethical manner. It is focused on the plans of management to compete successfully. Competitive advantage is realized by an organization that operates more efficiently or in a high quality way as compared to it competitors. It also denotes the benefits realized especially in providing the same value as that of its competitors but in a lower price, or setting a higher price and providing greater value by way of differentiation. It is a result of the match of core competence of the organization to its opportunities. Boeing Company has a goal of achieving sustainable competitive advantage (Tallman 2007). One common theory that has been used to survey the market in terms of competition is the Porter’s five forces theory. This theory denotes that. Boeing Company identifies its market in reference to both the strength of the current, competitive position, and the strength of the position which it aims to achieve. The theory presumes that there are five crucial forces that determine competitive power in a given situation. They include supply power, buyer power, competitive rivalry, threat of substitution, and threat of new entry. Supply power allows you to understand how suppliers accelerate prices in the market. This is particularly present in the number of suppliers with regard to key input, the exceptionality of their products/services, their strength plus the control they have over you. Moreover, the issue of switching from one supplier to another is also witnessed. Essentially, the few choices you have in suppliers, the more need of suppliers’ help especially due to their power. Buyer power gives a chance to evaluate the easiness in which buyers can bring prices down. It is mostly influenced by the number of buyers’ especially individual buyers in one’s business including the cost of them moving from one buyer to another. However, dealing with few powerful buyers can be challenging as they may be forced to dictate purchasing terms to the seller. Competitive Rivalry indicates the number and ability of competitors that are present. In case, several competitors are offering equal attractive products /services, then there is a likely hood of little power in the situation. Suppliers and buyers have the greatest impact in the market, in that if they are not offered good deals, they move to another market. Likewise, if the market is unique in their products to extent of having competition, then there is the presence of incredible strength. Threat of Substitution is influenced by the ability of customers to identify different ways in which business are being carried out. The supply of unique products may be substituted through manual processing or outsourcing. This automatically leads to weakening of power in the products that is available in the market. Threat of New entry revolves around power in that is demonstrated by the ability of people entering the market. Lack of protection for key technologies and few economies in scale can pave the way for new competitors in the market. However, strong and desirable barriers protect market territories and preserve favorable position in the market. These forces are relevant in ensuring that an organization is able to handle the market as per their advantage. In this regard, competitive strategy at Boeing Company is going global and diversifying. There are two major products associated with Boeing; commercial planes and integrated defense systems. The commercial planes include narrow body planes, wide body planes and freight planes. Integrated defense systems include military aircraft, missile defense systems, missiles, satellites and the likes (Witcher and Chau 2010) The Product Life Cycle In this theory, marketing of a product is divided into four phase: introduction, growth, maturity and decline. Introduction is a situation where an organization puts new products in the market. Growth is a situation where a replica of the current product is produced at another point and is then placed in the market to capture growth (Aladwani 2011). This facilitates the movement of production to other countries usually on the basis of cost and production. Maturity is a situation whereby an organization contracts and focuses on the market. The decline phase of the production life cycle entails a reduction of products to a point where they are discontinued, or they initially disappear from the market. According to Boeing Company the product life cycle has been cumbersome to handle, but the growth phase has brought much economic thrive in the market ( Hill and Jones 2009). BCG matrix The Boston Consulting Group (BCG) is a tool used to evaluate a company’s position in terms of its products range. It boosts focus on its products/ services in regard to making a decision on which it should keep, which should let go, and which to invest in the future. BCG is a useful way of screening company’s available opportunities and helps to think about the best location to allocate resources in bid to maximize profit. In bringing out the picture of how BCG functions, two strategic parameters are put into consideration; market share and market growth (Sigismund et al 2009). Market share denotes total market percentage being serviced by a company’s measured in terms of revenue or unit volume. It has been documented that high market share, equates high market proportion a company controls. Boston Matrix assumes that if a company under consideration enjoys a high market share then it is highly likely for it to make money. This notion has been developed on the idea that for a company is to reach such a position, it must have been in the market for long, and have learned how to be profitable thus enjoying the scale economies (Green and Keegan 2012). Companies use market growth as a measure of market’s attractiveness. It is apparent that markets that experiences high growth experience total market expansion, meaning that it is easier for businesses to maximize their profits even when market share remains stable. Even as competition in low growth markets is sour, and even as one might have high market share, chances of retaining that market share without aggressive discounting are low. In fact, this is what makes low growth markets less attractive (Wong 2010). In relation to Boeing Company, BCG Matrix acts like a star is has attributed to high market growth and market share especially in other countries such as India. Lockheed Martin and Air bus are considered to be the cash cows that operate with a low growth rate and high market share. Boeing Company has made the two competitors lose their market. This is due to low market growth, and low market share that are not included in the expansion strategies by the company. Risk Management plan Risk management is part and parcel of strategic management. It’s control of factors that produce some sort of risk. It involves reduction of risks through its component such as risk recognition, risk scrutiny and risk mitigation. The ultimate goals in this kind of management is ensuring that any activities that are undertaken by an organization. Risk assessment entails assessing the probability of the occurrence of a particular risk through risk identification, risk analysis and risk prioritization. Risk avoidance is one of the best ways of dealing with any risk that is considered severe in terms of physical injury, and financial loss. Risk control is a situation where managers within an organization manage risks to achieve the desired outcomes through planning, resolution, and risk monitoring. At Boeing Company, risk management has been taken serious especially with the fact that manufacturing of the jet liners is risky, and the processes involved are risky too (Henry 2008). Conclusion Strategic management is important in any organization to ensure its success. For effective management effective, strategic planning is vital. The prescriptive approach regards strategic development as a systemized and deterministic procedure where analysis of the organization, its performance, and the entire external environment culminates to the formation of the rational, long-term plan. The emergent approach is a clear indication that projects can be spontaneous, developed incrementally over time as a business undertaking adapt to a changing environment. In this model, a premeditated plan is not available. Planning entails the creating of the strategic plan, implementing the plan, recommendation for action, cascading the strategic plan. Decision making approach is also crucial in a company’s achievement. This means that the decisions made should conform to the set organizational objectives and should be acceptable by all the relevant stakeholders. 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