MEMORANDUM
TO: EMILY CRAIG, CALEB SALAZAR, COLIN PENDERGAST, ATTICUS
LAVELLE, DAWSON MARSHALL
FROM: CATE REESE
SUBJECT: BOEING COMPANY ANALYSIS
DATE: SEPTEMBER 5, 2020
CC: MIKEL CHERTUDI
The purpose of this memorandum is to compile information to gain a better understanding of
the Boeing Company. This analysis demonstrates knowledge of important information involving
Boeing and its industry, while providing background for my team and I to successfully complete
our communication plan project. After completing the analysis, I have concluded that Boeing is a
leader in their industry and will be able to recover from the pandemic with potential growth by
bringing back a redesigned 737 max. Below is an analysis of the Boeing Co’s industry, target
markets, competitors, recent trends, strengths and weaknesses.
Industry Outlook
Boeing is the world’s largest American aerospace company. Boeing competes in the Aerospace
industry, but expanded into Defense in 1961 (Amir, 2019). Boeing engages in the manufacturing
of commercial jetliners, military aircraft, missile and space systems, while providing support
services to the commercial airline industry worldwide. Outlook for the defense industry is
positive, with expected growth of 3 to 4% by the end of 2020 as governments look to modernize
their militaries worldwide (Lineberger, 2020). The commercial aerospace industry has taken a hit
in 2020 largely due to the Covid-19 pandemic which slowed the demand of air transportation
and aircrafts.
Major Competitors
Boeing has different competitors for their commercial airplanes and defense, space, and security
(BDS). The airline and commercial jet aircraft industry remain highly competitive and Boeing
faces aggressive international competitors. Competition between Boeing and Airbus has been
described as a duopoly in the jet airliner market for some time. Boeing and Airbus have a
combined market share of 91% (Forbes, 2020). BDS faces heavy competition primarily from
Lockheed Martin and Northrop Grumman. While Lockheed Martin is a key competitor, the
companies have come together on various ventures to address specific requirements (Aeroweb,
2020).
Boeing’s Target Markets
Boeing has a different target market in that they are selling to companies and organizations
rather than to individuals. The two main target markets are the U.S. government and its allies as
well as commercial airline companies. These two markets specifically coincide with Boeing’s
business model: Defense, Space, Security and Commercial Airplanes (Boeing, 2020). Boeing
geographically targets commercial airline companies in regions where air transportation is
prominent. While in the defense sector, The U.S. government is one of the main customers for
Boeing, bringing in almost 31% of company’s revenue in 2018 (Forbes, 2020).
Figure 1. A pie chart showing the Percentages of Boeing Revenue from their different business
segments. (Forbes, 2020)
Strengths and Opportunities
A key strength of Boeing is that they have a robust presence in the domestic market. Boeing is
the United States government’s 2nd largest defense contractor, ensuring ongoing business and
revenue (Schmidt, 2016). Boeing maintains solid relationships with its suppliers and customers,
enabling them to build global partnerships to develop design concepts and technologies. In the
defense segment, rising international tensions would create an opportunity for a higher demand
in security and defense products (Schmidt, 2016). Boeing’s R&D aids in growing their product
line and services and maintaining its market position.
Important Issues
Boeing has history of mechanical failures, loss in market share, and a declining reputation
resulting in the company’s desperation for assistance. Recent airplane crashes and
manufacturing failures have caused the grounding of the Boeing 737 max, generally used for
domestic travel. These failures in 2019 alone, resulted in Boeing losing $4.1 billion in sales.
Additionally, compensation claims made by the families of victims of the deadly 737 crashes
have increased Boeing’s growing legal costs (Kannan, 2020). The failures of Boeing have
contributed to Airbus replacing them as the world’s largest aircraft manufacturer in 2020.
Based on this company analysis, you can see that the Boeing Company is very dominant within
their industry and this will help them to increase their revenue once things start to normalize
after the pandemic. Having a more in-depth understanding of the internal issues and outlook on
Boeing will allow us to be more successful when conducting research on future projects. For any
questions regarding this company analysis please email me at [email protected].
References
2
Aeroweb. (n.d). The Boeing Company Competitors & Competition. Retrieved from http://www.fi-
aeroweb.com/firms/Competitors/Competitors-Boeing.html
Amir, A. (2019, August). Boeing Company. Retrieved from
https://www.britannica.com/topic/Boeing-Company
Boeing. (2020). General Information. Retrieved from https://www.boeing.com/company/
Forbes. (2020, January). How Much Of Boeing’s Revenues Comes From The U.S. Government?.
Retrieved from https://www.forbes.com/sites/greatspeculations/2020/01/06/how-
airbus-has-grown-over-the-years-to-dethrone-boeing-as-the-largest-commercial-
aircraft-maker/#74a0283c3a59
Kannan, K. (2020, March). The Competition Between Airbus and Boeing. Retrieved from
https://www.colorado.edu/polisci/2020/03/02/competition-between-airbus-and-
boeing
Lineberger, R. (2020). 2020 Aerospace and Defense Industry Outlook: A midyear update.
Retrieved from https://www2.deloitte.com/us/en/pages/manufacturing/articles/global-
aerospace-and-defense-industry-outlook.html#
Schmidt, A. (2016). A SWOT Analysis of Boeing. Retirved from
https://marketrealist.com/2015/04/swot-analysis-boeing/
