Home Work 6

Prof: K. Green

BUSN 427

HW# 6

By: Paul Maan

December 12, 2012

Summary:

The Boeing is an American multinational aerospace and defense corporation. Founded in 1916 by William E. Boeing in Seattle, Washington, the company has expanded over the years, and merged with McDonnell Douglas in 1997. Boeing moved its corporate headquarters from Seattle to Chicago, Illinois, in 2001. The Boeing Company was founded in 1916. They worked in several different areas of work from commercial airplanes to launch and orbital systems. However, it was not until the 1950’s when the jet aircraft was put into use for the first time that the Boeing Company started to control the commercial airline market (Harvard Business School). Boeing would go unchallenged for roughly the next fifty-three years. However, during this time the European company Airbus began to grow. Eventually, Airbus would grow into Boeing’s only competition. In fact, in 2003 Airbus sold more airplanes than Boeing. Airbus has had more deliveries ever since (Airbus). Boeing needed something to retake control of the aircraft market. It was clear that Airbus was taking away from Boeing’s market share. During this time, Airbus introduced five new designs of aircrafts with Boeing still stuck with their next plane design. This heavy competition is what drove Boeing to create a new plane that would help them reclaim dominance of the industry. However, they needed to complete the plane quickly and with minimum cost. This is what drove Boeing to outsource a higher proportion of the new plane compared to any model before it.

www.boeing.com/history/index.html

Global Business Today7th Edition by Charles W. L. Hill© 2011 McGraw Hill

Q1. What are the benefits to Boeing of outsourcing so much work on the 787 to foreign Suppliers ? What are the potential risks? Do the benefits outweigh the risk?

Benefits:

* Outsourcing reduces the risks associated with technological gamble i.e. always

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