Business

SWOT analysis is an important tool for strategic analysis in any organization. SWOT is an acronym which means strengths, weaknesses, opportunities and threats facing an entity in its day to day activities. SWOT analysis involves analyzing an organizations internal and external environment to ensure that all possible loopholes which may lead to its failure are eliminated while at the same time taking advantage of any opportunity that may arise from these environments. SWOT analysis is one of the widely used marketing tools by organizations and companies today.

Internal and external environmental analysis of Boeing Company
Boeing Company is one of the largest aerospace companies in the United States and globally with the largest number of customers.

External forces and trends

Political legal factor
The regulatory and policy decisions of a countrys government usually have dramatic impact on the civil transport aircraft demand. The federal aviation administration and the government of the United States are very influential as aircraft industry is concerned. These two legal frameworks oversee the biggest market of air transport in the world. Various regulations by the European governments as well as the United States may affect the driving force for demand of new aircrafts or even their engines. Also, the European airlines deregulations which commenced in the 1990s offer an opportunity for expansion of markets especially those of smaller regional jets. Following the formulation of GATT or the general agreement on tariffs and trade in the year 1979, trade involving large commercial airlines, no tariffs has been imposed on large commercial jetliners. Regulation and deregulation by the government have different impact on the aircraft industry (Parker, Logan, Wencel, Corum  Thul, 2006).

Increasing political intervention has a great influence on the demand for aircrafts. Buyers decisions to
purchase aircrafts are largely dependent on the support or the interferences of the government. Today, the largest market for Boeing planes is China. As a result, China has been able to obtain political leverage in the United States. Any interference of this scenario may cut off Chinas purchases of Boeing thus affecting the overall performance of this company (123HelpMe.com, n. d).

Economic factor
Manufacturers of aircrafts rely on government subsidies. Potential or likelihood of fuel costs increase, environmental restrictions, higher security prospects, an increase in insurance costs and congestion due to various factors would to a great extent affect the productivity and profitability of Boeing Company. Following the terrorist attacks in the United States and London in year 2001 and 2005 respectively, the aviation industry was highly affected. Fuel costs rose and this is expected to continue in the future. This would in turn lead to tremendous losses for Boeing Company and other aircraft companies around the world (Parker, Logan, Wencel, Corum  Thul, 2006).

Various airlines in the United States have been filing for bankruptcy while others have already closed down. Also, global tourism industry is experiencing a recession leading to a decrease in the overall prices of aircrafts.

Social factor
Following the 911 terrorism attacks in the United States that involved Boeing 737 aircrafts, an anti-United States feeling was generated which negatively affected the sales of Boeing in west Asian countries. This area had been a lucrative business market for the aircraft industry but so far it has recorded tremendous drops in sales (123HelpMe.com, n. d).

Technological factor
Technology in the aircraft industry is changing and this poses a major opportunity for Boeing Company. Supersonic transport is promising to create a new market segment and this is an opportunity for Boeing Company to expand. Most of the commercial carriers are expected to purchase supersonic aircrafts in their quest to satisfy the needs of their customers of speed. One of the best and largest cost effective technological advancement of the aircraft industry is the faster designing of planes. The increased time of production is expected to save labor costs and also ensure more effective use of resources during construction work. Boeing has already taken advantage of technological advancement and it has come up with Boeing 777, a new model created by employing computer technology to come up with a prototype. By doing so, the company did not absorb prototype costs it could have incurred had it done this work normally or manually. Advancement in technology is also expected to help airline companies be more efficient as far as resources usage is concerned. Robots are today used by airplane manufactures to reduce resource wastages and they have proven to be effective (Parker, Logan, Wencel, Corum  Thul, 2006).

Global networks and globalization of airline industry
The international customer base for the Boeing Company is a source of strength for this company. Boeing Company is one of the largest aerospace companies in the world and its fleets are used by different airlines around the world. Having an international customer base ensures that the company does not incur losses which accrue from operating from a single country of few countries. The networks Boeing holds for supplier components around the world also form a major competitive strength for the company.
Another possible opportunity facing Boeing Company is the frequent airline travel changes being implanted which are supportive of the product line of the company. Most airlines are going global while at the same time increasing their internal flights within their localities. Boeing is an internationally credited and known company and this poses a major opportunity for the company to expand its customer base. Also, due to the different range of fleets it offers, such changes in travel patterns pose a good opportunity for the company (123HelpMe.com, n. d).

Internal forces and trends

Resources capabilities
Boeing Company is endowed with technical expertise and also has innovative and creative employees. Boeing is credited for having highly skilled engineers thus ensuring that the quality of products is high. The rate of labor turnover at engineering department of this company is low thus ensuring that work continues uninterrupted for long periods of time. Workers are also very innovative and committed to the overall goal and vision of the company. This reduces the cost associated with labor turnover and improves the competitive position of this company (123HelpMe.com, n. d).

Another internal strength of Boeing Company is that it has had a long standing relationship with its customers that have enabled the customers to become loyal and committed to the companys product. Boeing Company was established in the year 1916 and ever since its inception it has had good relationship with its customers thus forming strong business bonds. This makes it difficult for its competitors to take away the companys most relied customers. Also, due to the length of time and success the company has recorded, it has proven its longevity to withstand any financial blows which may be brought about by recessionary periods and other calamities. Boeing Company has been in operation for over 60 years and for all this time, it has been a market leader in the aviation industry. It has also accumulated assets to help it bounce back in times of financial crisis. Such records have helped in developing customers loyalty and faith in the company forming a major strength for this company (Parker, Logan, Wencel, Corum  Thul, 2006).

Strategy
Diversification is a major strength possessed by Boeing Company. Boeing Company does not only manufacture commercial aircrafts for its customers. It has other five divisions in operation within the company. Diversification enables the company to ensure it continually makes profit while hedging itself from major losses which may occur due to specialization. Also, the company offers or manufactures diverse aircrafts which gives customers a wide range of variety to choose from. Poor performance from one department can thus be hedged by good performance from another line of production. In the commercial market, Boeing has five fleets of airplanes to choose from which include Boeing 737, 767, 747, 777 and the latest 787 model.  The most known, preferred and commonly used model is the Boeing 747 (Parker, Logan, Wencel, Corum  Thul, 2006).

Processes and systems
One of the biggest weaknesses of the Boeing Company lies in the development cost incurred while coming up with new products. By the year 2006, such costs were estimated to range from  8 to  10 billion. This has the capability of reducing the overall net profit as well as returns on investment for stakeholders (Parker, Logan, Wencel, Corum  Thul, 2006).

Another weakness of the Boeing Company lies in its reliance on the suppliers component manufactures. Relying on suppliers component manufacturers may be dangerous for the company in cases where these suppliers may retaliate from their agreement. Also, sourcing from different suppliers for different components is costly to the company (123HelpMe.com, n. d).

SWOT Analysis table for Boeing Company

Strengths
Diversification strategy
Technological advancement and expertise
Highly qualified and experienced engineersWeaknesses
High airplane development costs
Reliance supplier component manufacturers

Opportunities
Government deregulation policies
Creation of new markets as a result of supersonic transport
Globalization of airline industry

Threats
Anti-United States feelings by West Asian countries following terrorism attacks in the US
Increased security demands and government regulation which may increase manufacturing costs
Rising fuel costs
Increased number of airline companies closure