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Book part

Michael Kleinaltenkamp, Ronny Behrens and Stefanie Reh

This short case study deals with the analysis of the airborne refueling tanker contract placed by the U.S. Department of Defense to the U.S. group Boeing. The data used in…

Abstract

This short case study deals with the analysis of the airborne refueling tanker contract placed by the U.S. Department of Defense to the U.S. group Boeing. The data used in this case is all drawn from secondary sources, and the story told chronologically. Initially, the scene is set with a discussion of the types of relationship, planned and de facto, that emerge when companies do business with each other, and an analysis of the situations when different emphasis is placed upon specific benefits and costs of the relationship. Discussion continues around the concept that relationship benefits are perceived as more important for the continuation of a relationship than relationship costs – when relationship value, direct switching costs, and sunk costs exist, the search for a new partner is reduced.

The question of why Boeing was favored by the U.S Department of Defense over competing Airbus Industries stands in the center of this analysis. The analysis explains how existing business relations and their binding effects, as well as resulting advantages and disadvantages, influence subsequent behavior.

Details

Field Guide to Case Study Research in Business-to-business Marketing and Purchasing
Type: Book
ISBN: 978-1-78441-080-3

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Article

James Welch

This paper aims to examine the prospects of a Boeing recovery following disasters in 2019 and 2020. While some companies have navigated successful journeys through the…

Abstract

Purpose

This paper aims to examine the prospects of a Boeing recovery following disasters in 2019 and 2020. While some companies have navigated successful journeys through the process of reputational recovery following self-inflicted pain, Boeing faces significant reputational and global complications which have greatly prolonged the recovery process.

Design/methodology/approach

This paper is based on a case study approach examining the recovery process for Boeing, considering the safety issues of 2019 and the pandemic crisis during 2020. Although the Covid-19 spread was certainly a black swan event, Boeing had already inflicted a great deal of damage upon its business and reputation because of the 737 Max. This paper examines their recovery process thus far by using a four-step recovery model of replace, restructure, redevelop and re-brand that has been implemented in previous corporate recoveries.

Findings

When examining the corporate recovery process, though the four-step approach is a model that can work across industries, there are some challenges depending on corporate specifics. The major challenge with Boeing is the ongoing reputational concerns regarding safety combined with the new global reality because of the Covid-19 pandemic. A full corporate recovery will require attention to each of these four prongs of the process, stretched out over several years. Any missteps along the way will only prolong the pain for one of history’s most historic and influential manufacturers.

Originality/value

While several publicly traded companies have overcome significant obstacles over the past five years in the quest to regain trust within the marketplace, Boeing continues to face strong headwinds. Using previous examples of corporate recovery provides an interesting case analysis of what to do and what not to do during the corporate recovery process and provides a unique blueprint to what might bring Boeing back from the brink.

Details

Journal of Business Strategy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0275-6668

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Article

David Turnipseed, Ali Rassuli, Ron Sardessai and Carol Park

Boeing has been a pioneer in the utilization of strategic alliances with the Japanese in the design and production of aircraft. This strategy has been driven by the…

Abstract

Boeing has been a pioneer in the utilization of strategic alliances with the Japanese in the design and production of aircraft. This strategy has been driven by the escalating costs of airframe and engine design and manufacture, and the significant competition of Airbus as well as domestic competitors in the global aircraft market. Boeing's alliances with Japan have worked well with several families of aircraft and appear to have produced a loyal customer; however, there have been sharp criticisms of Boeing for the closeness of its association with Japan. These criticisms have largely been aimed at the danger posed by unintentional and unavoidable transfer of aerospace technology. This paper examines the history of Boeing's Japanese coalitions, the benefits, and the dangers posed by Boeing's continued aerospace partnership with one of America's largest economic foes.

Details

International Journal of Commerce and Management, vol. 9 no. 1/2
Type: Research Article
ISSN: 1056-9219

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Article

Stephen Lueke

The purpose of this article is to examine changing employer strategies in dealing with organized labor through Boeing’s negotiations with its local Puget Sound…

Abstract

Purpose

The purpose of this article is to examine changing employer strategies in dealing with organized labor through Boeing’s negotiations with its local Puget Sound, Washington-based District 751 of the International Association of Machinists and the district’s international parent.

Design/methodology/approach

Considers factors including leveraging the slow growth of the US economy and the resulting job-security issues among US workers generally and Boeing workers in particular, along with the divided age composition of Boeing’s workforce to achieve market-share competitiveness with Boeing’s chief global rival, Europe-based Airbus Industries.

Findings

Advises that there is no substitute for early strategic analysis of bargaining goals and strategies, particularly with respect to economic bargaining.

Practical implications

Advances the view that a well-defined bargaining plan is the most likely key to success in any set of union collective bargaining agreement negotiations.

