Corporate Strategy Case Study

7E7: BOEING'S BIG BET

OR

Abstract:
Since its entry into commercial aircraft manufacturing in 1916, Boeing was the undisputed leader in the industry. But the emergence of Airbus in 1970 held back Boeing's marathon success. Particularly, the Airbus A340 seemed to eclipse the success of the 747, Boeing's time-tested aircraft since 1969. For the first time in its history, Boeing’s market share fell to 49% in 2001, while Airbus reigned with 51% market share. Problems multiplied for Boeing when Airbus commenced the manufacturing of the A380 in 2001, which was touted to beat the 747 on all parameters. Having being crisscrossed by Airbus and ridiculed by industry observers for being slow to react, Boeing, finally, announced its plans to build the 7E7, which, the company said, would outperform all the existing aircrafts. While Boeing based its future on the speed of aircrafts (less travel time), Airbus relied on the seating capacity.

Pedagogical Objectives:

• To discuss Boeing's philosophy for the future after it shelved two of its earlier projects, the 747X and the Sonic Cruiser
• To discuss Boeing’s competitive strategies vis-à-vis Airbus
• To analyse the changes Boeing had initiated in its manufacturing process

Keywords : Boeing 7E7; Dreamliner; Airbus A380; Hub and spoke system; Composites; Risk sharing partners; Innovation Management Case Study; Life cycle product teams; Layoffs; Sonic Cruiser; Outsourcing