Week 3 – Boeing Case Study Questions 1 & 2 The purpose of a diagnostic model is to give an organization an area in which to improve and help them to meet goals. The most logical choice for Boeing to use in this case is the 7-2 framework. Boeing was facing strong competition and they had made plans to implement a change in order to improve the company structure so they could become more competitive. Boeing also faced several issues in this case. They were not living up to the demand for their services, and had technology systems that were outdated.
This was the beginning of a local conflict in the area. The proposal also included the construction of a tunnel to prevent disruption of the M4. There are arguments both for and against the expansion of the airport, but the most obvious benefits of the development would be the huge increase in capacity. Heathrow airport is already running at 99% of its maximum capacity, this often means planes are left circling above until a runway is available to land, which causes delays as well as unnecessary emissions. The expansion would allow for another runway to solve this problem.
So many issues came up right from the start of the contract. This could have been due to the fact that, the contract was hard to make in the first place, whereby both parties fiercely negotiated every clause of the contract and worse still could hardly reach any consensus. The contract became more complicated because software requirements were not very clear to either party. The contract was ambiguous and both parties went ahead and signed it anyway. Lack of clarity of purpose can be a risk and a legal issue leading to disputes.
Off-the-shelf software is cheaper than developing custom software. Conversely, due to Boeing’s massive scope and size, outsourcing certain elements would be inefficient. Outsourcing payroll or sales force management with 158,000 employees in 70 countries would be an extremely difficult, let alone expensive, task. Processes like payroll and sales force management often require much human interaction in order to work properly, so outsourcing these elements could create major roadblocks for employees and employers alike. On the other hand, why would Boeing develop in-house some of the software applications used in conjunction with its products?
There is also not enough space for storing raw materials and finished goods, which of course means that production may be slow if not everything is accessible. The layout of the company makes the workflow difficult and so motion is wasted. This leads to a decrease in production. The employees are not being allowed to work at their fullest potential, (02) Secondly, long term Albatross Anchor must decide to upgrade their technological tools. In order to be more successful in their industry, they must have up-to-date equipment and technology.
In JetBlue case, the current economy situation creates high market entry barriers, which consists extremely high fixed cost and numerous capital requirement. Moreover, the potential and existing competitors affect the industry has a low profit margin, and it is difficult for new entrances to differentiate their products and services from competitors. The bargaining power of supplier is high. The key inputs for the airline industry are the fuel and aircrafts. Boeing and Airbus dominate the aircraft manufacturing industry.
2. Wengart Aircraft top management officials are worried about the increasing of profits because of their bonuses. The President Ralph Larsen stated that he didn’t have time to get involved in the implementation of TQM because he needed to
Based on the summary table provided in the text book – the first thing that jumps out is how disproportionate the labor volume/number of employees is to the number of aircraft that the company has. The company has to make some tough decisions in streamlining the labor force to reduce the cost of labor and make itself more competitive with its peers in an industry where competition is stiff at the least. In addition to this the idea that they will be using more regional jets e.g. Mesa Air in medium markets may help alleviate operating costs that are also currently very high. US Airways may also want to look into the option of merging/working with one of the more successful low cost carriers as a strategic partnership 2.
Making travel to these areas much more expensive than what is really necessary. Quite possibly making the cost to these areas for travelers so much more expensive than most would be willing to pay. This could just be a ploy for the airline to stop this flight service from San Francisco to Washington, D.C. because they are in fact not making enough to cover the fuel and crew costs for these flights. Rather than announce the cancellation of this service themselves, they could be feeding information to the WSJ to help get the word out that they plan to stop this service in the near future. And this article is helping them to plant that seed.
a. Ups didn’t create overnight delivery because of high cost to build an air fleet. b. FedEx was able to create a fleet because invested a lot of capital in purchasing their own planes at the beginning before entering the market. 3. What is going on in the industry? How are the two firms competing?