Social implications

Considers the tensions that may exist between younger members of the workforce, whose priority is likely to be job security, and older members, who may be more concerned about their pensions.

Originality/value

Presents the ongoing story of collective bargaining agreement negotiations at Boeing.

Details

Human Resource Management International Digest, vol. 22 no. 6
Type: Research Article
ISSN: 0967-0734

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Case study

Nabil Al-Najjar, Ichiro Aoyagi, Guy Goldstein, Ted Korupp, Bin Liu and Suchet Singh

Boeing and Airbus are contemplating entry into very-large-aircraft (VLA) markets. Both firms are convinced the market cannot support two players due to the extremely high…

Abstract

Boeing and Airbus are contemplating entry into very-large-aircraft (VLA) markets. Both firms are convinced the market cannot support two players due to the extremely high R&D costs and the limited (and highly uncertain) state of demand. The key strategic issue is the uncertainty surrounding Boeing's development cost: to what extent would Boeing's experience with the 747 help it reduce the R&D cost of a new VLA prototype? The main point is that Boeing's strategic moves signal its private information, and that this eliminates any first-mover advantage Boeing might have had in this market.

To introduce some of the strategic issues arising in natural monopoly industries in which the winner takes all, and focus on the issues of credible preemption and signaling.

Details

Kellogg School of Management Cases, vol. no.
Type: Case Study
ISSN: 2474-6568
Published by: Kellogg School of Management

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Article

Martin Hinch, Jim Berry, William McGreal and Terry Grissom

The purpose of this paper is to analyse how London Interbank Offered Rate Index (LIBOR) and the spread between LIBOR and the base rate of interest as set by the Bank of…

Abstract

Purpose

The purpose of this paper is to analyse how London Interbank Offered Rate Index (LIBOR) and the spread between LIBOR and the base rate of interest as set by the Bank of England (BoE) influences the variation in house prices in the UK.

Design/methodology/approach

This paper uses monthly data over a long time series, since 1986, to investigate the relationships between house price and LIBOR. Data are drawn from several different sources to include housing, financial and macro-economic variables. The time series is sub-divided into a series of splines based on stages in the economic and property market cycle. Both value-based and percentage change models are developed.

Findings

The results show that BoE base/LIBOR margin variable has a strong positive and significant effect on house price; however, the percentage change model infers a weaker and inverse relationship. The spline analysis re-emphasised the significance of the BoE base/LIBOR margin variable. Where variation between base rates and LIBOR is reduced, a significant positive effect can be observed in the average house price; however, where significant variation exists, the BoE base/LIBOR margin has little effect and LIBOR itself becomes a significant driver.

Research limitations/implications

The results highlight that the predictive qualities of the BoE base/LIBOR margin, as the contribution of this margin to the explanation of house price, exceeds both the base rate and LIBOR variables individually. Also highlighted is the contribution of unemployment to the explanation of house price. In both the value and percentage change models, unemployment is shown as a negative and highly significant contributor.

Originality/value

Previous papers have demonstrated the important linkage between house price and interest rates, the originality in this paper lies in examining the impact of LIBOR and the spreads between LIBOR and base rate as key variables influencing variation in UK house prices.

Details

International Journal of Housing Markets and Analysis, vol. 8 no. 1
Type: Research Article
ISSN: 1753-8270

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Article

Xielin Liu

The purpose of this paper is to examine the effects of international acquisition activities on performance and its role in innovation build‐up in developing countries.

Abstract

Purpose

The purpose of this paper is to examine the effects of international acquisition activities on performance and its role in innovation build‐up in developing countries.

Design/methodology/approach

A case study was used to understand the deep integration process of acquisition process. The theory behind the study is the relationship of innovation management and merger and acquisition activities.

Findings

Acquiring a company with higher technologies has more risks and it requires the acquiring company to master a fast learning capability. The key to a successful international technology acquisition for a developing country is to leverage technology dynamics and build up a high‐level learning capability to absorb tacit knowledge.

Research limitations/implications

An in‐depth case study was adopted. Further quantitative research may be needed to test our research outcome here.

Practical implications

The case study may provide valuable reference for the companies aiming to catch up via international acquisition in the developing countries.

Originality/value

First, this paper is to enrich literature on acquisition research from a technological perspective. Second, fast learning capability, especially the capability to absorb tacit knowledge, is the key to a successful acquisition when a lagging‐behind company in the developing country wants to catch up a leading one.

Details

Journal of Science and Technology Policy in China, vol. 1 no. 2
Type: Research Article
ISSN: 1758-552X

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Article

Ramesh Agarwal and Zheming Zhang

The ratio of the energy liberated during a flight to the revenue work done (ETRW) of an airplane can be employed as a key indicator to assess its environmental impact. It…

Abstract

Purpose

The ratio of the energy liberated during a flight to the revenue work done (ETRW) of an airplane can be employed as a key indicator to assess its environmental impact. It remains constant during the life cycle of the aircraft and is fixed by its designers. The goal of an environmentally optimum airplane is to minimize the ETRW. This paper seeks to address these issues.

