Group 55

The Boeing Company

Introduction to the company

Our company is The Boeing Company. It is an American multinational aerospace and defence corporation and was founded in 1916 by William E. Boeing in Seattle, Washington. Boeing is among the largest global aircraft manufacturers by revenue, orders and deliveries, and the third largest aerospace and defence contractor in the world based on defence-related revenue. The company is the largest exporter by value in the US, and its stock is a component of the Dow Jones Industrial Average

Industry Chosen:
The industry that we have chosen is the Hybrid Electric Vehicle. In the beginning, the plan is to set up operations on the United States and parts of Europe, like the UK and Germany. Eventually, expansion plans may be in order. Introduction to hybrid Electric Vehicle

A hybrid electric vehicle (HEV) is a type of hybrid vehicle and electric vehicle which combines a conventional internal combustion engine (ICE) propulsion system with an electric propulsion system. The presence of the electric power is intended to achieve either better fuel economy than a conventional vehicle, or better performance. Hybrid vehicles can reduce air emissions of smog-forming pollutants by up to 90% and cut carbon dioxide emissions in half.

Reasons:
Internal Environmental record

Researchers at the University of Massachusetts Amherst had listed Boeing as the thirteenthlargest corporate producer of air pollution in the United States based on 2002 data, although data from 2008 shows that they have dropped off the list. Due to the alleged allegations made against Boeing about its non eco friendly working. It has taken to several new programs and campaigns to ensure that it does its part to keep the environment clean and healthy. Some of these programs are: o Jet biofuels Aviation's share of the greenhouse gas emissions is poised to grow, as air travel increases and ground vehicles use more alternative fuels like ethanol and biodiesel. Boeing estimates that biofuels could reduce flight-related greenhouse-gas emissions by 60 to 80 percent. The solution would be blending algae fuels with existing jet fuel o Electric propulsion For NASA's N+3 future airliner program, Boeing has determined that hybrid electric engine technology is by far the best choice for its subsonic design. Hybrid electric propulsion has the potential to shorten takeoff distance and reduce noise. In addition to this, their entry into the HEV market would be in complete alignment with their new activities.

Market:
The fact that with the automobile industry there's lot of customer loyalty, and brand consciousness involved and there is this whole thing of tradition and history that all the existing players in the automobile industry have. But we have taken something new like the hybrid market, which is still developing and hasn't taken the public by storm just yet. However, with the rising prices and environmentally conscious customers, it presents a huge market

More than 4.5 million hybrid electric vehicles have been sold worldwide by the end of December 2011 US MARKET o The US presently constitutes the largest regional market for electric vehicles, accounting for more than 50% of the global market o The Prius family has over 30% market share in the HEV market in the US. o Other players include, Honda, Ford and Lexus.

EUROPE MARKET o The UK has been leading the charge for the HEV market in Europe o Hybrid electric vehicles (HEVs) have been a very niche market in Europe over the last few years o Till not long ago, Toyota is the only VM to sell full HEVs in Europe and thus accounted for all sales of full HEVs o Lexus has also been trying hard to gather a market share in Europe

Competencies Boeing itself identifies three main core competencies: Detailed customer knowledge and focus: Boeing commits to understand, anticipate and be responsive to customers' needs. Large-scale systems integration: Boeing will continuously develop, advance and protect the technical excellence that allows integrating effectively the systems designed and produced. This core competency can also be known as Boeings R&D core competency. Lean enterprise: Boeings entire enterprise will be a Lean operation, characterized by the efficient use of assets, high inventory turns, excellent supplier management, short cycle times, high quality and low transaction costs.

Threats: The three most popular hybrid vehicles, Honda Civic, Honda Insight and Toyota Prius, The Prius is the worlds top selling hybrid car, with cumulative global sales of 2.5 million units by Feb 2012

Porters 5 Forces:
Threat of New Entrants: Low It is not that easy for an entrant to enter into a car industry because of the brand loyalty of customers. Although, this being a new market, it opens up scope of lot of new entrants, it is important to note that the success of a non automobile player here is highly risky. There is high Capital requirement and high technical knowledge and expertise required. Bargaining Power of Suppliers: Low Suppliers have a little power in an automobile industry. Thats because numerous suppliers rely on some particular auto manufacturers to buy their products. Each manufacturer has many suppliers. Bargaining Power of Customers: Medium There arent very many players of HEVs to choose from. The factors that affect consumer to make a buying decision are: the appearance, quality, price, and environmental effect. People always want a new and nice looking car. Besides that, the quality of the car is an important issue. The car has to efficient. Based on a variety of the lifestyles, people choose to purchase a car in a different way. Threats of Substitutes: Low It is true that there are many of transportations substituting automobiles. They are bicycles, subways, buses, and trains. The HEV is a substitute to the regular fuel injected car.

Competitive Rivalry between Existing Players: High Competition between existing automobile companies is high because there is a huge scope for the market and the players in the automobile industry all want to capitalise on this opportunity. That may cause the industry earning lower profits when the cost of the competition is high.