Also, with the unrealistic estimation of future growth in global demand for commercial jets, the guarantee of selling such a high number of Airbus’ units is doubtful. Finally, the actual sales figures is tantamount to determining share price and the overall effect of revenue on the shareholders. Company Objectives Lockheed is pushing to achieve more than just a break-even figure for the Airbus – they wish to exceed the break-even
It gives attention to issues such as planning, incentives and rewards, the role of support functions such as personnel, internal competitions among organizational units, standards for remuneration, partnerships, hierarchies and the delegation of authority, organizational control, accountability and performance assessment. The model also follows the basic 'systems' approach to organizational functioning including the well-known inputs and 'outputs' categories. 2). Explain the Boeing situation in terms of your selected model. The 7s- framework focuses in seven key components: Strategy: Boeing strategy consists in update their technology systems, downsize their operations, and reestablish relationships with their suppliers-the only feasible way costs could be cut.
When examining the problems at hand, it becomes clear that Boeing should focus on structure. Boeing has recently undergone some mergers and acquisitions and has a giant need to integrate these companies into the Boeing family so employees and consumers aren’t confused and to eliminate duplicate functions between organizations (Galbraith 2000). Secondly, technology is lagging not just in operations, but in employee data tracking and knowledge management. Another application of this could be in the marketing department through the use of metrics to better meet market demand. The use of a knowledge management system would also help to address the collaboration problem that Boeing has between employees.
What are the forces driving competition in the airline industry? Using this approach to industry analysis discussed in this chapter, evaluate each of the six forces in the task environment to ascertain what drives the level of competitive intensity in this industry. Threat of New Entrants – Low Larger, and more established airlines can achieve economies of scale since they can spread costs among a larger fleet of airplanes and more routes. Smaller firms and new entrants will have to make do with specific routes; otherwise, they can run into logistical problems if they take on a wide variety of routes while they are still starting up. Most airline customers travel for vacation or holiday, and plane fares are a more important criterion rather than product/service differentiation between the airlines.
Looking at the many functions of the management teams and management instilled within the Boeing Corporation. Analyze planning functions of management, influences that legal issues, ethics, and corporate social responsibilities have had on management planning within Boeing. Analyze factors that influence the contingency, operational, strategic, and tactical planning within Boeing Corporation. Boeing is a top aerospace and commercial airplane manufacturing company worldwide. It is responsible for military defense aircraft, working with the department of defense on contracts for supplying plans for the military.
JetBlue's core strategy is to “provides high-quality customer service at low fares primarily on point-to-point routes" (“JetBlue”, 2005). Offering alternative choices to customers such as point-to-point routes to areas that are not catered to by most airlines as well as large metropolitan areas that have had” high average fares” is another part of their strategy. Differentiating their product and service is another part of the plan. Items like new aircraft, leather seats, free LiveTV at every seat and pre-assigned seating are just a few things that make JetBlue different (“JetBlue”, 2005). I would say that JetBlue would fall under both customer intimacy and product leadership customer value proposition.
The results of this evaluation define which stakeholders are fundamental to decision-making. This can be applied to labor-management bargaining unit negotiations with American Airlines. The primary stakeholders of American Airlines Labor Contracts are American Airlines – AMR, the Allied Pilots Association, the Transport Workers Union (TWU), TWU’s Air Transport Division, the Association of Professional Flight Attendants, the Federal Government, and the general American public. Although technically only applying to Railroad employees, in 1888, the first Federal labor relations regulations were enacted (Congressional Digest, 1993, p. 1). “In 1926, the Railway Labor Act (RLA) was
7E7 Project Overview According to our detailed analysis, based on our assumptions, we worked out a WACC of 9.48%, which is lower than the IRR in the case analysis. This WACC implied a NPV of 4133 million dollars. In addition, in the sensitivity analysis, the WACC is lower than the IRR in most scenarios, which include unit volume sold, price premium, development cost and COGS as percentage sales. Now the commercial-aircraft segment of Boeing is facing stiff competition from Airbus and losing its advantage. Boeing executives wish to come up with a more flexible and fuel efficient jetliner “7E7” to regain market share.
Use Figure 2.3 to analyze the extent to which Boeing is using a systems viewpoint. -In Figure 2.3 consists of the inputs, transformational process, outputs and feedback. Boeing, consistently checks on its suppliers which are the inputs to the production, the transformational process would be where Boeing use the inputs from the suppliers and make them into outputs. Output and feedback would be what has happened in late 1990's that cause the factory to have to shut down some of its assembly line due to quality issues. How are the managerial practices being used at Boeing consistent both with a contingency and quality management viewpoint?
Case Study 6 Analyzing Managerial Decisions: United Airlines Discontinuing United Airline flights from San Francisco to Washington D.C is not the best option in this case. In this case United Airlines need to view the calculation to make sure they are accurate and are reported accurately by WSJ. I also think the use of marginal analysis would be very beneficial in this case. Companies use marginal analysis as a decision-making tool to help them maximize their profits. Individuals unconsciously use marginal analysis to make a host of everyday decisions.