Porter’s Five Forces Analysis of Boeing 

The Boeing Company is a telecom equipment, airplane, and missile designing and manufacturing American Multinational Corporation. William E. Boeing started the aviation company in 1916. Today, we’ll discuss Porter’s five forces analysis of Boeing; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.

Porter’s five forces analysis of Boeing would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s Boeing Porter’s five forces analysis of airline industry and aviation business as follows;

Porter’s Five Forces Analysis of Boeing

Let’s discuss Porter’s five forces analysis of Boeing as competitive forces in strategic management and they’re as follows;

Bargaining Power of Suppliers in Boeing

The bargaining of suppliers is Higher in the airline industry and aviation business as competitive forces in strategic management. The main suppliers of Boeing are as follows;

• C.E. Machine Company, Inc., of Wichita, Kan
• Dynamatic Technologies Limited of Bangalore, India
• Killdeer Mountain Manufacturing, Inc. of Dickinson, N.D.
• Janicki of Sedro-Woolley, Wash.
• Toray Composite Materials America, Inc., of Tacoma, Wash.
• Microsoft of Redmond, Wash
• Indigenous Defense & Infrastructure Consortium Pty Ltd of Sydney, Australia
• KF Aerospace of Kelowna, British Columbia, Canada
• CSIRO of Clayton, Victoria, Australia
• EPIC Fuels of Irving, Texas
• Harper Engineering Co. of Renton, Wash
• ValStream of Dallas, Texas

Some of the main factors impacting the bargaining power of suppliers in Boeing Porter’s 5 forces analysis of the airline industry and aviation business are as follows;

I-No Substitute Option

Some of the aviation suppliers of Boeing invest a significant amount of capital resources in the production of special equipment and components like avionics systems. They earn the rights and patents of their tech equipment and components for the airlines. However, with the quality and high standards they offer; the aviation brand could find it anywhere else. As a result, it amplifies their bargaining for their expertise in the specialized equipment.

II-Reliance

Boeing is heavily reliant on Rolls Royce and GE for aircraft engines. Both companies have the specialized expertise of manufacturing top-quality aircraft engines. Heavy reliance would further amplify their bargaining power.

III-High Switching Cost

Boeing has earned a great name and reputation in the airline industry for manufacturing high airplanes. In order to ensure the smooth supply of supplies, equipment, and components; the company builds long-term relations with suppliers. In fact, the company can’t afford to switch to other suppliers because they have a strong commitment to continuous improvement.

Bargaining Power of Buyers in Boeing

The bargaining of Buyers is lower to high in the airline industry and aviation business depending on the client’s order as competitive forces in strategic management. The customers and buyers of Boeing are as follows;

• Leasing companies
• Governments
• Airlines
• Billionaires

Some of the main factors impacting the bargaining power of suppliers in Boeing Porter’s five forces analysis of airline industry and aviation business are as follows;

I-Bargain Power of Airlines

The bargaining power of airlines’ customers and clients is very high. It is because they have a large fleet size of aircraft; they need a continuous supply of airplanes; and continuous repair and maintenance of the existing ones. For instance, Emirates Airlines has a fleet size of more than 250 airplanes, and it has a higher bargaining power.

II-Leasing Companies

The leasing companies have moderate bargaining power. They buy aircraft from Boeing and then lease it to the airlines and billionaires for further use. For instance, if the leasing companies have a limited fleet size of aircraft, they would have a lower bargaining power; otherwise, it is higher.

III-Government

The governments are also the clients and buyers of Boeing, and they have a lower bargaining power. This is because they can’t afford to maintain a large fleet size, and they only use the aircraft for official purposes. When it comes to procuring aircraft, they have to follow the protocol and get approval from various departments.

Threat of New Entrants in Boeing

The threat of new entrants is low in airline industry and aviation business as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the Boeing 5 forces analysis of airline industry and aviation business are as follows;

I-High Capital Investment

Boeing has been operating its business in the production of aircraft, missiles, and telecom equipment for the past more than 110 years. The aviation brand has established a very large production facility infrastructure and conducting its operations at a mega scale. Along with infrastructure, the company is also collaborating with the worldwide network of approximately more than 11000 suppliers in various countries. They all have specialized expertise in manufacturing equipment, components, and suppliers for the airlines.

The new entrants have to face the following challenges while entering the production of airlines;

• Heavy capital investment for building the mega-scale infrastructure
• No familiarity with the network of suppliers
• Limited availability of experienced aircraft manufacturing engineers and tech experts
• No channel for the distribution of equipment and supplies

Threat of Substitutes to Boeing

The threat of substitute products and brands is low in the airline industry and aviation business as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in the Boeing five forces analysis of airline industry and aviation business are as follows;

I-Other Transportation Mediums

Busses, trains, cars, motorbikes, and ships are some of the main modes of transportation as alternatives to aircraft. They all are good, but the airplane has maintained a separate brand name for itself because it is efficient and saves a lot of time. Environmental-friendly trends and campaigns could decrease the demand for airlines.

II-Regulations & High Standards

The Government regulations are very strict for maintaining high quality for aviation companies. Boeing has earned a great reputation in the airline industry for producing high-quality airplanes for customers in different categories. It helps the aviation brand to gain a competitive edge over competitors in the airline industry.

Competitive Rivalry in Boeing

The competitive rivalry among aviation companies is lower to moderate in the airline industry and aviation business as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in Boeing Porter’s 5 forces analysis of the airline industry and aviation are as follows;

I-Multiple Competitors

Boeing is operating its business in various categories; security, space, defense, aerospace, telecom, and others. The company is facing tough competition from competitors like Lockheed Martin, Bombardier, Embraer, and others. However, the company is competing with them in pricing policies, regional markets, and different product segments.

II-Product Differentiation

In order to fight off the competition, Boeing invests a significant amount of capital resources in research and development to differentiate itself from its competitors. The company is working on fuel-efficient and environmentally friendly airplanes, full equipment with safety protocols, and various other innovative features.

Conclusion: Boeing Porter’s Five Forces Analysis |5 Forces Analysis of Boeing

After an in-depth study of Porter’s five forces analysis of Boeing; we have realized that Boeing is the world’s leading aircraft manufacturing brand. If you are learning about the Boeing five forces analysis of airline industry and aviation; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.