Design/methodology/approach

For an existing airplane, there are two major parameters that can greatly affect the ETRW, which are the ratio of actual payload to maximum possible payload “c” and the flight range R. The goal of this paper is to study the effect of c and R on ETRW and minimize it by using a genetic algorithm (GA). The study is performed on a Boeing 737‐800 and a Boeing 747‐400 aircraft as well as recently proposed aircraft designs, namely the Boeing second generation Blended‐Wing‐Body (BWB) and MIT Double‐Bubble D8.2.

Findings

It turns out that the maximum possible values of payload and range do not necessarily lead to a flight with minimal environmental impact. For new aircraft designs, the minimization of ETRW should account for advances in materials, alternative fuels, structures, aerodynamics and propulsion technologies which can be taken into consideration at the design stage.

Research limitations/implications

It should be noted that other factors which also affect the emissions, namely the aircraft operations and air traffic management, are not included in the ETRW.

Originality/value

The optimization study is valuable in determining the payload and range of an existing aircraft or a new aircraft configuration for minimal environmental impact.

Details

Aircraft Engineering and Aerospace Technology, vol. 85 no. 3
Type: Research Article
ISSN: 0002-2667

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Article

Ramesh Agarwal and Zheming Zhang

The ratio of the energy transformed to the revenue work done (ETRW) during a flight of an airplane can be employed as a key indicator to assess its environmental impact…

Abstract

Purpose

The ratio of the energy transformed to the revenue work done (ETRW) during a flight of an airplane can be employed as a key indicator to assess its environmental impact. It remains constant during the life cycle of the aircraft and is fixed by its designers. The goal of an environmentally optimum airplane is to minimize the ETRW.

Design/methodology/approach

For an existing airplane, there are two major parameters that can greatly affect the ETRW, which are the ratio of actual payload to maximum possible payload “c” and the flight range R. The goal of this paper is to study the effect of c and R on ETRW and minimize it by using a genetic algorithm (GA). The study is performed on a Boeing 737-800 and a Boeing 747-400 aircraft as well as recently proposed aircraft designs namely the Boeing second-generation Blended-Wing-Body (BWB) and MIT Double-Bubble D8.2.

Findings

It turns out that the maximum possible values of payload and range do not necessarily lead to a flight with minimal environmental impact. For new aircraft designs, the minimization of ETRW should account for advances in materials, alternative fuels, structures, aerodynamics and propulsion technologies which can be taken into consideration at design stage.

Research limitations/implications

It should be noted that other factors which also affect the emissions, namely the aircraft operations and air traffic management, are not included in the ETRW.

Originality/value

The optimization study is valuable in determining the payload and range of an existing aircraft or a new aircraft configuration for minimal environmental impact.

Details

Aircraft Engineering and Aerospace Technology: An International Journal, vol. 86 no. 2
Type: Research Article
ISSN: 0002-2667

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Case study

Jennifer Brown and Craig Garthwaite

At the dawn of the twenty-first century, Boeing and Airbus, the leading manufacturers of large aircraft, were locked in a battle for market share that drove down prices…

Abstract

At the dawn of the twenty-first century, Boeing and Airbus, the leading manufacturers of large aircraft, were locked in a battle for market share that drove down prices for their new planes. At about the same time, the two industry heavyweights began developing new aircraft families to address the future market needs they each projected.

Aircraft take many years to develop, so by the time the new planes made their inaugural flights, significant changes had occurred in the global environment. First, emerging economies in the Asia-Pacific region and elsewhere were growing rapidly, spawning immediate and long-term demand for more aircraft. At the same time, changes to the market for air travel had created opportunities for new products. These opportunities had not gone unnoticed by potential new entrants, which were positioning themselves to compete against the market leaders.

In October 2007, the Airbus superjumbo A380 made its first flight. The A380 carried more passengers than any other plane in history and had been touted as a solution to increased congestion at global mega-hub airports. Four years later the Boeing 787, a smaller long-range aircraft, was launched to service secondary cities in a point-to-point network.

The case provides students with an opportunity to analyze the profit potential of the global aircraft manufacturing industry in 2002 and in 2011. Students can also identify the actions of participants that weakened or intensified the pressure on profits within the industry.

Audio format (.mp3 file) available with purchase of PDF. Contact cases@kellogg.northwestern.edu for access.

Details

Kellogg School of Management Cases, vol. no.
Type: Case Study
ISSN: 2474-6568
Published by: Kellogg School of Management

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